Be Alert! 3 All-Too-Common Financial Scams

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How savvy do you think you are when it comes to fraud?

The sad truth is that how you answer this question isn’t particularly relevant. Scammers have made fortunes off people who might otherwise have convinced themselves they were completely savvy and well aware of the potential for fraud, but still found themselves sucked in by a good story.

As a result, being on your guard and aware of how these scams work is essential. Below are three of the most common financial scams– so you can keep hold of your hard-earned cash.

#1 – Legal Fraud

One of the reasons legal fraud is more common now is due to electronic communications. We’re all quite used to dealing with transactions online, so we think nothing of following through with advice we believe is coming from our lawyer.

Here’s how the scam played out in a recent case in the UK: The victim knew they were due to pay a large amount of tax on an inheritance. Their lawyer emailed them with the final total and details for payment. The victim paid the money, even getting a receipt for the payment. They then called their lawyer and were horrified to be told no such payment had been received.

What happened? Simple; the legal firm had their details and their email hacked, with the scammers able to direct funds to their own account as a result. The only way to avoid this kind of scam is to never pay money to an account you have been given via an electronic message; always call to verify you have the right details.

#2 – Probate Fraud

Probate fraud is increasingly common, and comes in a variety of different shapes and sizes. It’s a fraud that relies on lack of oversight. Most of us know people who haven’t done much for their estate financial planning after their death– you might even be in that group of people. Let’s face it: none of us like to think about our own demise, so unless pushed, we don’t put much effort into taking care of our affairs– and we assume others are the same.

So when these scams take place, people are more than willing to believe it’s possible that someone died without taking care of their estate. The scam usually plays out like this: an email or letter is received from a probate lawyer, most often in another country. The unknowing victim is told that someone has died; a distant relative of theirs, in fact. Often, these scams use genuine obituaries — which often share a surname with the intended victim — to make the entire act ring true.

So where’s the scam? Simple: the victim just has to pay a clearing probate fee and then they’ll receive their windfall inheritance. It goes without saying that when the victim pays that fee — potentially going into debt to do so– all communication about the will of their great-great-great Aunt Eliza vanishes without a trace.

#3 – Nigerian Scams

“Surely we’re all familiar with these now?” you might think, but you’d be surprised. These scams — known as 419 scams — are still making huge amounts of money for the perpetrators.

The victim receives an email claiming to be from a wealthy person overseas, who can pay a fortune if the victim will just help them to release funds due to a bureaucratic issue. The victim sends the money, but obviously receives nothing in return.

You might be well aware of these scams, but your elderly relatives might not– so it’s worth having a brief chat just to ensure they don’t fall victim to one of the internet’s oldest cons. Keep an eye on these and the aforementioned financial scams, and you can be sure you and your family are protected.