Perhaps the more difficult part about making money, is actually keeping it. We have expenses, debts, and everyday necessities that need to be fulfilled before putting our money safely into our bank accounts. Sadly, we’re also losing money to sheer gullibility.
Anthony R. Pratkanis points out that “every year, Americans lose over $40 billion in telemarketing, investment, and charity fraud.” Why do we fall so easily to financial fraud? Why are we so gullible? Debt is a burden that most of America is trying to overcome. It is also a burden we would do anything to shake — this means we are willing to fall for financial fraud because we want to believe there is a quick way, an easy way, and a shortcut to breaking free of debt.
According to Comet, 80.9% of baby boomers, 79.9% of generation x, and 81.5% of millennials are in debt today. That’s a huge portion of our economy that is just trying to keep its head above water. Put in this perspective, it’s easy to see that you aren’t alone. Unfortunately, this rising percentage of debtors has awoken a different kind of corruption beyond simple debt — financial scammers are targeting those in need of debt relief.
So how do you spot the scammers? How do you shake the financial sharks?
Grow Confident, Gain Knowledge
We succumb to scammers because we want the easy, quick way out — that is our first financial mistake. We must learn to become confident and independent.
The first step is to improve your own financial decision-making ability. Though you’re currently in debt, that does not mean you can’t grow, learn, and adapt. You should be aggressively attempting to learn everything you can about finances — you must believe that you can dig and claw your way out of this financial predicament.
A key component to gaining confidence is to prepare correctly. As Dante put it, “The arrow seen before cometh less rudely.” So put the time in to prepare for your upcoming challenges. For example, if you have struggled with filing taxes, prepare your documents beforehand and stay organized so that, when the time comes, you will be able to get a bigger tax refund in less time and with less stress.
If you have made financial mistakes in the past (as we all have), it’s time to get over the guilt. What did you do wrong? How do you get past it? What decisions should you make in the future to avoid similar mistakes? It is absolutely vital that you ask yourself these questions before achieving financial freedom.
Though sometimes we must lean on the advice of financial experts, your confidence can only quicken the speed at which you approach financial stability. Whether you are currently employing a debt relief service or are thinking about it in the future, you should be strengthening your personal financial responsibility.
Scamming Scare Tactics
I have received several calls and messages over the past few weeks that start out with phrases like “this is your final notice before we terminate” and then end with something like “lower your credit card rates.” Though not exactly a scam, the company that keeps calling me
Scammers will often use extreme language to evoke feelings of urgency. Words like “terminate,” “final notice,” and “warning” are meant to alert you to a fake-serious situation.
First of all, I do not currently own a credit card, so it was pretty easy to spot the scare tactics. However, even though I did not yet know what the phone call was about, I could not help but feel my heart flutter just a bit. Fear is the most common friend of financial scammers.
Nobody wants to lose thousands of dollars, so scammers will usually promise to instantly end some looming threat of debt. Quick debt relief is a goal that hasn’t quite been achieved yet. Most debt relief companies can square issues away between 24-48 months. Even for financial experts, debt relief is a process. Don’t be fooled by those who promise to wipe away a debt in just a day.
The Most Common Scams
While many scammers use scare tactics, there are many others that will play on all of your emotions to get your money. Don’t fall prey to the most common scams that promise wealth, safety, or security in exchange for personal or financial information.
According to ConsumerFinance.gov, some scammers will pose as members of the “nonexistent ‘Consumer Protection Bureau.” Government officials at the CFPB continue, adamantly stating “This is not us. We are the Consumer Financial Protection Bureau, or CFPB. Some scammers may claim to be with the Federal Trade Commission’s (FTC) Bureau of Consumer Protection. Others may claim to work for the CFPB or FTC, but neither of these agencies calls consumers to alert them of winning a lottery or sweepstakes. ”
The CFPB also warns that scammers will often claim that they are from the IRS and that you owe debt. Such scammers threaten lawsuit or arrest if customers refuse to pay. It is important to note that debt collectors cannot use unfair or abusive collection tactics — such threats would be considered illegal collection tactics. To avoid tax identity theft, try staying ahead of your taxes, carefully inspect your credit reports, and be ready to freeze your credit if you suspect identity theft.
Read Up on Financial Services
Never accept a financial service without first looking at customer reviews. If you are considering working with financial experts to relieve your debt and lift your burdens, be sure that the company has the requisite accreditations (like the AFCC and the IAPDA for debt relief companies).
Customer reviews should act as a supplement to all of your research into each individual company. If you find that the vast majority of customer reviews oppose what the company or service claims, then you should move on. On the other hand, if you find a debt relief service whose customers support the company’s claims, you know when you’ve found a reliable and trustworthy company.
No matter your financial situation, you are always in danger of financial scams. Always be skeptical of those who threaten and ask for personal and financial information. Do not be intimidated by cheap scare tactics or promises of quick wealth. Your confidence and ability to spot a scammer will protect you on your personal path to financial wellness.