I hate being pessimistic, but it can be hard NOT to be pessimistic sometimes, especially when it comes to people and crime. Millions of individuals are scammed each year in the United States, and they don't have to be if they are just a little vigilant and know what to look for.
Here are some things you need to pay attention to in your business dealings so that you can avoid being scammed.
1. Upfront Fees
Upfront fees for services should always be a huge red flag for business dealings you suspect could be scams. For almost every service, payment is due on completion, not upfront. That isn't to say that you won't have to pay, but payments for bigger or longer projects should be based on milestones to completion.
A common scam that involves upfront fees is debt reduction. Unscrupulous companies will make you pay before they even do anything to help you eliminate your debt. This is one of the most common student loan scams to avoid.
2. Over the Top Claims of Success
Another big warning sign of a scam is huge claims of success. This is a big warning sign, especially when investing. If you are working with someone and they promise guaranteed returns over a period of time, a warning buzzer should be going off in your mind. That was the promise behind the Ponzi-Scheme that Bernie Madoff was running and it is a common feature of many investing scams.
This doesn't just apply to investing, so make sure that you are being vigilant to over the top guarantees and claims.
3. Playing to your Eagerness
Another popular scam artist trick it to play to your eagerness. This is a trick that works when you want something down right now, and don't want to do further research. Usually the sales rep woos you with their promises, lures you in to write a check, and then disappears.
The bottom line is that you need to do your due diligence and make sure you know all your options before paying for anything.
4. Initial Consultation Fees
Initial consultation fees are very similar to upfront fees, but with the premise of your consultation. This isn't always a scam, but you should be wary of paying for an initial consultation. The point of such a visit is for both parties to decide if there is a right fit, and neither party should be paying for that.
5. Only Gives Vague Answers
Finally, make sure that you are asking a lot of questions!!! If you are asking questions, and you are only getting general or vague answers, raise the red flag. People trying to earn your business should be able to answer any question you have, or at least say “hey, I will research it and get back to you”. Don't accept generalities or vague answers. Get the trust. Remember, they are trying to earn your business.
Readers, what other tips do you have to avoid be scammed?