Tuesday, May 14, 2013
Is it a scam? The list we keep on our website is not all-inclusive, yet the methods described are the most commonly used. Beware of these recent scams and learn how to recognize fraud.
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It's Scam Time!
We haven't written about new scams in GCFlash for quite some time. Not because there haven't been any new techniques reported, but because our tips for avoiding them remain the same.
For the sake of new readers who may not recognize the signs, we'll rehash them at the end of this article. After we discuss a couple of recent trends.
Government grants are free money to those who meet certain criteria. Free. As in awarded to approved applicants without a fee.
There is no processing fee. There is no reason to buy a list of federal grant-making agencies. The list is available for free at any public library or online at Grants.gov.
Anybody asking for money to provide these services is a scammer. These crooks will place ads in a newspaper's classified section along with a toll-free number to call for more information.
Or you'll get a phone call from someone claiming to be an agent for an official sounding organization. They'll ask some basic questions to determine grant eligibility. Caller IDs can be spoofed to display a Washington, D.C. number.
Both methods end the same way. They guarantee you will receive the grant money and ask for your bank account number so that it can be deposited directly. And, oh yeah, they'll deduct their small processing fee.
There's absolutely no risk on your part. If you're not satisfied, they'll refund your processing fee.
You never get the grant money. You can't find these agents when you try to follow up. And they take a lot more than a small processing fee. Your bank account is emptied.
Think you could never fall for something like this? Nearly 23,000 people already have.
The Federal Trade Commission (FTC) was hot on the trail of a group that used websites to falsely claim they could help consumers get free government grant money. Those defrauded will recover nearly 80% of their loss through a summary judgment won by the FTC against 25 individual and corporate defendants totaling $1.7 million.
But recovery is rare. Even when the crooks are caught, recovering your loss can prove difficult if not impossible.
Recognize when opportunity is ripe for scam. Like when something hits the news. Natural disasters. Personal tragedy. Government programs. Entitlements.
For every legitimate charity or benevolent act, you'll find vultures lurking overhead in search of prey.
One of the most recent involves The Affordable Care Act. Predatory groups are already trying to lure consumers by convincing them to enroll in the new Health Insurance Marketplace now.
The problem is that the Marketplace doesn't start until October 1, 2013. You cannot sign up sooner, even if you wanted to get a head start on the program. If someone is claiming you can enroll now, it's a scam. Report them to the FTC.
Regular readers can tune out here. This part is for you newbies who haven't heard me stress scam recognition again and again and again....
If you didn't expect it, didn't request it, or uncertain who sent it, it's a scam. Don't accept any offer that has to be agreed to on the spot.
Often it's a scam, even if you recognize the sender's name. Trojans infiltrate a friend's eMail client and send malware to everyone in their address book. All of those messages you receive from a contact that contain nothing more than a link are distributing malware. By clicking that link, you'll be delivered a payload of trouble. Plus your friends will get that same gift from you.
Maybe not every single message. But you're still better off to delete it anyway to protect yourself against those 99% that are a threat.
No legitimate bank, credit card carrier, government agency or institution of any type will ever send you an email requesting personal information. They will not ask for your Social Security number, login credentials, account numbers, etc.
Nor will they call you cold on the telephone. Never give account information to anybody that calls you, even if it's an entity you do business with, if they call you unexpectedly. Call the organization directly using a number already known to you. Not one they offered during an unsolicited phone call.
Use these same rules no matter how the contact was initiated; whether it be by phone, eMail, snail mail, SMS text message, etc. Crooks aren't fussy about a communication device. They'll snare you whatever way they can.
They'll pose as agents from government agencies you're familiar with like the IRS, FDIC, FTC and others. They'll use a name that sounds so close to a trusted source that you believe you're dealing with a legitimate entity.
Unless it's in response to a communication you initiated, using contact information previously known to you, it's most likely a scam. Don't click links embedded in their eMail, don't open any attachments.
You did not win a contest that you never entered. You did not receive a windfall from a relative you have never heard of. You were never chosen to receive a free cruise, computer, car or anything else that only requires a small shipping or processing fee.
