Archive for the ‘financial scams’ Category

Learn from Your Fake Financial Mistakes

Saturday, May 29th, 2010

Unfortunately, one of the best ways to learn what an online scam looks like is to encounter one. And if you've had too much experience with online scams you could still be reeling financially or considering bankruptcy.

The good news: The Federal Trade Commission has announced a new website to help consumers experience a variety of realistic online scam situations without actually losing money. By experiencing these scams in a risk-free environment you'll be better equipped to avoid them in real life.

The latest of these sites, Esteemed Lending Services, mimics advance-fee loan scams that have been known to drain consumers of their money without offering anything in return.

Know Financial Scam Warning Signs

When you click on any link on the Esteemed Lending Services page, you’re brought to a page that explains that, had the site been real, you could have been scammed. Then, in order to arm consumers with the tools necessary for avoiding scams, the FTC explains what to expect from advance-fee scammers:

  • Professional-looking web sites: Often, the FTC notes, scam companies will have a legitimate-seeming online presence and a trustworthy-sounding name.
  • Guaranteed loans: Any offer that guarantees you’ll be approved, regardless of your credit history, should signal a scam to you. Legitimate lenders need to know your credit history in order to give you reasonable loan terms.
  • Unclear fees: Real lenders disclose their fees upfront and do not require you to pay them until your loan has been approved. Scammers often charge fees upfront – and then never follow through with their promises of loans.
  • Phone loans: In the U.S., it’s against the law to promise a loan over the phone and ask for payment before the money is issued.
  • Slightly off names: One trick some scammers use is to give themselves a name and logo that resemble those of a legitimate company. If you’re not paying attention, you could easily be confused.
  • Lack of proper registration: If a company isn’t registered in your state, chances are it’s not legitimate. Back away.
  • Money wires: Legitimate lenders will not ask you to pay by wiring money – if someone asks you to do so, decline and walk away.

More Financial Help

The FTC also offers helpful hints for avoiding scams in such areas as diet products, male enhancement, medical supplements and work-at-home offers.

Posted in FTC, Financial Literacy, financial scams | Comments Off