How to Save Money don’t get Scammed

Scams take many forms: overseas lotteries, get-rich-quick schemes, work-from-home jobs and hundreds more, but the fact is that unless you’ve been ripped off in the past you probably don’t know how to recognise a scam when you see one.

So let’s commence your education!

The people who design the scams are clever. Most scams look like the real thing and they appear to meet your need or desire. They often piggy-back off the reputation of schemes which are proven to be legitimate, for example, not all lotteries are fake, not all work-from-home schemes are rip offs. Unfortunately it can be extremely hard to tell the difference.

Firstly, let me clear up a couple of myths. Many people hold the belief that every business is OK because they are all vetted by some kind of government authority. This is false. While government agencies in Australia and most other developed nations work hard to shut down illegal scams, the scammers might rip off hundreds people before they are caught.

Another dangerous myth is that there are quick short cuts to “getting rich”. People claiming to be millionaires regularly hold seminars or write e-books to explain how you can make a fortune by simply following their advice: perhaps it’s a secret stock market plan, a way to make millions with real estate you don’t own, or participating in online surveys from your own home computer. <>Do any of the above scams sound familiar? You probably see them on the internet all the time. Ask yourself: if a person knew the secret to instant wealth, would they want everyone in the world to find out about it? And if they’re already a millionaire, why would they spend all their time telling people about itand why would they need to charge people money for it?

Keep in mind, however, that not all scammers go for the “get rich quick” headline. Some will entice you with a smaller but equally attractive proposition: the opportunity to quit your day job and earn the same money by working part-time from home. These scams run rampant on the internet and often start by only requesting a small outlay, of say $40 for which they will send you an e-book containing the secrets of wealth.

You might be thinking, “I’m willing to gamble $40 for the possibility of never having to work again! It’s worth it.” Once you hand over the $40 any number of things may then happen:

* You get nothing and never hear from them again

* You get information via email that is of little assistance

* Worse than that, they may start harassing you for more money, trying to convince you to “upgrade” to the next step or pay some kind of taxes or freight cost (telling you that you’ll earn the really big dollars if you just pay them a little more). This cycle can go on forever and under the infamous “Nigerian Letter Scheme” people have been ripped off for tens of thousands of dollars.

* They may pressure you into giving them your bank account or credit card details for some seemingly legitimate purpose, e.g. to deposit funds into your account, or to keep your credit card details as “security”.

Here is a shortlist of some the most common scams:

* Overseas Lottery an unsolicited letter, call or email telling you that you’ve won cash or prizes in a Sweepstakes or Lottery you did not enter.

* Chain Letters

* Pyramid Schemes a business proposition where you pay a “joining fee” and the main activity is the recruitment of new members. These are illegal in Australia but some people will try to convince you that their scheme is not illegal because they have included some kind of dummy product that is changing hands.

*Ring Tone Scams – you might be attracted to an offer for a free or low cost Mobile Phone ring tone, but what you may not realise is that by accepting the offer you are actually subscribing to a service that will keep sending you ring tones and charging you a premium rate. (e.g. $10 per week subscription fee) There are legitimate companies selling ring tones, but there are also scammers who will try to hide the true cost of taking up the offer.
Of course, there are many more – too many for me to list here!

The golden rule is: “If it sounds too good to be true, it probably is.” Now I know that this is a pretty negative mantra – those “positive thinking” and “life management” coaches would have a heart-attack if they heard me preaching such negativity! But they are not thinking about your best financial interests.

Here is how you should react if you receive a suspicious offer:

In person: Say NO THANKS and walk away
Via Phone: Say NO THANKS and hang up the phone immediately
Via email: Delete the email immediately and don’t click on any links
Via post: Throw it away

If you are concerned about saying no because you think the offer could be legitimate, consider the following course of action.

Be especially wary of a salesperson that tells you that “you must take up the offer today”. If the offer is legitimate, there’s no reason the salesperson cannot give you some information to take home and examine at your leisure. If the offer comes from a Telemarketer, they should be happy to post you some information or give you a return phone number so that you can call back if you are interested at a later date.

Still interested in the offer? Log on to the Australian Government’s Scam Watch website: (or other governmental “fair trading” website relevant to your location). This is actually an excellent website for anyone around the world and will help you identify whether the offer is a known scam.

OK, if you are still convinced that the offer is not a scam, then write down any questions you have. Take a friend or relative with you (preferably the toughest, most analytical, least-easy-to-impress person you know!) when you talk to the salesperson again. Make sure you are completely satisfied with the answers to all of your questions and get everything in writing.

I’m not saying that every opportunity is really a scam. There are many legitimate lotteries, employment and investment opportunities out there.

If you stumble on a great investment, good for you! By completing all of the above steps you are doing your research something EVERY investor should do.

But if, like many money-making opportunities, it turns out to be a scam, don’t loose sleep over it. Making money takes time and on the SmartPiggy website ( you’ll find heaps of simple, long-term proven strategies that will help you build wealth. It won’t happen overnight, but you will get there!