How to spot and avoid scams

By definition, a scam is a scheme designed to trick you out of your money. It can take various forms and is not always easy to spot. Some scams present themselves as a chance to invest in an exciting new money-making investment scheme or an unexpected win on a prize or lottery.

Whoever is targeted must be very careful and cautious because the letters, faxes, or e-mails can be very convincing and look professional. You should constantly keep in mind that scammers make money when you reply to their scams, for instance when you call a number provided.

The general rule to avoid falling victim to a scam is that if what is offered to you sounds too good to be true then it usually is. Do not be taken in by the hype and false promises. Scammers usually ask about your personal or account information. Trustworthy firms do not do this.

Moreover, scams usually urge you to take a decision immediately and put pressure on you by saying things like, "If you don't act now, you'll miss out". Before taking any decision, think twice and get independent financial advice.

Very often, scammers hit you unexpectedly. You may get a phone call, e-mail or letter from someone you have never heard of and wonder how they got your contact details. Whatever the case is, never agree to offers or deals straight away but either tell the person who is in contact with you that you are not interested or that you need to seek advice before taking a decision.

Read carefully all the terms and conditions whenever you are offered something for free. Cheap or free offers usually have hidden costs. These scams often ask for a processing or administration fee to claim the prize. In certain instances, there is a need to call a premium phone line to claim the prize. Eventually, you will find out that the value of the call is bigger than that of the prize.

Be careful also not to fall victim to 'phishing'. Through an e-mail, the scammer directs you to a website which is a copy of a genuine site. Then you are tricked into revealing your personal information and confidential passwords. These e-mails can be convincing. When in doubt, ask yourself why your bank or credit card company would ask you to give or confirm confidential details? Do not be fooled but always call the organisation concerned to verify if they sent the e-mail.

There are also numerous scams involving foreign money offers. In these scams the potential victim receives an e-mail, fax, or letter which claims to come from someone with access to a huge sum of money. This is often a senior government official, or a relative of a deceased politician, or a solicitor or accountant.

They usually say they need help with transferring money and for various reasons have identified you as a potential solution. The victim is then asked to provide the details of his bank account, which is then emptied.

Be extra careful and cautious and do not trust anyone with your personal or bank account information. Keep in mind that no one will give you anything for free; there is always a catch somewhere. In such cases, prevention is undoubtedly much better than cure.

Ms Vella is senior information officer, Consumer and Competition Division.

customer@timesofmalta.com, odette.vella@gov.mt