Watch Your Flight Plan for $cams
You’ve probably heard the saying, “If it’s too good to be true, it probably is.” Well, that holds true most of the time. We’d all like to believe that we’ve won an all-expense-paid trip or that a rich uncle left us something in his will, but it’s usually just a scam to get our money. Here are some common cons you’ll want to be aware of so your money stays safe.
College Financial Aid Scam
A company offers to help you find a scholarship. When you contact them, they ask you to pay a fee to begin the search. Generally, the information provided by these scammers is available for free to anyone. Guidance counselors and college financial aid offices are great sources of good, free scholarship information.
An illegal scam centered on a “lender” advertisement about personal debt consolidation. You call the number and they ask for minimal information about you and don’t offer information about the company. During your conversation, they approve your loan and instruct you to send in a fee for the promised loan – which never arrives.
Pyramid scams usually include recruiting members and serving as a distributor of products like telephone calling cards. Typically, you’re asked to pay a membership fee up-front. You’re instructed that once you recruit members to serve under you, you’ll profit from their sales. There aren’t enough potential members to keep pyramids growing steadily for even a few months, and they’re illegal!
Credit Repair Scheme
A company offers to erase your bad credit history or remove bankruptcy from your credit records for a fee. They ask for payment up-front. Unfortunately, there are no quick or easy ways to repair a poor credit history. If you fall for it, you’ve been taken by an illegal scam.
Fly Under the Radar: Avoid Financial Traps
Rent-to-own companies rent and sell products like appliances, furniture and electronics. You can rent the product for a short period of time and return it, or agree to rent the product until you pay enough to own the item. Purchasing items from these companies is legal, but usually costs two to five times as much as buying from a department or appliance store.
Payday loans allow people to get cash without a credit or background check. Lenders ask you to bring in a post-dated check and pay stubs to verify when you’ll repay the loan. The interest rate is extremely high, possibly more than 500%. While this type of loan is legal, because of the interest rate, it’s not a good option.