10 Scams to Avoid in 2011

by Ben Edwards on 4 January 2011 4 comments
Photo: Yanik Chauvin

You work hard for your money: an honest day’s work for an honest paycheck. Unfortunately, not everyone has the same work ethic or honest streak that you do. There are people out there working hard to illegally part you with the money you earned.

Fortunately for us there are organizations like the National Consumer League and the Federal Trade Commission who are working to help protect you from those slimy scammers.

Top Scams of the Year

Every year the National Consumer League releases a report on the top scams of the year where they feature the most-reported scams. You’ll see many of the same scams showing up on the report year after year, so here are the top 10 scams from last year that you should continue to watch out for in 2011:

  1. Internet: General Merchandise
  2. Fake Checks
  3. Prizes/Sweepstakes/Free Gifts
  4. Phishing/Spoofing
  5. Advance Fee Loans, Credit Arrangers
  6. Timeshare Resales
  7. Nigerian Money Offers (not prizes)
  8. Internet: Auctions
  9. Friendship & Sweetheart Swindles
  10. Employment Agency / Job Counsel / Overseas Work

Most of them are pretty self-explanatory, but you can find more explanation of each in the scam report (PDF).

Top Consumer Complaints

The Federal Trade Commission also has an annual report that you should check out, which lists the top consumer complaints of the year. Below are the top five complaints from the last report:

  1. Identity Theft
  2. Third Party and Creditor Debt Collection
  3. Internet Services
  4. Shop-at-Home and Catalog Sales
  5. Foreign Money Offers and Counterfeit Check Scams

Many of them look similar to the National Consumer League items, but the top complaint, identity theft, is a little different than the others. Most of the scams involve you interacting with the person or company that’s trying to cheat you, so you can avoid the scam by avoiding the scammer. Identity theft protection is a little different because many times you don’t even know right away that someone has your personal information and is using it illegally. You can find lots of tips for guarding your identity on the Protect Your Identity site from the National Foundation for Credit Counseling (NFCC) and the Council of Better Business Bureaus.

How to Avoid Scams

The FTC has a website called Onguard Online that offers tips on how to be safe online. One of the articles lists ten things you can do to avoid scams. Here are the top five tips, and you can check out the site for the other five and more details behind each tip:

  1. Don’t send money to someone you don’t know.
  2. Don’t respond to messages that ask for your personal or financial information.
  3. Don’t play a foreign lottery.
  4. Keep in mind that wiring money is like sending cash: once it’s gone, you can’t get it back.
  5. Don’t agree to deposit a check from someone you don’t know and then wire money back.

To keep up-to-date on new scams you can subscribe to the FTC’s newsletter called Penn Corner, which sends out fraud alerts and updates. If you’ve been scammed, the FTC put together a video on how you can file a complaint about your incident.

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Guest

"You can't cheat an honest man" is not just a W.C Fields movie. If it sounds too good to be true, you heard right.

Ben Edwards's picture

You're right, there's no such thing as "no strings attached". There's usually a motivation behind any great offer. The better the offer, the more you should consider what's at stake. If it's the best offer you've ever heard, make sure you research it thoroughly before even considering it.

Guest's picture
Elizabeth

One of the scams I saw pop up often in the past few years is the email message claiming to be from a friend who is stranded in Europe and needs money. When the real friend is contacted, they have no idea their email address has been compromised.

Ben Edwards's picture

I've seen that one a lot too. In most of the cases I saw the fake email came from someone's gmail account.