The most common telephone scams and how to avoid them
Telephone scams have been around since the telephone began its march to prominence over a hundred years ago. Although governments have worked hard to limit telemarketing and scams with legislation and "do not call" lists, telephone scams continue to annoy and defraud thousands of individuals every year. Here are some of the common telephone scams and how to spot and avoid them.
Currently, one of the most common telephone scams is one in which the person answering the phone is told that they've won a prize, such as a new car or a vacation, or a free gift that's waiting to be sent. After collecting personal information, the caller will then ask for payment for some sort of a fee, typically shipping and handling charges or a tax payment. Of course, once the payment information is given the caller will then politely thank the recipient and hang up, and nothing ever gets delivered. This is one of the easiest scams to spot. Victims reporting being scammed in this way have usually never heard of the company, or don't recall entering any contests. If it sounds too good to be true – it is. If you've actually won a prize you won't be on the hook for any additional charges.
Another common telephone scam is the charity fundraising scam. A caller will give a long spiel about being with a certain local charity, and how they're currently in the middle of their fundraising drive and would like a donation by credit card. Again, this scam initially sounds legitimate but can quickly be detected by asking a few simple questions. For instance, asking the caller the address of the charity's local office, what events they're running this year, and who the CEO of the organization is are usually easy ways to trip up a scammer looking to score a buck. Legitimate callers from charity organizations can almost always answer simple questions about their charity with no hesitation, so put the caller on the spot to see if they're a scammer or if it's simply a telemarketing call.
Automobile warranty scams are another hot scam circulating throughout North America. The caller will identify themselves as a salesperson for automobile warranties, and if they're proficient, they may know the make, model and year of the automobiles in the household. The call might also begin with an automated recording claiming that the car's warranty is about to expire and that you need to extend your coverage immediately. A live salesperson is then connected who will then try to pitch a new warranty at a "reduced rate" or on a "limited time offer". Dealing with this scam is simple – simply don't fall for it. Automobile warranties should be purchased at a dealership or insurance agency, and not over the phone.
A new and surprisingly successful telephone scam is the "computer virus" scam. A caller will phone up unsuspecting individuals and claim that their computer has a virus, and their personal information is being exposed over the internet. The caller will then either try to sell some form of anti-virus or other solution, or might try to direct the victim to a certain webpage which will then actually install a virus, which of course then leads to the identity theft the caller was supposedly calling to report. This scam is incredibly easy to spot using common sense – there's little chance that someone on the phone knows anything about your computer or your personal information. Just hang up.
Finally, some of the less common but incredibly harmful scams are those revolving around financial information, investment or insurance schemes. Since these telephone scammers actually work to get financial information from victims or to get victims to purchase expensive policies or stocks, they can cause significant financial stress to those that fall for them. A scam known as a "pump and dump" is one of the worst stock scams that targets individuals. Callers will phone to share that they know a very cheap "penny" stock is about to rise, and that they are calling to "let you in on the deal". After a sufficient number of victims invest in the stock, the scammers will sell their shares at a higher price than they bought them for, netting profits and leaving the victims who invested out in the cold. Once again, these scams are relatively easy to spot – no broker is going to be calling to convince you to buy anything if they don't know you. Just ignore the call.
It goes without saying that all consumers need to be vigilant to protect themselves from scams such as these and the many others that are being perpetrated by scammers today. By keeping a close eye on the monthly phone bill and watching for suspicious charges, you can ensure that nothing unknown pops up that you'll end up having to pay for. Don't trust anyone with financial information over the phone, unless you've specifically called them and you trust that it's the right company or individual. Use common sense, and you can avoid most common telephone scams.