As long as you have a bank account and an identity, someone will do their best to steal it. There is a myth that scammers only target the elderly because they’re technologically illiterate and so desperate for attention and that they are blind to being cheated. It’s a myth because it’s ageist and anyone can fall victim to a scam and be defrauded of their money, their credit, and their good name.
It’s the price we pay for being human, and for having access to modern technology. Being scammed does not make you stupid or naïve, it just means that are people eager enough to screw you for their or their client’s gain and they will use immoral and illicit ways to get it via the same things – email addresses, IDs, bank cards, websites etc., – we take for granted.
This article is going to be a little different than my other legal pieces. Instead of walking you through the law and the penalties for committing these scams, I’m going to focus on you – the potential victims. I am going to walk you through a few different kinds of scams and what to do if someone is trying to rope you into one. In cases where you may have already fallen victim to a scam, I will also provide some information on the action you can take.
We all know frauds and scams are illegal in Canada, but what many people don’t know is how they work and what you can do about them.
I want to help. So let’s talk scams.
Ponzi schemes are perhaps one of the oldest there is. Named after the con artist Charles Ponzi who operated the scam in the 30s, it’s a scam that presents itself as a wonderful investment opportunity. All you have to do is invest a ton of money and you’re guaranteed more money in interest.
The catch is that the business you are investing in doesn’t actually make any money. The interest cheques you are getting are actually the result of the scammer recruiting more people to invest. The scammer simply passes on some of the new investors’ money as the interest you allegedly earned on your investment.
It counts on the recruitment of more and more people. Once the scammer cannot recruit anymore, they’ll take the money and run, if they don’t get caught first.
A good rule to follow is that if an investment opportunity seems too good to be true, it probably is. If you’ve fallen victim to one, gather or print up all the information you have and contact the police.
Another common scam is the pyramid scheme. With a pyramid scheme, you’re offered a “great” business opportunity to “be your own boss”. With jobs in Canada paying poorly and with no benefits, more and more people are falling prey to these scams hoping to find a better lot in life.
Like Ponzi schemes, pyramid schemes rely on recruitment in order to survive, but unlike the former, the scheme is actually an illegal version of multi-level marketing. This means that they claim to exist for the purpose of selling products via independent distributors.
Legit multi-level marketing companies will disclose the different levels of earnings by people who join and the average earnings of a typical participant. With pyramid schemes, the products themselves are not what makes money. They rely on the sellers to buy a ton of the product first which they can sell afterward. The money comes from one distributor recruiting more distributors.
The ones the first distributor got to join will then buy the products in huge amounts hoping to sell them. The first distributor will get a cut of the money from the sale of all these products to the new distributors. This second batch of distributors will then have to recruit more distributors to buy a ton of the stuff so they can earn money off those sales, with some of it going to the first person, and the cycle continues.
If you are wondering if someone is trying to court you into a pyramid scheme and you’re thinking of signing up, look online before giving an answer. If the company is facing numerous accusations of being such a scheme, it’s best to stay away. Companies facing such accusations include Nu Skin and Herbalife, whose recruitment has decimated communities in the US.
If you’ve fallen prey to one, get out while you still can and report it to the police and the federal Competition Bureau which ensures that Canadian businesses operate legally and fairly.
Now let’s talk about a couple of computer scams.
When it comes to computer scams, there are a few prevention methods you can take. First, change your passwords often and make them as complicated as you can; that means using numbers, capital letters etc. The second thing you can do is back up all your files using a viable website, USB key, or portable hard drive, as viruses and malware are an inevitable part of having technology and often our data does not survive on infected machines.
Some of the most sinister scams are emails or text messages from companies that seem to be the legit ones you deal with such as your wireless or cable provider, your bank or a company like PayPal.They’ll claim that your account has been hacked or there has been some suspicious activity and that all you have to do is click on a link and log in to fix it.
With these schemes, they are not necessarily after your money but your personal information. It is therefore best to not click on the link provided. Take a good look at the email address or phone number the message is coming from and compare it to other legit communications you have gotten from the company. If you do mess up and click, check out the URL of the web page it sends you to, as the site may look the same, but the URL won’t be.It is very common for these scammers to use numbers and email addresses that are extremely similar to the real thing, so be diligent and contact the company directly just to be sure.
Another sinister computer scam is ransomware. This is a kind of malware that can infect your computer and lock it or encrypt your files unless you pay the scammer a ransom. A lot of these will claim to be from a legit law enforcement agency that has locked your machine saying you’ve been caught doing something illegal and have to pay a “fine”. That said, it’s the kind of malware that’s hard to prevent but there are a few things you can do if infected.
Though most scammers will unlock your computer once you pay, there’s no guarantee you’ll get your files back, so it is best to avoid paying the ransom. If however there is highly sensitive information on your device and you’d rather pay the money to get it back, pay it.
If infected, disconnect the computer from any other devices it can spread to. Take a picture of the ransom note using your phone or take a screenshot (if you can) in case you want to file a police report later on. Then you can take it to a computer repair shop – there are many – who will do their best to get rid of the malware and recover your data.
You can also try and or use a legit anti-virus or malware program to remove it and then do your best to recover any files.
Anyone and everyone can fall victim to a scam, but with a little knowledge, we can scammers less successful.
* Featured image by Jean-Etienne Minh-Duy Poirrier via Flickr Creative Commons