Wealth accumulation is the goal of many individuals. However, some resort to financial scams in order to get money by taking advantage of other people.
No matter what you do, it is always better to err on the side of caution and avoid a scam or scheme. If you end up in a fraudulent matter, you’ll wish you had never dipped your toes into something fishy.
Want to know what financial scams you should avoid in order to stay afloat with the valuable money you already have? Read on.
Ponzi and Pyramid Schemes
In a world where investing your money in businesses is touted as a great financial move, these financial scams come up as a reason to be cautious when investing. The Ponzi Scheme, named after Charles Ponzi, may sound attractive at the onset, especially as it promises yields without doing any work. Some victims were able to ‘earn’ money for a time.
Little did they know, however, that the source of their yields are the registration fees of new recruits, which means that the fake business is not earning any money at all. Moreover, the finite pool of funds is bound to run out once the system fails to recruit more members.
Similar to the first one, the Pyramid Scheme also depends on the registration fees of new members. However, in a pyramiding scam, it is the members who are required to recruit newbies. Shady multi-level marketing companies operate closely like this, except for the fact that they incorporate sales as part of their business. Long story short, these are business dealings you do not want to get mixed up in.
Another scheme you should watch out for are phishing emails. You know the emails you receive from your bank? Phishing emails are just like those except that they ask you to verify or change your financial account’s credentials. Once you enter the correct information, you can say goodbye to any assets you have on that account, because you have just made all your personal information vulnerable.
What’s interesting about these scams is that they appear legitimate. From the wording of the email to the webpage design, it is easy to be victimized by these emails. If you receive such emails, it is better to get in touch with your bank and ask if it is legitimate first.
Processing Fee Scams
Aside from phishing emails, you should also avoid official-looking emails offering something that requires you to send money online. This includes the ‘Nigerian Prince’ asking you to temporarily store his fortunes into your bank account, but requests that you send money to cover the processing fee. The same applies to those telling you that you have won the lottery or international sweepstakes.
Online Job Clients Who Run Away with Your Work
Individuals who earn their keep through online work can also encounter these swindlers. If you have worked for a client who did not ever pay you for the work you completed, then you know what this is about.
Essentially, these people pretend to offer compensation for your work but refuse to pay a dime after the completion of the job. What’s worse is they tend to completely cut off any form of communication with the service provider, leaving the professional with no earnings for the output they produced. This is easier to catch if you are familiar with client communication, but it still worth watching out for.
With various financial scams popping up left and right, it is important to remain vigilant when it comes to money and your financial information. This way, you can keep your money safe from these swindlers. Good luck and stay alert.