Fraud and Schemes -
Warning Signs and Prevention Tips

 

 


Telemarketing Fraud

Warning Signs:
  • You live alone and enjoy talking to anyone calling
  • You believe it's rude to interrupt a caller or to hang up
  • You must pay money up front for taxes or fees to participate
  • You must make an immediate decision, before the call ends, or the offer will be rescinded
  • You are called more and more frequently by a multiplying variety of telephone solicitors

Preventative Steps:

  • Never talk to strangers on the telephone - they are not calling to wish you a good day. They are invading your privacy - as though they have walked into your home.
  • Sign up for Colorado No Call 1-888-249-9097 or www.coloradonocall.com
  • Use an answering machine, voice mail or Caller ID to screen calls.
  • Never, under any circumstances, give any portion of your credit card, bank account, or Social Security numbers to a caller.

Mail and Internet Fraud

Warning Signs:

  • You play sweepstakes daily because you think you need extra money, holding out hope you will win a big prize some day
  • You believe because your mail is delivered by the U.S. Postal Service, it must be legitimate
  • You open and read all of your mail because many pieces look like official government documents or heart-felt solicitations for charity - and you don't have anything better to do
  • You're getting the same offers through e-mail that you used to receive through the mail

Preventative Steps:

  • Even though it may be fun or give you something to do, stop participating in sweepstakes, lottery, and contest offers.
  • If you were to truly win something, you NEVER have to pay any fees, taxes, or costs of ANY kind before receiving your winnings - that's the law!
  • Don’t even give temptation a chance. If you receive a mailing or e-mail that promotes sweepstakes, lotteries, charities, credit repair, work-at-home offers, or a Nigerian letter, throw the envelope away or delete the e-mail without opening it.

 Home Improvement Fraud

Warning Signs:

  • A contractor solicits you at your door, insisting you have a problem which must be repaired right away
  • A contractor offers a bargain price or claims to have materials left over from another job
  • A contractor requires a substantial payment in advance or charges significantly more after the work is completed
  • An inspector appears at your door, claiming to work for the city or a utility company and must come into your home to inspect your water heater, furnace, or back yard

Preventative Steps:

  • BEWARE door-to-door contractors who use high-pressure or scare tactics to get an immediate decision. 
  • DON'T do business with someone who comes to your door offering a bargain or claims to have materials left over.
  • Get at least 3 written bids. DON'T always choose the lowest bidder--almost all complaints to the DA's office are contractors with very low bids. You get what you pay for!
  • Require the contractor to use a written contract that lists materials, costs, and the completion date.
  • Don't allow any stranger into your home, no matter who they claim to be. City inspectors do not go door to door!

Predatory Lending

Warning Signs:

  • You've fallen behind in your mortgage payments or you are already in foreclosure
  • You're getting phone calls and visits from companies offering to help you pay off your debts
  • You're receiving numerous fliers in the mail or on your door offering low interest cash loans
  • A friend, advisor or relative asks you to sign some forms - you do, without reading them

Preventative Steps:

  • Beware of companies who contact you in person or by fliers offering a foreclosure relief service.
  • Don't sign any forms or papers without reading and understanding what you're signing. If you're uneasy or feeling pressured, get advice from a lawyer or other advisor.
  • Don't deed your property to anyone. First consult an attorney, a knowledgeable family member, or someone else you trust completely. Once you sign legal papers, it can be difficult, or even impossible, to reverse the action.

Financial Planning and Investment Fraud

Warning Signs:

  • High pressure sales tactics with an insistence on an immediate decision;
  • Unwillingness to let you discuss the deal with another advisor or to get a second opinion;
  • A guaranteed investment or one with 'no risk';
  • Unwillingness to provide written information, including state securities registrations and verifiable references;
  • A suggestion that you invest on the basis of trust or faith.

Preventative Steps:

  • Surround yourself with several advisors - don't become solely dependent on one financial advisor or consultant.
  • Thoroughly check out any offer - don't be rushed into making a hasty decision. Contact the Colorado Division of Securities at 303-894-2320 if you have questions.
  • Carefully review your financial statements and look for signs of unauthorized or excessive trading. Periodically check your account online or by phone with the fund managers.
  • If you have trouble retrieving your funds, don't let a false sense of trust keep you from demanding a return of your investment.

Care Giver Fraud

Warning Signs:

  • Unusual activity in bank and credit card accounts
  • Caregiver tries to isolate the victim who comes to rely solely on the caregiver
  • Caregiver has total control over finances and has all financial statements mailed to him or her.
  • New acquaintances appear on the scene and the adult is either completely charmed, or fearful of the caregiver

Preventative Steps:

  • If your Power of Attorney or anyone else suggests you make a change in your assets, your investments, or insurance, always get two or three other opinions from within your team of advisors. Only a potential crook will not want you to discuss the change with others.
  • No matter how much you know, love or trust someone, never sign papers you have not read or do not understand.
  • Even if you have a representative payee, Power of Attorney or other advisor who manages your finances, insist on receiving and reviewing copies of all bank and financial statements.