10 common fraud schemes and how to protect your money

You often hear of fraud on the news, but you typically think it won’t actually happen to you, right? Think again. Today’s fraudsters are employing schemes that are trickier than ever and even the most cautious people are feeling the impact. Here are the 10 most common fraud schemes to be on the lookout for.

Illustration of the word fraud overlaid on a computer keyboard

1. Lottery or Sweepstakes You Never Entered

How they trick you. Congratulations, you just won the Jamaican lottery! They will request you pay taxes before they give you access to your winnings.

What this means for you. You will continue being asked for more money in order to gain access to your fortune. In the end, you will never get back the money you send.

How you can prevent this. Watch out for scams that seem too good to be true, because they are indeed not true. Be sure to block the phone number or email trying to contact you to avoid answering in the future.

2. Prince or Government Official Needs Your Help

How they trick you. Someone contacts you either by social media, text or phone call, or even via email saying they need your help. They will divulge that they are wealthy and bribe you to transfer their funds out of the country. The scammer will request you send them money in return for a portion of their fortune.

What this means for you. The requests and bribes will only continue. In reality, you are out all of the money you sent this person and they will not be gifting you some of your fortune.

How you can prevent this. Block the method of contact and report them to your service provider. Never send money to someone you do not know, or without verifying if they are legitimate.

3. Customs Clearance/Advance Fee

How they trick you. A friend emails asking for money to get a valuable item through Customs. You are asked to provide a customs fee that they will repay. The email appears legitimate and they may have provided falsified documents to “prove” they are in need of help.

What this means for you. Most likely you will be told that there are more fees and your friend greatly appreciates your help. While the official looking emails may seem real, they are not. In order to trick you, the scammer will use a similar logo and email address. The logo and email may only have minor changes that, if detected, will reveal it is counterfeit.

How you can prevent this. Block the email address from which you received the phishing email. Then make sure to immediately call your friend that is asking for your help to verify the request is legitimate.

4. Internet Sale

How they trick you. You use a reliable website to attempt to sell your vehicle. Someone is interested in your car, but they make a mistake and send you a $15,000 cashier check for your $10,000 car. All you need to do is deposit the extra money and send it back to them.

What this means for you. You have shipped the car to the buyer and you deposit the extra cash to send back to them. Now the original check bounces and all of your attempts to contact the buyer are ignored. Now you are out both a car and $5,000 more in cash.

How you can prevent this. Never continue with a sale of something if the buyer asks you to send money out of your account. This is an attempt to scam you. Report the purchaser and destroy the check.

5. Internet Loan

How they trick you. You need some money, but your credit does not qualify you for a bank loan. Instead, you apply to a website that appears legitimate and they send you a check for a partial amount of the loan. In order to get the full loan amount, the lender wants you to send a small portion back to show good faith. Once you have sent the money then your check for the full amount will be on its way.

What this means for you. The loan check you receive bounces and the money you sent in "good faith" is gone. You have no way of tracking the lender and they ignore all of your attempts to contact them. Similarly, if you have given your account information over, they may steal your identity.

How you can prevent this. No matter how bad your credit is, when you need a loan, go to talk to your banker. They will have legitimate ways to help you clean up your credit in order to get the loan that you need.

6. Internet Job

How they trick you. You are looking for online job opportunities and find one as an assistant to an overseas business. You are asked to open a bank account in order to distribute funds to customers in different regions. Transactions appear in your account and you’re directed to send the money elsewhere.

What this means for you. In reality, the business you are working for is fake and all of the funds you have received are stolen. You are now responsible for the theft of the money, distributing it, and the now missing funds.

How you can prevent this. If something sounds too good to be true, it is. Always research companies beforehand, because chances are you won't find any evidence they even exist. If it does seem like a real company, contact them to make sure the employee and job opportunity actually exists. Also, never believe a company that wants to use your personal account to distribute money.

7. Romance

How they trick you. You are befriended by someone overseas and start chatting with one another. After some time of "genuine" communication, you develop a relationship with this person and possibly even get engaged. They will claim to have a legitimate job and you may even be able to video chat with them. Unfortunately, they are unable to travel to meet you due to travel restrictions. You offer to help them financially to afford a lawyer or plane ticket, all in the name of love.

What this means for you. Overtime they will start asking for larger amounts of money from you. The scammer will request that you do not reveal this information to your bank or family. They may say they are the only person that knows and understands you. In reality, you’re being scammed. When you stop sending money, you will not hear from this person again.

How you can prevent this. Always be wary when someone unfamiliar befriends you online. Most likely the relationship is a scam if it escalates very quickly into a loving relationship. Make sure to never send money to someone you have not met in person, even if you have seen their face through video chat. Quickly report this person to the website you met them on if you think you are being scammed.

8. Friendship

How they trick you. You're befriended by someone unfamiliar online, but this time they ask you for help after a few exchanges. They confide in you that their daughter is sick and needs surgery but the hospital and doctors need cash up front. Without the surgery and your help their daughter will die.

What this means for you. Your friend continues asking you for more and more money because there have been complications with their daughter. They keep saying they need more money for the doctors, when really they do not have a sick child at all. This person has taken your money, but you have no idea who they really are or where they are located.

How you can prevent this. Never send money to someone you have not met in person, no matter how legitimate it feels. If you think you are being scammed, report them to the website you are using and block them from all further contact.

9. Distraught Grandchildren

How they trick you. Your grandchild calls you and says they need your help because they are in trouble. They are in jail or the hospital or want to secretly get married but they do not want their parents to know. You are asked to send the money right away in order to help them out.

What this means for you. Your dear grandchild is really not in trouble and is not contacting you. Instead, you're communicating with and sending money to a scammer, who is most likely from a foreign country.

How you can prevent this. Immediately call your grandchild and their parents to verify the story. The grandchildren are likely safe and need to know a criminal is using their information as a scam.

10. Facebook Friends

How they trick you. You are contacted by an acquaintance whom you haven’t spoken to recently but may trust. They ask for your help and you send them money because you are more than happy to help an old friend in need.

What this means for you. A scammer has taken over your friend's social media account and used their identity to contact you. Any money that you send your "friend" is really sent to a stranger that you know nothing about.

How you can prevent this. Always double check with your friend before you send money to them, no matter how close you are. Give your friend a phone call to verify the situation first.

Scammers have this in common: they prey on those that are gullible. If you think you are being scammed, check with someone you trust. A banker or attorney can help you protect your money and identity.

Do not lose money through fraud because you were searching for riches, kindness or love. It is rare that these attempts to get rich or find love are real. Please always be careful and consider this a warning.

The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its subsidiaries and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.