Fraud can be from both sellers and buyers. It's sometimes hard
to tell the difference between reputable person or company and a scam
artist. You can protect yourself by learning
how to recognize the danger signs of fraud.
Be especially cautious when dealing with sellers in other countries.
If you have a problem, the physical distance, difference in legal systems,
and other factors could make resolving it very difficult.
Pay by credit card. Under federal law, you can dispute the charges
if you paid the seller with a credit card and the goods were never delivered
or if they were misrepresented. If you are paying through an intermediary
service, ask what happens in the case of disputes.
Consider using an escrow service, especially if the transaction is
worth more than $500. For a small fee, an escrow service
holds the buyers payment and forwards it to the seller upon the
buyers receipt and approval of the item within an agreed upon
inspection period. If there is a dispute about the item, the escrow
service may act as a referee. Ask if the service is licensed and bonded,
and how you can confirm that with the appropriate agency.
Common Fraud Techniques:
A seller (often foreign) has a laptop, motorcycle, or other expensive goods for an amazingly cheap
price. They take your money and run, leaving you nothing but a lighter
wallet for your troubles. Solution: Escrow
A distant buyer offers a high-value cashier's check
in exchange for your item, as a deposit for an apartment, or just about
anything else. The value of cashier's check often exceeds your
item - buyer asks you to wire the balance via money transfer service
(usually Western Union). Banks will often cash these fake checks AND
THEN HOLD YOU RESPONSIBLE WHEN THE CHECK FAILS TO CLEAR! This scam
often involves a 3rd party (shipping agent, business associate owing
buyer money, etc) More...
A buyer wants to back out of the deal after sending a check/money order/Western
Union and asks you to send them a personal check refund. Similar to
this is a buyer from Africa or some other far away place will overpay
you. When you notify them, they will ask you to send them the overage
by wire transfer or Western Union. Usually the check they sent you was
forged or otherwise bogus. More...
A foreign (usually Nigerian) national has millions of dollars (from
their dead father/husband/brother/friend who was a king/patriot/dictattor/leader, or
skimmed from some account) and wants you to help them get the money
out of the country. They promise to pay you a share for your troubles. Another alternative is that someone
(possibly your long lost relative) died in a horrible car/train/airplane wreck and they can't find the next of kin.
Legitimate Business Opportunities do exist, but there are also a bunch of scams.
But be careful when the claims sound too good to be true: Make
Millions as An Internet Consultant; We'll
Build Your Downline For You; Home
Workers Needed; Make
Money Stuffing Envelopes; Assemble
Crafts at Home; and More...
Some Fraud related sites for more information:
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