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3 Scams to guard your personal finances against

How to protect your personal finances from 3 current fraudulent schemes designed to rid you of your money.
how to avoid financial scams
how to avoid financial scams

how to avoid financial scamsAs much as we do not like to think of ourselves as susceptible to scams, almost anyone can be a victim in a high tech, 24 hour, wireless world.

Scam artists exist on every level. Some take the time to create elaborate schemes just to milk us out of hard earned money. Some take the time to prey on our emotions in order to drain our bank accounts.

One way to put a stop to this fraud is to conduct due diligence and research the reputation of any company we plan to do business with.

Sometimes the information is right on our state’s attorney general’s website. Below are recent scams you should watch out for and be careful to avoid:

1. Mortgage Rescue Scams
Homeowners who get behind in their mortgage are often enticed by companies promising to stop the sale of a home or negotiate a mortgage loan modification.

Anything involving your home can be very emotional and understandably many homeowners just want some relief.

While there are some legitimate companies that can help, the growing housing crisis has given rise to scam mortgage rescue companies.

The scam typically involves the homeowner paying money upfront to prevent a foreclosure. Once the scam company has the money, the homeowner never hears from them again and no work has been done to prevent foreclosure. Unfortunately many homeowners have found that it is too late to save their homes once they discover the scam.

Homeowners have been tricked by mortgage modification scam artists who take thousands of dollars in upfront fees. Some homeowners do not believe they can  negotiate their own home loan modification without paying any fee.

Before you contact a mortgage rescue company or if one contacts you, check your state's attorney general office to see if the company is legitimate. Also, check with the Better Business Bureau to see what, if any, complaints homeowners may have registered.


Any homeowner looking for help should visit government sources such as HUD.gov for assistance or non-profit organizations such as Hope Now or Naca.com. The governments' services as well as the non-profit services are free.

2. Email Phishing
Scam artists have saturated the email accounts of unsuspecting consumers with fraudulent alerts that request verification of bank account information. Consumers must be mindful that a financial institution will never ask you to verify your social security number or any other personal information via email. Scam artists use the information obtained from the emails to steal your identity.

Some scammers even go as far as directing you to a link that resembles your bank. Whenever you sign onto an online bank account or make a purchase with a credit or debit card online make sure the site is encrypted and the website address line starts with “https” not “http”. The “S” in https stands for secured. A secure website ensures no one can see the information being transmitted to that website. Never enter your credit or debit card on a website with http in the address. It must say https.

3. Letter of Credit Fraud
Business investors have a new fraud to watch out for in the form of a letter of credit. A letter of credit guarantees payment to the seller. Essentially the letter of credit is a promise to pay. The seller is ensured they will get paid from the buyer once the agreed upon terms of the letter of credit have been executed.

The letter of credit is not an investment tool. Scammers are creating fraudulent letters of credit and presenting them to investors as an investment instrument. The scammers offer investors an opportunity to purchase the letter of credit at a discount in exchange for immediate funds. Scammers often offer 100-300 percent return on investment.

If it sounds too good to be true…then you should know something is fishy.

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