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The biggest scams today and how you can protect yourself from them

  • The biggest scams today and how you can protect yourself from them

    Two recently released documentaries on Netflix and Hulu chronicle 2017's failed Fyre Festival, painstakingly laying out how con artist Billy McFarland stole more than $26 million dollars from investors on the back of his fraudulent ticket-selling company. The internet has been abuzz ever since, with the general consensus being that no one understands how these victims were scammed so easily. It turns out, it was probably much easier than you think.

    Masquerading as trusted brands, potential romantic partners, and even family members, scammers executed an average of one con every 11 minutes in 2017. The end result was 47,000 scam reports, and an overall drain on the American economy of $50 billion. Using data from the 2017 BBB Scam Tracker Annual Risk Report: New Trends in Scam Risk, Stacker rounded up the biggest scams in recent years. Explaining how these scams work in the real world, Stacker will show you just how easy it can be to lose your hard-earned cash to a con artist like McFarland.

    The scams are ranked by the BBB risk index which, according to the report, considers quantifiable factors like exposure, susceptibility, and monetary loss in order to provide the most accurate assessment of the impact and risk of each scam.

    Most scams utilize the internet to rob people of their money, while others like romance and family/friend emergency scams, prey on your willingness to go to great lengths for those you love. Chillingly, some of the scams on our list, like home improvement scams, are the result of con artists traipsing through your home and potentially spending time around you and other family members.

    Read on to find out which scams to which you might be most likely to fall prey and to learn some helpful tips that can keep you from ever becoming a victim.

    You might also like: Least trusted professions in America

  • #28. Healthcare scams (tie)

    -BBB risk index: 0.3
    -Number of reports: 646 (1.4% of all reported scams)
    -Percent of reports with money lost: 4.0%
    -Median reported loss: $139
    -Top means of contact with money lost: phone
    -Top payment method: credit card

    Healthcare scams come in many forms, but all involve someone either wanting your personal information for identity theft —under the guise of updating your insurance—or attempting to use your insurance to submit fraudulent medical charges. Most versions also include robocalls, texts, or emails from someone claiming to be a government official wanting your information. The best way to protect yourself? Never share your personal information with someone who contacts you without your request. You should instead call a trusted number from your healthcare provider to verify the legitimacy of the request.

  • #28. Scholarship (tie)

    -BBB risk index: 0.3
    -Number of reports: 15 (0.0% of all reported scams)
    -Percent of reports with money lost: 13.3%
    -Median reported loss: $1,594
    -Top means of contact with money lost: in-person
    -Top payment method: check

    The cost of higher education in America is paralyzing and often keeps many would-be students from pursuing college. A decent scholarship or grant offer can seem like a dream come true. Usually, when a scholarship is a scam, a person claiming to be a financial aid representative will contact you about a scholarship you never applied for or pressure you into applying for a “guaranteed” scholarship, both with a one-time processing fee. The BBB says that the simplest ways to avoid this scam are by remembering that it is generally free to apply for scholarships, asking about fees upfront, avoiding companies that tell you success stories that sound too good to be true, and asking lots of questions.

  • #27. Charity

    -BBB risk index: 0.4
    -Number of reports: 419 (0.9% of all reported scams)
    -Percent of reports with money lost: 11.0%
    -Median reported loss: $105
    -Top means of contact with money lost: in-person
    -Top payment method: check

    Charity scams come from an organization claiming to be taking donations to help a specific cause. You donate the money only to find out the charity or cause never really existed or that the charity grossly misrepresented how much of the money was actually going to the cause. These scams can be hard to identify as many scammers go to great lengths to create social media accounts for the charity or cause and even impersonate victims. In October 2017, a couple created a GoFundMe page for a homeless veteran and concocted a false heartwarming story that resulted in more than 14,000 people donating more than $400,000. To keep yourself safe, be sure to vet charities before donating using something like the BBB Wise Giving Alliance.

  • #26. Yellow Pages/directories

    -BBB risk index: 0.7
    -Number of reports: 165 (0.3% of all reported scams)
    -Percent of reports with money lost: 8.5%
    -Median reported loss: $558
    -Top means of contact with money lost: phone
    -Top payment method: credit card

    The Yellow Pages and other similar directories have decreased in popularity since the rise of the Internet, but scammers are still benefiting from them. Scammers contact a company claiming to represent a directory and request basic information—address, phone number, email, etc.—before prompting the employee to confirm the listing. Later, the scammed company will receive an invoice for a few hundred dollars, and if they call to complain, the scammer will reply that the employee verbally confirmed placement in their directory and agreed to the cost. These scams are always done over the phone making them hard to identify, but easy ways to protect yourself and your company include educating staff and training them to ask suspicious callers questions, researching the company the caller claims to represent, asking specifically about the terms and conditions, and having a clear process in place for inspecting invoices.

