How to Spot a Scam: 7 Questions To Ask Before Buying
reprinted from Mint.com
Lyn Cacella found an unbelievably good deal on a Royal Caribbean cruise to Bermuda through a website shed never heard of called GlobalCruisesOnSale.com. The catch? She had to wire $1,359 to the business for her fare.
But when the tickets didnt arrive, she phoned the cruise line, which had no record of her reservation. When she asked a GlobalCruisesOnSale.com representative by email about the preponderance of bad reviews, she was referred to a site called BuySecureOnline.org, which certified the business as legitimate.
I think its a hoax, she told me.
Actually, Cacellas cruise is a textbook scam. Here are a few telltale signs something is wrong with a company.
Ever heard of the business?
If you dont know the company, it could be a scam. If no one you know has heard of it, theres an even better chance. And if you cant find any information about it online good, bad or otherwise run. I receive regular emails from readers asking me if Ive heard of a particular company thats offering an attractive deal. Good businesses leave a trail of happy customers. Bad businesses try to cover their tracks. A fraudulent enterprise wont even offer an address or phone number on its site.
Is the price unusually attractive?
Most scams look too good to be true. Thats because they are too good to be true. And you probably already know that on a subconscious level, but youre consciously overriding it because you want it to be true. Fact is, if something looks wrong to you, it probably is.
Do they want you to pay by cash or money order?
Virtually all legitimate businesses accept credit cards for major purchases. (Some exceptions apply. A hot dog vendor may be a cash-only business, but for reasons everyone understands.) Beware of businesses that sell big-ticket items like TVs, cruises or cars but doesnt accept cards. And if they want you to wire the money, turn around and dont look back. You cant dispute such a transaction if something goes wrong. Once an unscrupulous business has your money, its over.
Do they ask for personal information by email?
No legitimate business asks for your credit card information or passwords by email. If a business demands that information by email, its almost certainly a scam. Never, ever share personal data in an email.
Are they asking you to buy now?
Shady businesses apply high-pressure sales tactics, claiming theyre offering you the last available unit in a timeshare or that only one more car model is on the lot. While this may be true, the tactic suggests the company may be ethically challenged in other ways, and it may signal a problem with its products. They may also worry that youll shop around and compare their products to those of a competitor. Take your time, and dont rush into anything.
Are they offering something for free?
Remember, theres no such thing as free. But if a business says something is free, you shouldnt have to pay anything for it. Most of the scams I deal with start with a free offer but it turns out you have to buy something in order to get it. Thats a classic bait-and-switch game, and it may indicate a problem with the company. The product youre buying may not be what you expect.
Do they tell you not to worry about the contract?
The most accomplished scam artists assure you the contract is nothing to worry about or offer a Readers Digest version in either a brochure or verbally. Neither count for much. What does? The actual contract, which you should read carefully before you buy something.
How many of these applied to Cacellas cruise? Too many.
I contacted Royal Caribbean to find out if it had ever heard of the business. It hadnt. It referred the matter to its legal department, which sent the company a cease-and-desist letter. Before I could ask the online agency for a reaction, both GlobalCruisesOnSale.com and BuySecureOnline.org went offline.
We are out a whopping $1,300, Cacella told me, urging me to share her story with others so that they could be warned. Most, she says, let them know that a legitimate business accepts credit cards.
And just because a website looks good with authentic logos and terrific pictures and correct schedules does not mean that they are authorized or trustworthy, she adds.
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