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Offers & Prizes: Don't Be Fooled

Elvira's phone rang. A friendly voice on the other line greeted her. It brimmed with confidence and excitement. She had won a brand new television!

To collect her prize, she just needed to verify some information like her Social Security and bank account number. If they matched the caller's records, Elvira would get her new television in a few days. She had to hurry since the offer was only good for the next hour. After the numbers matched the caller excitedly told Elvira her new television was on its way!

Elvira never got the television, but the scammer used the information he obtained to steal Elvira's identity and draft money from her bank account.

Cornerstone of Most Scams

Crooks target Senior Texans everyday through e-mail, regular mail and the telephone. Nearly every scam is designed to trick you into sending money or providing your personal information.

The first way scammers do this is to get you to believe something good will happen to you (like winning a prize) if you do as they say. The other is by scaring you into believing something terrible has or will happen to you (like your home will be foreclosed on or you will be arrested) if you don't do as they say. In either case, through kindness or bullying they try to get you to send them money or disclose your personal financial information.

Remember that no legitimate government agency, business or organization will make unsolicited contact with you and then ask you to provide your personal information. Nor will any legitimate prize give-away, government grant, lottery or sweepstakes require you to pay anything up front to claim your winnings.

Your best protection against scammers making unsolicited contact with you is to hang up and not respond to their attempts to steal your money or good name. Hang-up your phone, shred the correspondence, delete the email, or shut your door and call the police.

There are other ways seniors and others are targeted that you should be aware of.

Advance Fee Fraud

This scam is also often called a Nigerian scam and is one of the most common scams. The particulars of it can vary. For example, some might claim to be a foreign dignitary while others are disguised as a pastor. It almost always involves a contact from someone who assures you they can provide you a large sum of money if you send them a smaller sum first or provide your personal information. You can read more about Nigerian scams in the Consumer Alert section of our site.

No matter the story, don't be fooled. If you send someone money in response to an e-mail or letter, you likely never see it again. Many of these scams originate in Canada, Africa and Asia.

Lotteries & Sweepstakes

Scammers may contact you through the mail and by telephone claiming you have won a foreign lottery. Their mailers look legitimate and their pitch can be very convincing. They will ask you to send money up front and/or provide them personal information in order for you to claim your prize. Many will also send "certificates" by mail as proof of their goodwill. Once again, don't be fooled. This is a ploy to take your money and steal your identity. You can read more about foreign lotteries in this section and the Consumer Protection section of our site.

Counterfeit Cashier's Checks

Scammers can create counterfeit cashier's checks that look so real, bank tellers often can't tell the difference.

Daniel, living near Houston, received just such a check enclosed with a letter claiming he had won the lottery in Canada. The check was made out to him for six thousand dollars. He was told to deposit it and immediately wire half the money for processing fees. He did as instructed and sent the scammers three thousand dollars. Several days later the bank discovered the check was a fraud and Daniel had to pay the money back to the bank.

If you receive an unsolicited cashier's check, shred it and throw it away. It isn't worth the paper it was printed on.

Investment Seminars - No Free Lunch

You should be careful of investment seminars and sales meetings that offer you free meals or gifts to entice you to attend. Many of these seminars and meetings will then use extremely high-pressure sales tactics to get you to purchase their products or use their services. Don't let their pressure cloud your judgment. Be wary of anyone you don't know who asks to see your personal financial information. Also remember that any investment offering higher than normal returns, will always come with higher than normal risks.

Time Shares & Travel Deals

For some people, owning a time share or using a travel club makes sense. However, if you are interested in a time share or travel offer be sure to read ALL the fine print and know exactly what you are signing. Some time shares can never be cancelled or sold. Others may only be available to use during less desirable times of the year. Get all the facts in writing before making a purchase.

Make sure to get any travel offers in writing, including cancellation and refund policies from travel clubs, resorts or related companies. Some offers may have severe restrictions on departure dates, length of stay and consumers may be on the hook for a myriad of additional charges. Also make sure to confirm your reservations independently. Be sure your reservations are guaranteed and at a location you will be happy with for the price you are paying. Some businesses use travel offers to attract buyers for time shares. These "vacations" can involve enduring long, mandatory, high-pressure sales seminars.

SPAM and Online Advertisements

Unsolicited e-mail is known as SPAM. Never reply to it, click any links embedded within it or open any attachment within it for any reason. If it contains information about a product you're interested in purchasing, go to the vendor's Web site directly. For more information about SPAM and how to protect yourself, visit our SPAM page in the Consumer Protection section of our site.

Just because an advertisement exists on a trusted Web site doesn't mean the offer should be trusted. Web companies sell advertising space on their sites as a source of revenue. Most sites usually have disclaimers explaining they do not endorse their advertisers' statements. Many online advertisements make outlandish offers that are too good to be true. These offers usually contain conditions buried in small print that are not beneficial to you as a customer.

Automatic Bank Drafts

Weigh the convenience of automatic bank drafts with the liability that comes with them. If you don't have a long, established relationship with a business, think twice before authorizing them to make automatic drafts from your bank account. In some situations unscrupulous businesses will knowingly draft more than they agree to withdraw for fees.

Also, many companies do not cease their automatic drafts while resolving a disputed bill.

For those who do use automatic bank drafts, consider opening a bank account solely for that purpose and deposit limited funds, as needed, to cover expected expenses.

Revised: May 06 2010