How to spot a scam in ten steps or less
No one wants to be taken advantage of, but there are plenty of unscrupulous people who want your money and are devising ways to get it.
Scam artists, unfortunately, have always been around us. In the past, they may have been easier to spot, but they are getting craftier and to me in more abundance.
Here is my list of how to spot a scam in ten steps or less:
Step 1 - the unconventional transaction
An unconventional method of executing the transaction could be the first sign of a scam. If the first question you ask yourself is, “That’s a strange way of doing that?” you should probably stop there.
Step 2 - an unsettled focus on the making of money
Whether you are looking for an investment opportunity or are in the real estate business a constant push on the amount of money you will make from the deal is a red flag for me.
Step 3 - the prepared run-on email or pitch
You probably received a call from a pitch-person who is relentless and will not take “no” for an answer. Alternatively, you receive what appears to be a genuine call that is followed-up by a prepared email or multiple documents that are never-ending in length.
Step 4 - lack of documentation or complete paperwork
The opposite of flooding you with too much information is not receiving enough. Many sales and investment transactions have required disclosures. Watch for misspellings, incorrect grammar and forgetting to update entries from the previous contact as this could smell of foreign origination.
Step 5 - offers coming-from or going-to another country
Not all opportunities coming from another country are scams, but if someone contacts you and their information to you includes one or more of the steps mentioned--watch out.
Step 6 - requiring money up front
Never send money up front, this also goes for the transferring of the title of assets. Never give any bank account or credit card information upfront. Sending money is the last step in a long process. Also, be careful of upfront deposits or fees--there are some laws against this.
Step 7 - the good deal that will soon be gone
The pressure of a deal that will not last or a salesperson not allowing you time to consult with others is an indication to turn and run.
Step 8 - your gut feeling that they are a slimeball or the deal is bad
Go with your gut--your first instinct--as it usually is correct.
Step 9 - it is too good to be true
Extravagant guarantees, promises of a high return and the ability to “double your money in no time,” are indications that the deal is probably “pie in the sky.”
Step 10 - something for nothing
Which leads me to my last step--there is always a risk. Many deals, offerings, and investments are legitimate, but sure to use these steps as a litmus test because you never receive something for nothing.
Burt M. Polson, CCIM, is an active commercial real estate broker. Reach him at 707-254-8000, or firstname.lastname@example.org. Sign up for his email newsletter at BurtPolson.com.