Don't Get Scammed

[question everything]

APRIL 26, 2009

Don't Get Scammed

By JONNELLE MARTE
WSJ

A distraught twentysomething woman called the Better Business Bureau in Louisville, Ky., one day last month. She'd wired $21,000 to a scam artist who had requested the money as "collateral" for a low-interest $100,000 college loan. Crying hysterically, she told her story but then hung up before giving her name or before anyone could help her.

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Many young consumers have lost cash to scams. Of those polled in February by Credit.com, a credit-education Web site, a quarter of people ages 18 to 34 admitted to losing money in a scam in the past six months. Other research suggests that more than 40% of recent fraud victims are in their 20s and 30s. Overconfidence on the Web has a lot to do with it, say the experts. And tough times can make people less skeptical when something good comes along.

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- Never, ever, wire money. It doesn't matter if you've signed a lease, a contract or any other legitimate-looking form. Scam artists will gain your trust by producing official-looking documents, but when you're asked to wire money it's almost always a sure sign of a scam..

- Don't give cash to get cash. Scam artists have been robbing people like the young woman in Louisville by convincing them they're more likely to qualify for a loan if they make some collateral payments... While it's common to make a down payment for a loan to purchase an asset like a house or a car, you should never have to pay money to get a cash loan.

- Initiate the conversation. Don't give out personal information if you get a call or email from someone claiming to be from a bank or credit-card company. Hang up and call the number on the back of your card or go visit the bank, so you can be sure you are talking to a legitimate representative of that firm. Take out loans only from institutions that you've contacted.

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- Report it. If you fall for a scam, don't beat yourself up, but do report it. File a complaint with a Better Business Bureau (bbb.org), the Federal Trade Commission (ftc.gov) or your state attorney general, which will alert consumers and law-enforcement officials of any trends. The FTC does not resolve individual incidents but complaints may lead to the investigation and prosecution of major scams. Local Better Business Bureaus try to reconcile most cases and report the results of each complaint on their Web sites. Finally, says Adam Levin, cofounder of Credit.com, remember this old bit of wisdom: "If something sounds too good to be true, it probably is."

http://online.wsj.com/article/SB124071186541456521.html (subscription, maybe)