  • #25. Business email compromise

    -BBB risk index: 1.3
    -Number of reports: 222 (0.5% of all reported scams)
    -Percent of reports with money lost: 14.4%
    -Median reported loss: $446
    -Top means of contact with money lost: email
    -Top payment method: credit card

    The FBI calls business email compromise a “more sophisticated scam.” An employee will receive an email from an alleged coworker requesting they wire money to a supplier or business partner. Criminal groups who run this scam target businesses involved with suppliers in foreign countries and which routinely send large sums via wire transfer. In reality, there is no partner or supplier, you are sending the money directly to the scammer. Some tips to avoid this scam include being wary of sending money to a new vendor—or previously used vendor at a new address—without checking in with a trusted contact and always double checking the email address which, in case of scams, will use an address almost identical to a legitimate vendor's but may be one letter or character off.

  • #24. Moving

    -BBB risk index: 1.5
    -Number of reports: 64 (0.1% of all reported scams)
    -Percent of reports with money lost: 53.1%
    -Median reported loss: $486
    -Top means of contact with money lost: phone
    -Top payment method: credit card

    Moving can be an incredibly stressful experience, and finding out you've been scammed can make it infinitely worse. The most popular scam includes getting a quote from a moving company and sending a deposit, only to have the movers never show. Another scam includes companies quoting you a rate based on item weight, and then, on moving day, informing you your belongings are much heavier than projected and that the price per additional pound will be double the original quote. Moving companies can also scam you by never delivering your items meaning either your stuff is gone forever or you have to pay a hefty “ransom fee” to get your items returned. The best ways to avoid these scams are heavily researching to ensure the legitimacy of the company, keeping an inventory of your belongings, getting everything in writing, and never sending a full payment in advance of the move.

  • #23. Identity theft

    -BBB risk index: 1.7
    -Number of reports: 886 (1.9% of all reported scams)
    -Percent of reports with money lost: 5.2%
    -Median reported loss: $399
    -Top means of contact with money lost: phone
    -Top payment method: credit card

    In 2017 alone, 16.7 million individuals were impacted by identity theft and more than $16.8 billion dollars were stolen. With the right information, scammers can steal and use your identity to open a line of credit in your name, take money out of your bank accounts, or obtain services that they never pay for—just to name a few. Identity theft can be hard to uncover, as scammers often go to great lengths to keep you unaware such as ensuring all bills and statements are sent to an alternative address. Make sure to regularly check your accounts for unexplained withdrawals and check your credit score often to ensure no unauthorized accounts have been opened in your name. You should also carefully guard your personal information—keeping all personal documents in a secure location and never giving out information to unsolicited callers.

  • #22. Foreign money exchange

    -BBB risk index: 2.1
    -Number of reports: 128 (0.3% of all reported scams)
    -Percent of reports with money lost: 18.8%
    -Median reported loss: $965
    -Top means of contact with money lost: internet messaging
    -Top payment method: wire transfer

    Foreign money exchange is a scam being phased out as most millennials are aware of it and on guard against it. The most popular version begins with a fake Nigerian prince or a wealthy businessman who will spin a sad story, over email, about how they have had to flee Nigeria but have left their money and valuables behind. The scammer pleads for your help to retrieve their belongings and money, and in return, promise to award you a few of their millions. What follows are the additional fees, bribes, taxes, and legal costs after the initial bank transfer you agreed to—all of which you will be asked to pay up front. The easiest ways to avoid this scam are by never sending money to a person you only know via email, being wary of strangers offering you large sums of money, and always being suspicious of transactions that involve additional and hidden fees.

  • #21. Utility

    -BBB risk index: 2.2
    -Number of reports: 500 (1.0% of all reported scams)
    -Percent of reports with money lost: 9.6%
    -Median reported loss: $500
    -Top means of contact with money lost: phone
    -Top payment method: prepaid card

    Utility scams are often seasonal happening most often in the summer and winter when people are dependent on air conditioning or heat. Scammers pose as water, electric, or gas company representatives and contact you threatening a deactivation of service if a certain fee or bill is not paid immediately. The biggest red flag for this scam, as noted by the BBB, is when a company requests you pay with a prepaid debit card or wire transfer. A legitimate utility company will always accept a check or credit card payment. Never allow a utility worker into your home unless you have a pre-scheduled appointment and always call customer service to verify any requested payments.

  • #20. Credit card

    -BBB risk index: 2.4
    -Number of reports: 1,244 (2.6% of all reported scams)
    -Percent of reports with money lost: 14.1%
    -Median reported loss: $150
    -Top means of contact with money lost: website
    -Top payment method: credit card

    Credit card scams are very similar to identity theft scams and often share the same end goal: to make unauthorized transactions or steal your identity. Scammers will contact you claiming to be your bank or credit card company and ask you to verify your account information. Occasionally, the scam will be done over email requesting you click a link to confirm your information, but instead, the link downloads malware to your device. To entice you to give your information, these scammers often offer a better interest rate, inform you that they need to send you a new card as your old one has been compromised, or tell you that they need to verify a charge. In order to avoid this, consider how your bank or credit card company usually contacts you and check directly with your bank or credit card company using a trusted customer service number to verify the request or offer.

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