These are tough times. Many people have lost their jobs or fear becoming unemployed. Credit card debt is high and mortgage payments may be hard to make. Recessions lead to difficult financial situations for many families, making them extremely vulnerable. This has made scamming people out of their hard-earned money a growth industry. I’m going to highlight two types of scams in this article; (1) pay in advance scams and (2) pfishing scams.

PAY IN ADVANCE SCAMS

I remember the good old days when you would get an email from some prince in Nigeria who supposedly had 100 million dollars that he needed to transfer from his country to a bank account in the United States. This guy was so gullible that he would trust you, a complete stranger, to put his $100 million in your account, after which he would give you $20 million for your assistance. Of course, as you corresponded with the prince, he would ask you to wire him $10,000 to his account in Nigeria so he could free up the $100 million. Predictably, those who wired the money would never hear from the guy again and their funds would end up in some foreign bank account.

This “Nigerian prince” scam was so unbelievable that it was difficult to feel sympathy for anyone who fell for it. Unfortunately, the quantity and quality of scams has exploded over the years. Television, radio and newspapers are rife with scam commercials and ads. Don’t ever make the mistake of believing that just because a commercial is running on radio or television that the advertiser has any credence. Remember, the networks and newspapers need ad revenue and they’ll take it from almost anybody. New scams crop up almost daily so it is hard to keep track. Examples of some of current “Pay in Advance” scams are listed below.

1. “Hire our firm and we will negotiate with the IRS to write off most of the back taxes you owe. Our experienced, former IRS agents will get tough with the IRS and we will save you thousands of dollars in back taxes.” These companies want money up front before they take your case. Then, despite their “best efforts” you’ll end up paying your back taxes anyway.

2. “Hire us and we will negotiate with your credit card companies to write off most of what you own them. We know the secrets that only the credit card companies know. When we’re done dealing with them, you’ll owe only a fraction of your current credit card debt.” Of course, there is an up front fee to retain their services. When they’re done with you, you will wish only one thing; that you had used their fee to pay down your credit card bill.

3. “Hire us and we will get you your US government stimulus check within two weeks! You will receive your US Treasury check for $8,000 and you’ll only have to pay a $500 fee in advance to handle the paperwork.” In this case you’ll be lucky to get even a phony treasury check after you’ve given them your $500.

4. If you have an apartment for rent and list it on the internet, within minutes you’ll receive an email something like this: “I’m coming in from England and I want to rent your apartment for a whole year. Even though the monthly rent is only $1,000 a month ($12,000 a year), I’ll send you a $20,000 cashiers check in advance. There is one small detail; after you get my check for $20,000 could you wire back $2,000 to my uncle’s account in Manchester so he can buy my airline ticket?”

5. “Save money by refinancing your real estate mortgage”. Be careful. Internet lenders have much higher default rates than your typical “walk in” bank or savings and loan. I recommend that you talk to a real person, at a real desk, in a real building, in a real financial institution that has been in your community for at least ten years.

REMEMBER: All “Pay in Advance” scams have one thing in common; they want your money up front before they deliver any tangible benefits. If they send you a cashier’s check, your banker won’t be able to tell if it is legitimate or not. You can put it in your checking account, but the funds aren’t good until it clears. Of course, after a week or so, your bank will inform you that the phony “cashier’s check” wasn’t good. By this time you’ve wired them real money, the deal is over and you will never hear from them again. If any vendor wants one cent in advance, or promises to send you a check on the condition that you will later wire them money, immediately hang up the phone or send that email to your “spam” folder.

PFISHING SCAMS

“Pfishing” Scams (pronounced “fishing”) are conducted 90% via email, although some scammers have tried to conduct them by phone. Scammer computers send out millions of email messages, pretending to be your bank, your credit card company, the US treasury, the Social Security Administration, PayPal, EBay, or any other legitimate company, bank, or organization. The email usually contains the “logo” of the bank or credit card company, and it looks REAL and extremely legitimate! (Remember, email scammers can cut and paste a legitimate-looking logo in a nano-second.)

Pfishing websites are sneaky…very sneaky, but they have one thing in common; they want you to reveal your credit card number, your social security number, your checking account number, or some other sensitive financial information. Once you’ve fallen for the scam they will charge items to your credit card, take money out of your checking account, or compromise your identity.

Pfishing emails always contain a link, supposedly to the website of the bank, credit card company, or government agency. Never click on that link because, while the new page that pops up will look exactly like the “sign in” page for your bank or credit card company, it is a bogus page. If you enter your username and password on the phony page that this link has created, you will have given this sensitive information directly to the scammer. The scammer will immediately log in to the legitimate company website (using the username and password information you’ve provided) and take a shopping spree with your credit card or checking account.

To avoid Pfishing scams remember two things:

1. Banks, businesses and government agencies NEVER send you emails with a link asking you to verify information or to log in. Instead, they will send you a letter via US mail, explaining the situation. They will then ask you to type in their website in your browser so that you reach the legitimate website.

2. Never, ever, click on a link inside an email that supposedly comes from a financial institution or a business where you have credit. Instead, type the website address of the business or institution directly into your browser. For example, if the email is supposedly from Wells Fargo bank, don’t click on the email link. Instead, if you want to contact Wells Fargo go to your browser and type in http://www.wellsfargo.com. Then you will know for sure you’re inside the REAL Wells Fargo website. While Pfishing is less obvious than “Pay in Advance” scams, it can be much more hurtful. One oversight, divulging your financial information on a phony link, could cost you thousands of dollars along with the real risk that your identity might be stolen.

While seniors and young people are particularly susceptible to scams, anyone can become a victim if they are not careful. In my opinion, scammers are some of the worst human beings on earth because they knowingly defraud those who are financially vulnerable, leaving them in even greater despair.