You will not earn money from home by paying an upfront fee to anybody. You will not get to keep the portion of a check sent you to simply deposit and refund the difference.
And unless you really are of Nigerian heritage, there is absolutely no legitimate reason you would be contacted by a member of their royal family. Even if you are, chances are pretty slim a prince would need you to do their banking.
Most of this is plain common sense. But in our busy society, many of us react without thinking. The time to think things through is not a luxury we have readily available.
Yet that's when we're most vulnerable. Scam victims are not stupid people. They merely acted carelessly under the stress of the moment. And that's somewhere we've all been. It could happen to any of us.
Pay It Down
Debt. When you're on overload, it can crush you. It leaves you stressed, anxious and uncertain about your future.
Nobody wants to live buried under a mountain of debt. Yet the recent economic crisis left millions of Americans jobless. Many had to depend on credit cards for their very survival. It was their only means for food, fuel, medical care... life's basic necessities.
How do you begin to climb your way back to prosperity?
Financial experts will offer sound advice. Don't buy what you can't afford to spend in cash. Pay your credit card balance in full every month.
Duh.... Obviously these folks have never been without a job or forced to work below what they had become accustomed to earning.
The rest of us can use a little help now and again.
The first step is analyzing how much you spend every month. You know the recurring amounts such as housing, utilities, loans and insurance.
Track the variables like groceries, transportation, clothing, entertainment and household goods over a couple of months and average them out to determine a weekly expense. Is your income sufficient to cover all of this? If not, this drill will show you where you need to cut back to make ends meet.
Next, create a reasonable budget based on your income. Set money aside for yourself first. Money you can stash somewhere for a special purpose. It can be a new car, a dream vacation or a new wardrobe.
It's setting a goal, and watching your progress towards achieving it, that will keep you motivated and assure your success.
Now let's look at paying down those credit cards. The average American carries almost $15,000 in debt spread across three different credit cards. Let's look at a couple of different ways to become less-than-average.
Do you qualify for a zero-percentage introductory rate? These cards don't start assessing interest charges until a specified term, usually 12 to 18 months. A transaction fee is charged for any balance transferred to the new account. Do the math.
Combine the balance on the higher rate cards you might want to transfer and divide by the number of months you have before accruing interest. Is it equal or less than the separate payments you're making now? Can you pay it off within that window? Is the transaction fee significantly lower than the interest you're now paying?
If you answered yes to every question, taking this step is a no-brainer. It's the quickest way to dig yourself out of the hole.
But don't despair if this option isn't right for you. Perhaps you'll fare better by paying off the card with the highest interest rate first.
Add up your combined monthly credit card payments. Send only the minimum required payment to all but the card you're targeting to pay off first. They'll get the entire overage, reducing that balance more quickly and saving you the most in interest charges over time.
Once it's paid off, direct that monthly payment to card number two, along with its regular payment, and watch it dwindle even faster. Now you're seeing progress so quickly you'll be anxious to get to card number three.
Here's another method: Rather than focus on the highest interest rate card, choose the card you can pay off the quickest. You'll see results sooner and be motivated to keep going.
Gather up your most recent credit card statements. Consumer cards must display how long it will take you to pay off that balance assuming you make only the minimum payment each month, as well as estimated interest you'll incur. But if your cards carry different rates and terms, you're not comparing on equal ground.
Instead, do the math yourself sans interest. Divide your statement balance by the minimum payment to find how many months it would take to pay off that amount.
Once you determine which you can say goodbye to the quickest, follow the formula above whereby you focus on ridding yourself of one debt while paying only the minimum to the others.
Of course, the success of any plan depends on your ability to stop using your credit cards. All this math goes out the window if you continue to add to your balance rather than deduct. The key is establishing a feasible budget. And sticking to it.
There's no quick formula to getting out of debt. Remember how long it took you to get in this deep? You can't get extracted overnight.
But following one of these methods allows you to see progress. And that's a great motivator to keep going until you reach your goal.
Tip of the Week
Have you searched for yourself online? You might be surprised to find where you turn up, and what others are saying about you. Protect your online reputation. Google yourself.
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