Financial fraud occurs when an individual or business uses social engineering, empathy, and emotional connections to convince another to give money or gifts assist in receiving a rare opportunity. Some types of financial fraud include debt elimination offers, employment offers, investment offers, romance and charity fraud, advanced fee offers, and the common “Nigerian Scam.”
Tips to Prevent Financial Fraud
Beware of promises to make fast profits.
Don’t assume a company is legitimate based upon the company’s website.
Research the company you are doing business with.
Ensure you understand all terms and conditions of any agreement.
Be wary of businesses that operate from P.O. boxes only.
Contact the Better Business Bureau to determine the legitimacy of a business.
Be wary of employment job postings that claim “No Experience Necessary.”
Be wary of unsolicited e-mails for work-at-home employment.
Debt Elimination Offers: An individual or company that advertises debt elimination agrees to work with the victim to reduce credit card and other financial debt. Some debt elimination companies are authentic and are true to assisting people with large amounts of debt. However, there are debt elimination companies that claim they can help but first require a deposit to assist in getting the paperwork started. Additional payments may be required to be made to the debt elimination company before any debt negotiation with creditors even begins.
Employment Offers: Those individuals looking for jobs might be approached by a company claiming to have job openings available or claiming to be involved in door-to-door sales. The fraudulent company will usually ask for money in advance prior to giving out instructions or products to be sold.
Investment Offers: A person claiming to be an investment broker offers “the chance of a lifetime” on an investment stock fund. The investment broker will ask for a large sum of money to be applied to purchasing stock fund(s). The investment broker will also produce records or documents showing a positive return on the stock fund and then request more money to purchase additional stock funds. In reality there is no stock fund and the suspect produces fictitious records and documentation to show the victim.
Romance/Charity Fraud: An individual plays on the emotional needs of the victim either as a romantic hopeful or as a charity interest. In either case the suspect attempts to get money from the victim to help out the “possible romantic interest” or the charity interest.
Advanced Fee Offers: A suspect offers a “Guaranteed” loan for a fee paid in advance. Usually the suspect states that he/she will obtain a loan from a legitimate lending institution but will need a percentage of the requested loan amount as a fee for paperwork.
“Nigerian Scam”: A suspect contacts the victim usually via e-mail and offers a chance to share a percentage of millions of dollars. Usually the suspect indicates that they are a foreign government official and that they need to move large sums of money to an oversea bank. The suspect requests money in advance to assist and offers a cut of the money once the money has been moved. They may indicate that the requested money is needed for taxes, attorney costs, bribes, etc.