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Is there an easy way to spot money-making scams?

Laurie L. Dove

How can you keep safe from money-making scams? Check out these money scam pictures to learn more!“How can you keep safe from money-making scams? Check out these money scam pictures to learn more!Don Bayley/E+/Getty Images

You’d think there’d be a surefire way to spot scams. Take the television infomercials of Matthew Lesko, for example. Wearing a chartreuse suit covered in question marks, Lesko shouts his claims to viewers: "Free car repairs!" "Big discounts on boats, limos and airplanes!" "Ten percent off your restaurant bill!"

His sales pitch is working. By putting a new spin on free, public information, Lesko’s made a fortune with dozens of something-for-nothing books, such as "Free Stuff For Everyone" and "Free Money to Change Your Life."

Since Lesko started hawking his books, which are really just repackaged lists of government grants and public assistance programs in the U.S., Lesko has sold 3.5 million books at $40 each. And that doesn’t even count the income he’s received from sales of audiocassettes and DVDs or speaking engagements.

Although the New York State Consumer Protection Board has tracked Lesko’s claims and described them as deceptive, he continues to attract an audience. Unfortunately, the information may not be that helpful to their pocketbooks. When Lesko touts "free car repairs" he’s actually referring to auto manufacturer recalls. Big discounts on boats and other luxury transportation? It’s primarily property seized from drug dealers and sold at government auction. And if you’d really like to get a 10 percent discount at dinner, then find out when the early-bird special starts at your local restaurant [source: Jamieson].

Despite the 25-page report that listed the board’s concerns in 2005, Lesko’s empire remains undisturbed. Turns out, even when it should be easy to spot a potential money-making scam, most people are eternal optimists. If you think you might be able to earn lots of money stuffing envelopes, working as a mystery shopper or waiting for a Nigerian prince to wire the millions he promised in his last email, then you should definitely keep reading this article.

Detecting Money-Making Scams

The offer may be tempting. Make loads of money for easy work. Land your dream job for the price of a few training materials. Work from home.

The problem is, these money-makers may not be real opportunities at all. The key is to know when you might end up on the losing end of the proposition. And keeping up your guard is a good place to start.

Spot an ad you like in the newspaper classified section or an online bulletin board? Make sure the company really exists. Visit the company’s Web site, search for it in industry directories (at the library or online) and call them directly. Don’t be afraid to ask questions, especially about job opportunities the company may be offering. Find out what the application process entails. If you’re asked for a credit card number or a bank account number (under the guise of running a credit check or setting up direct deposit), these are red flags. Be also careful of giving out your social security number unless you’re absolutely sure the business is legit.

Keep in mind that as you research money-making opportunities, you’ll want to think like a detective. Phrases such as "immediate job openings" and "no experience necessary," paired with non-specific job titles (like "customer service") or a promise to work from home can be warning signs. So are unrealistic salary promises ("You can make $10,000 a month!")

Beware also the poorly composed job posting. If the offer is written by someone not familiar with the native language of the country in which you are asked to work, then it may not be the real deal. A company that really wants to attract help would usually hire a translator for a professional-sounding pitch. Watch out for misspelled words and casual phrasing. And by all means, if you receive an unsolicited e-mail with an amazing money-making opportunity, delete it [source: Maranjian].

If you’re still considering a reply, visit the Better Business Bureau for up-to-date information about popular scams. You can also Google the name of the business along with the word "scam" or "review" and see what others have to say about the scheme.

The easiest way to spot a money-making scam? If it sounds too good to be true, it probably is.

What to Do If You're a Scam Victim

If you suspect a money-making opportunity is a scam, cease all contact with the fraudster. Sometimes he or she will string you along by asking for even more money so you can get back the funds you’re already owed. Then report him or her. Although it’s only natural to feel embarrassed when a scammer takes advantage of you (and your finances), it’s important to take action.

If you’ve sent a check or scheduled a payment using your bank account or a credit card, contact your bank or card issuer to stop the transaction. Tell them of the fraud, so they can monitor your account for suspicious activity. If the scammer has accessed personal information and opened credit or checking accounts using your identity, review your credit report and institute a fraud alert [source: Caregiver Stress].

The next crucial step is to alert the authorities. In the U.S., report the fraud to the attorney general’s office in the state where you live and, if different, the state where the money-making schemer lives. You also should contact the county or state consumer protection agency, the Better Business Bureau (in your area and the schemer’s area) and the Federal Trade Commission (FTC), a U.S. organization whose aim is to prevent deceptive business practices [source: FTC].

In addition, if the scam involved an Internet or e-mail component, you could report it to the FBI’s Crime Complaint Center. If the scammer used a legitimate Web site or Internet auction site to involve you in a money-making scam, lodging a complaint with the site — no matter where in the world you live — may give you an avenue to recoup some of your funds. Even so, it’s unlikely you’ll see much, if any, of your money returned.

Finally, don’t rely on Web sites offering scam recovery services. You could be entering into another scam. Not only will you not get your money back, but you may be asked to front more cash in an effort to recover your investment [source: Texas Attorney General].

Get It in Writing

In the U.S., the Business Opportunity Rule is governed by the Federal Trade Commission (FTC) and designed to protect consumers. If you’re thinking about buying into a business opportunity, sellers are required to give you a written disclosure, including any money-earning claims and the percentage of people who actually make those earnings. It’s illegal for sellers to make verbal claims contrary to anything in these documents [source: FTC].

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Author’s Note: Is there an easy way to spot money-making scams?

I’ve received my fair share of e-mails from African consulates promising that, in exchange for a small sum, they will be happy to relay my multimillion-dollar inheritance. Once I even received a check, an actual paper check, in the U.S. mail from a scammer. It was made out to me and included instructions. All I had to do is deposit the $5,000 and relay $1,000 to the sender. Like some scams, this one not only targeted unsolicited recipients, but threatened to turn them into criminals, too. Thankfully, I steered clear of launching a money-laundering career. I do have to admit, though, I stared at that check a long time … wishing it were true.

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