Big Scams and Schemes to be Wary of

This can be a big one. Recently, a really big one ran by Madoff collapsed and even savvy investors were taken in and billions of dollars were lost. This one is where initial investors are encouraged to invest and are paid dividends from money garnered from subsequent investors. Eventually it collapses when no new investors can be found to fund earlier investors.

This can also be big one, except that early investors are usually culpable. It is similar to a Ponzi Scheme in that early investors are paid by subsequent investors and it collapses when investors can no longer be found. However, the goal is to have investors bring new investors, creating a pyramid structure because you only make money by bringing in investors.

This scam has some variations, but often involves some link to someone who is supposedly in Nigeria. It usually involves a letter or email out-of-the-blue asking the target victim to help out. It appeals to both a person's kindness and greed. The scammer supposedly has inherited or has money that belongs to them but there are obstacles to getting that money which can be resolved by having some money for bribes or legal fees which the target victim will help out with. In exchange, the victim will then get a % of the money. Of course, if the victim sends money, other money will be needed for other problems until the victim can't provide any more money. The victim will never see any of the money again.

Potential Victims get emails saying that they have won a lottery in a foreign country. However, to claim the winnings, they will have to pay some kind legal fee and other fees in order to qualify and "prove" who they are. Of course, once they have done so, they never see any money.

Someone calls a potential victim informing them that their grandchild or other relative has been injured or has been jailed. The caller makes it seem like an urgent matter, but let's the potential victim know that they can resolve things with money, which of course can only be paid by a credit card payment. The potential victim is flustered and so gives the information to help out their relative.