Piggy bank wearing glasses in a classroom

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. Make sure to be fully aware of the 10 most common fraud schemes to know what to look for and what they could mean for you.

a fraudster hidden by a computer screen

Lottery or Sweepstakes You Never Entered

How they trick you: Congratulations, you just won the Jamaican lottery! All you have to do is pay the taxes on your winnings in order to get the money through customs, then you will have access to your new fortune.

What this means for you: You will continue being asked for more money in order to gain access to your fortune. In the end, the money you sent for your non-existent lottery funds are gone and your fortune will still be stuck in Jamaica (or Canada or anywhere).

How you can prevent this: No matter how lucky you are, if you didn’t buy a Jamaican lottery ticket, you are not going to win the Jamaican lottery. 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. This person says they have millions of dollars that they cannot get out of their home country and they need help with customs or taxes, bribing you to help get the funds out of the country. All that they ask for you to do is send them money (or your bank account number) and in return some of their fortune will be yours.

What this means for you: All of the requests for bribes, wires, attorney fees, and funds will continue, no matter how much you have helped or how much money they are offering you in return. 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 this person as soon as possible in the method they contacted you and report them to the service provider. Never send money to someone you do not know in person and always take the time to double check via a phone call or secondary communication.

3. Customs Clearance/Advance Fee

How they trick you: You are emailed by a friend saying they need help getting a very valuable item or cash through US Customs or out of another country. All they need is for you to provide is a simple customs fee to help them move the funds, and afterward they will repay you. The email appears to be legitimate they have even provided information from Customs saying they need several thousand dollars to release the cargo or money.

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. Chances are the scammer is using a similar logo to the actual customs logo, and even a similar email address that is just one letter off from an official email address, all in order to trick you.

How you can prevent this: If you think you are being scammed block the email address who sent you the request and report it as a phishing email to your email provider. 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 want to sell a car on the internet and are using a trustworthy website that your friends have had success on. 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 is 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. You are being scammed and need to report this person to the website you are using to sell your items and destroy the check you were sent.

5. Internet Loan

How they trick you: You need some money, but your credit is 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. This scheme also works where you give them all your account information to direct deposit the loan funds, allowing them to now 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’re looking for a job that you can do from your home and find a job as an assistant to an overseas business. Part of your job will be to help distribute funds to customers in the US or other countries, you just need to open a bank account for them to start sending you funds. Soon different transactions begin appearing in your account and you are told where to send the money as part of your job.

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. This person claims to be a military member, prince, rich widow, or any random station in life that sounds responsible, and you may even be able to video chat with them in person. 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 requests are always urgent and they always tell you not to tell your bank or family what is happening because they say they are the only one who truly knows and understands you. In reality, you are being scammed and once you run out of money, you won’t hear from your “significant other” ever 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, even if it feels real. 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 almost always perfectly safe and they should be aware that someone is using their information to scam others.

10. Facebook Friends

How they trick you: A friend of yours reaches out to you on social media and while you may not have talked to them for a while, you have known them for years and obviously trust them. 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. This is best done through a phone call because if you know them well enough to send money, you know them well enough to call and say hi before you send any money to them.

All scammers have one thing in common: they hope you are too embarrassed to tell anyone that you fell for a scheme or too proud to admit you were tricked and keep sending money their way to show you were right all along. If you think you are being scammed check with someone you trust. A banker or attorney can help you protect your money and identity.

Unfortunately, we have seen our customers lose their hard earned money through fraud, all because they were chasing instant riches, kindness, and love. While we wish for each of our customer’s happiness, it is rare for someone to instantly become rich or married because of a random stranger’s generosity or love. 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 affiliates 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.