Warning Signs of Money Scams

Businessman Bribing Another Businessman With a Bundle of Cash
••• James Lauritz / Getty Images

Anybody can fall victim to an online scam. We all lead busy lives and we’re continually bombarded with “approaches” from scammers – it only takes a moment of inattention to fall into a trap.

How can you stay safe, when thieves are increasingly sophisticated and convincing? The best thing to do is pause before sending money and investigate where it’s really going. Knowing about common warning signs of money scams can help you spot trouble before it’s too late.

If you see any of the red flags listed below, proceed with extreme caution. They don’t necessarily mean you’re dealing with a scammer, but it’s worth slowing down before you part with your money. Here are the common signs of money scams.

Wiring Money

If somebody asks you to wire money, be careful. There is no way to reverse a wire transfer – once the money leaves your account, it’s gone, and you can’t ask the bank to “undo” the transfer. Thieves love wire transfers because the money is available for withdrawal almost immediately (before everybody figures out what they’re up to).

There are a few legitimate situations where wire transfers make sense, but they’re a bad idea if you’re not sure who you’re dealing with. Using your credit card to send the wire only makes things worse.

Unsolicited Approaches for Money

It’s not uncommon to get an email promising vast sums of money (or even a few bucks) for little or no effort. Sometimes these messages look like they were sent to you accidentally – and you’ve somehow had the good luck to stumble into a fantastic situation.

If something sounds too good to be true and it’s coming from somebody you don’t know, it’s almost certainly a scam. Why would that imprisoned prince search you out and contact you? If somebody has a great “business opportunity,” why don’t they just do it themselves instead of wasting time and money scouring the internet for more investors?

Selling for Anything Besides Cash

If you’re selling something that you’ve advertised online, be wary of accepting anything but cash as payment. Scammers have various ways to cheat you out of money (when you’re supposed to be the one collecting money – funny how that happens).

For example, they’ll try the classic cashier’s check scam or they’ll ask for your bank account information under the pretext of sending an electronic payment or wire transfer (then they’ll use that information to get into your bank account). If a buyer can’t show up in-person with cash, there’s probably a better buyer out there.

Handling Payments for Someone Else

There’s no legitimate reason for you to handle payments for somebody else. If you’re asked to deposit money into your account and forward it to somebody else, you’re likely involved in a scam. When you’re looking for work and these “jobs” come up, it’s hard to pass up the opportunity, but moving on is your best bet. At best, you’re being set up for a scam; at worst, you’re involved with something illegal (such as money laundering).

Threats and Hyperbole

Scammers' goal is to exploit your hopes and fears until you hand over your cash. To take advantage of your fears, they might tell you that you’ll go to jail, lose your job, or somehow face humiliation if you fail to make “required” payments (none of which they can accomplish legally). If something sounds all bad or all good, you’re not hearing the truth.

Unsecured Sites

Look for the lock (or “https” in the address bar) when doing anything sensitive online. If you provide personal or financial information to an unsecure site, it can be stolen easily – in fact, it probably is being stolen because you’re already at an imposter site. Any reputable bank, credit union, or online shopping site will require a secure connection.

If your connection is not secure, you might be caught in a so-called "man in the middle" attack, in which your usernames and passwords are collected for later use.

Emails That Look Not Quite Right

Sometimes you can find everything you need to know in an email. If you notice bad spelling and grammar, you might be dealing with an overseas phishing scam (a type of fraud where a user's personal data, such as passwords and credit card info, is stolen through an electronic communication like email). It also helps to look closely at any links (when you hover your mouse over them before clicking). Do they go where you think they should go?

How to Handle Online Scams

If you see any of the warning signs above – but you still want to move forward – how can you do so safely? Get more information. Research the person or business in question until you’re 100 percent certain that you’re not getting ripped off. Just remember that scammers can be very convincing and very patient – they’ll talk with you for hours (over many weeks or months) to make you feel comfortable.

Talk about the situation with a friend or relative, and look for similar stories online – you might be surprised at what you find. Check message boards in your community if it seems like a local thing, but keep in mind that many internet money scams are tried-and-true hustles, sometimes conducted from far away (so you’re likely to find good information with a general internet search).

Article Sources

  1. Federal Trade Commission. "Using Money Transfer Services," Accessed Dec. 5, 2019.

  2. Federal Trade Commission. "Prize Scams," Accessed Dec. 5, 2019.

  3. Colorado Attorney General's Office. "Cashier's Check Scams," Accessed Dec. 5, 2019.

  4. Attorney General of Washington. "Wire Transfer Scams," Accessed Dec. 5, 2019.

  5. Federal Trade Commission Consumer Information. "How to Recognize and Avoid Phishing Scams," Accessed Dec. 5, 2019.

  6. Federal Trade Commission Consumer Information. "How to Tell If a Website Is Encrypted," Accessed Dec. 5, 2019.

  7. Attorney General of Texas. "How to Spot and Report Internet and Email Scams," Accessed Dec. 5, 2019.