8 common scams: How to spot them and stop them -- Page 2
By Amy C. Fleitas • Bankrate.com

If you do decide to pay a company to help you find a job, ask for all details of its services in writing before you agree to anything. Some companies may promise jobs, but just deliver a stale list of job openings they found in newspapers or online.

Ignore offers that promise insider information for federal government jobs. All federal government jobs are announced to the public.

Money-making schemes
When people are down on their luck, they may turn to get-rich-quick or money-making schemes. Somehow the scammers make old scams, such as the Nigerian scam and pyramid schemes, seem like plausible ways for you to make a lot of cash in a hurry.

You've probably been courted by the Nigerian scam, also known as the 419 scam (named after the section of the law pertaining to it). It comes in e-mail or letter form and may start, "Dear Sir, I got your information from a confidential source.... " The letter then goes on to tell you a story of a huge amount of money hidden overseas that the writer of the letter wants to put in your bank account. In return, he promises you a big cut of the cash.

Long story short: Any checks you receive from this person will be fake. The con will ask you to keep part of the money and send him the difference. Shortly after you send him the difference by mail or wire, his check bounces, and you owe the total amount to your bank. Warning: Sometimes, people are told by their banks that the check has cleared, so they wire the difference to the Nigerian scammer. But don't be too sure: The scammers sometimes forge a cashier's check, which fools the bank into prematurely reporting the check as "cleared." Once the forgery is discovered, the bank will try to hold you liable.

Like the Nigerian scam, pyramid schemes seem like a fast way to make a lot of money.

If you've never heard of pyramid schemes, here's how they work: One person convinces several people to join a club or business. The only way to make money is to get more people to sign up, too.

For example, certain groups that call themselves "gift parties" require that everyone who joins donate $4,000. All the cash goes to the person who is at the "top." You are told that as soon she has received a certain amount of money, she will step down and nominate the next person to be on top.

While these schemes seem like an easy way to make cash, inevitably, the only person to make money is the one at the top -- who usually gets busted or blows town before the group figures out that the math doesn't work.

The old axiom is true. If it's an easy way to make money, it's probably illegal, a scam or just a really bad idea.

Bogus charity
No one wants to be the bad guy -- the selfish lout who can't spare a little change for the orphans of September 11 or children who are cancer patients. But that doesn't mean you have to be a sucker. If you want to give to charity, by all means, give away -- but check out the charity first.

Never give payment information to anyone calling or e-mailing you, claiming to be with a charity. Ask them to send you paperwork on their organization. Then research the organization online and with the Better Business Bureau to make sure it's legitimate -- and that you've got the right contact information. For example, an e-mail circulated in 2001 claimed to be from the Red Cross. It said it was raising money for victims of Sept. 11. While the Red Cross is a legitimate charity, the e-mail led people to a Web site set up by con artists.

If the charity representative pressures you to give immediately, get even more suspicious. Legitimate charities withstand scrutiny, and never hesitate to prove they are who they say they are.

Identity theft
Identity theft is not new, but it is on the rise, running rampant over the Web at breakneck speed. The thieves need only a few elements to victimize you -- usually, your name and Social Security number will do. Obtaining this information is often intertwined with other crimes -- advance fee scams and bogus job offers among them.

The name for this scam is "phishing" -- as in fishing for your information but with a "ph" as in "phony."

Almost any scam can be sprinkled with a smattering of identity theft -- advance fee scams, fraud jobs and online auctions included. All it takes to become a victim of identity theft is a leak of your personal information. Your garbage may be targeted. (That's why you should shred anything that has your account numbers, Social Security number or that says you are "pre-approved" for credit -- before you throw it away.)

Telemarketers and e-mail spammers may attack you under the guise of protecting your accounts, auction transactions and credit cards. Some even pretend to be law enforcement or government agents.

If anyone from any company you do business with or that claims to be a representative of a government agency (like the police or FDIC) demands your personal information or an immediate payment for any reason, ask for a number and tell them you will call them back. Then get the number from a different source (bank statements, credit card statements or the phone book) and ask if the call was for real. Four bazillion dollars says it wasn't.

If this bet is wrong and there is some particularly friendly company making these sorts of calls, it won't mind if you say you need to call back.

Remember that clever phishing con artists are always looking for a new angle -- they may say they are from various different companies or agencies. Don't get caught off guard.

Products that are too good to be true
If it seems too good to be true, it probably is. Remember that a con artist makes a career of using excuses and explanations to lead you away from your common sense. When dealing with your money and personal information, never allow yourself to be rushed, threatened or persuaded against your judgment.

Don't believe offers that claim to have found a way around the law -- like reasons you don't have to pay your bills or taxes, promises to clean up your credit history or claims that you can get a new Social Security number or a new driver's license if yours was revoked. And claims of "miracle diets or pills" that can enhance your features or help you lose weight should be regarded with skepticism at best.

Keep in mind that offers that are too good to be true aren't confined to the Internet or telemarketers. They can also be found in mail offers, the ads in the back of magazines and in brick-and-mortar stores. Stay vigilant and trust your gut.

Stay up to date on the latest scams as they happen. Bookmark our Scam Alert page and check back often. If you know of a new scam, e-mail Amy Fleitas.