Ireland’s Guide To Money And Living

Step up to Scammers – Part II

Millions of people across the world will fall victim to scams each year, in a variety of scenarios from advanced fee fraud to card skimming. While it’s not always easy to tell if something is a scam, the best way to prevent yourself from becoming embroiled in a sticky situation is to know how to avoid them in the first place.

Pyramid schemes – there are many different types of pyramid schemes, however most if not all share the same basic tenets: while there may be products to be sold, participants in the scheme can only make money by attracting new members. When a person becomes involved in the scheme, they generally have to buy in. Their money goes to the level above. These recruits are then encouraged to recruit more people, generating another level in the pyramid. Eventually, however, the pyramid becomes unstable as there are never enough people to keep the number of levels rising, and the vast majority of people lose their investments. Either promoting or being involved in a pyramid scheme is illegal under Irish law face fines of up to €150,000 and five years in jail.

How to avoid – Be mindful of investment opportunities or jobs that require an initial investment and a need to attract more members in order to recoup this money. If you’re unsure about a particular organisation or company, always do a quick Google search. This simple step could be the difference between avoiding a scheme and losing often significant amounts of money.

Card Fraud – Theft of your credit/debit card or bank details could happen via ATM usage, shopping online or careless behaviour while shopping

How to avoid – comb through your bank statements regularly to pinpoint any possibly fraudulent transactions. When you’re at an ATM, always shield your pin and check for any attached cameras or skimming equipment. If there’s anything at all suspicious then walk away and contact bank management about your concerns. When shopping, always be present for transactions where your card is being processed – this could prevent card cloning. When buying online, make sure you’re purchasing through a reputable retailer. Be security conscious, don’t give out your payment details easily, and install reputable anti virus and spyware/malware software

Free trials – These scams see consumers sign up to a product free trial, generally in skin care or weight loss. However, they quickly discover that they have been duped into signing up to an expensive subscription service due to clauses hidden in the fine print.

How to avoid – people joke about always skipping through the terms and conditions, but always make sure to read the small print. And, as with many other scams, Googling the company could unearth other people who have fallen foul of the service and can point you in the other direction – consumer watchdogs or forums may feature negative reviews you can use to your advantage.

Money mule – many people are desperate for a job these days, and could unwittingly sign up to a role as a money mule, essentially a cog in the money laundering business. People who accept such roles are generally asked to receive money into their bank account and then forward it on to another destination, becoming involved in criminal activities in the process.

How to avoid – if it seems too easy then it probably is. Be wary of jobs that only require you to have a bank account, and ask you to become involved in moving money. Research company and contact names online – if other people have been burned in the past then you should find some useful information and advice.

Possibly the best rule of judgement in many of these cases is this – if it sounds too good to be true, then it probably is.

When not writing about all things personal finance, You & Your Money's editor Conor Forrest enjoys reading, football and getting lost in an ocean of Wikipedia articles.