Mortgage : Home Loans : Refinance : Home Equity Loans

By Benedict Rohan

Fraudsters are continually coming up with new ways to con unsuspecting
people into parting with their money, and with the internet, email and
mobile phones it’s becoming easier and easier for them. Here are some
examples of types of scams you might come across and tips on how to
protect yourself from being scammed.

Home working opportunities

Advertisements offering opportunities to work on your own from home can
be incredibly enticing – ‘no experience required’, ‘no selling
involved’, ‘no investment or overheads’, ‘huge earnings potential’.
Being your own boss and working flexibly is something that many people
dream of doing, so it can be easy to get sucked into joining up.
Typically, you’re asked to pay a fee up front for administration,
expenses and materials, or perhaps even just for more information. This
is when alarm bells should start to ring. Legitimate employers would
not ask you to part with money like this. After sending the fee, either
you never hear from the company again, or you receive work only to have
it rejected at your own cost when you send it back for inspection.
Common examples of types of work advertised in these scams are stuffing
envelopes, making cards or sewing clothes or fabrics.

African bank transfers

Most often received by email, these scams purport to be from government
officials or high-ranking people in an African country who need to
transfer money from the country, which they claim can only be done
using a foreign bank account. They often flatter your vanity by
claiming you have been specially chosen for your reliability,
trustworthiness, discretion and competence in financial affairs. They
explain that they will use your bank account to transfer a large sum of
money, of which you will receive a significant proportion as a fee. Of
course, after you hand over your bank account details you never hear
from them again and discover that your account has been emptied.

Prize draw winnings or foreign lottery jackpots

In these telemarketing scams, you’ll receive a phone call or a letter
informing you that you’ve won a prize in a draw or foreign lottery, and
that all you need to do to claim it is to pay an administration fee or
phone a premium rate number, which leaves you hanging on for several
minutes as your phone bill mounts. If you receive such correspondence,
stop and think about it – did you enter a prize draw or buy a lottery
ticket? You can’t win anything in a competition unless you entered it
in the first place so if it’s unsolicited, be suspicious.

Phishing

Phishing is the term for fraudulent emails appearing to be from
legitimate companies which request bank account or customer account
details. You’re asked to reply to the email with your full details as a
security check, or to update company records, or for you to remain
registered. Legitimate companies will never ask you to give out any
personal details – including user names and passwords – by email, so
you should never part with such information.

Pyramid schemes

Marketed as money-making or investment clubs, these scams claim to be

able to make you large sums of money in a short period of time simply
by paying a fee to join them and by recruiting others to join too. They
are based on the premise that the more people who join, the higher
members climb up the pyramid and the more money will be made to be
distributed among members. However, they can never work as they require
a continual flow of new members, which can never be sustained. A
similar scam is the chain gift letter/email, in which it is claimed you
will make large sums of money simply by giving a sum of money to one or
more persons on the list before adding your own name and forwarding the
letter/email. Any type of plan that claims to make people money solely
from the recruitment fees of other members is at best unsupportable and
at worst fraudulent.

Warning signs

If any of the following apply, then you should question the legitimacy
of the offer or deal:
The offer was unsolicited.
The company is based abroad.
You have to pay a fee to claim a prize.
You are asked to hand over your bank account details or other
personal information.
It seems too good to be true.
You have to phone a premium rate number.
The correspondence address is a PO box.
The correspondence you receive is full of spelling mistakes
and/or grammatical errors and looks unprofessional. (However, don’t be misled
into thinking that if something looks professional, it is legitimate.)
Tips to help you avoid being scammed
It helps to know who you are dealing with. Get names and company
details and do your own personal research to check whether the deal or
company is legitimate.
Find out if it’s a genuine company by checking whether it is
registered at Companies House.
If the company is legally required to be registered with a
certain body, such as the Financial Services Authority,
check whether the body holds records of the company’s registration.
Bodies such as the Citizens Advice Bureau, Consumer Direct, the
Office of Fair Trading or your local trading standards agency can often
be good sources of information on scams and frauds.
Don’t be afraid to ask for information to be repeated or
explained in more detail, and ask as many questions as you need to.
Don’t allow yourself to be bullied by hard-sell tactics. Never
commit to anything on the spot.
Take time to make your decision and always read the small print
of the terms and conditions. Seek professional or legal advice if
necessary.
Keep all relevant documentation.
Apply a healthy scepticism to anything that doesn’t seem quite
right!

Biography:
Author: Benedict Rohan
Website: http://www.mortgagenation.co.uk
Benedict Rohan works as a freelance finance writer. Commercial Mortgage, Homeowner Loans, Remortgages

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For additional Mortgage Refinancing information
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This entry was posted on Friday, February 9th, 2007 at 4:12 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.