Financial Tip of the Week from the Iowa Bankers Association:
From ghosts and goblins to skeletons and jack-o-lanterns, we all have scary things on our minds as Halloween approaches. And although we can all agree that a walking, talking skeleton isn't real, this edition of Tuesday Tips is devoted to steps you can take to make the very real threat of work-from-home scams less scary.
The Federal Bureau of Investigation (FBI) recently issued a fraud advisory to warn consumers of the dangers of work-from-home scams. These types of work-from-home opportunities are often advertised in newspaper classifieds, online employment websites or in unsolicited e-mails.
While the opportunities may sound appealing – promising hundreds or thousands of dollars a week for minimal effort – work-from-home scams often cause consumers to lose money. Even worse, consumers could unknowingly be involved in assisting cyber criminals in moving stolen funds. The FBI warns that the consumer's own identity or account information could also be compromised.
According to the FBI, here are a few of the most common work-at-home scams:
· Advance-fee: Starting a home-based business is easy! Just invest a few hundred dollars in inventory, set-up costs and training materials, they say. Of course, if and when the materials do come, they are totally worthless… and you're stuck with the bill.
· Counterfeit check-facilitated "mystery shopper:" You're sent a hefty check and asked to deposit it into your bank account, then withdraw funds to shop and check out the service of local stores and wire transfer companies. You keep a small amount of the money for your "work," but then, as instructed, mail or wire the rest to your "employer." Sound good? One problem: The initial check was phony, and by the time your bank notifies you, your money is long gone and you're on the hook for the counterfeit check.
· Pyramid schemes: You're hired as a "distributor" and shell out big bucks for promotional materials and product inventories with little value (like get-rich quick pamphlets). You're promised money for recruiting more distributors, so you talk friends and family into participating. The scheme grows exponentially but then falls apart—the only ones who make a profit are the criminals who started it.
· Unknowing involvement in criminal activity: Criminals—often located overseas—sometimes use unwitting victims to advance their operations, steal and launder money, and maintain anonymity. For example, they may "hire" you as a U.S.-based agent to receive and re-ship checks, merchandise and solicitations to other potential victims… without you realizing it's all a ruse that leaves no trail back to the crooks.
The FBI offers the following tips to avoid work-from-home scams:
· Be wary of work-from-home opportunities, and research the company before signing on for work. Contact the Better Business Bureau to determine the legitimacy of the company. Do your own research into legitimate work-from-home opportunities.
· Be cautious about any opportunities offering the chance to work from home with very little work or prior experience. Remember, if it looks too good to be true, it usually is.
· Never pay for the privilege of working for any employer. Be suspicious of opportunities that require you to pay for things up front, such as supplies and other materials.
· Don't provide personal information when first interacting with your prospective employer, and never give your bank account details.
· Ask lots of questions of potential employers—legitimate companies will have answers for you.
If you think you've been the victim of a work-from-home scam, contact your financial institution immediately. The FBI also recommends reporting any suspicious work-from-home offers or activities to the Internet Crime Complaint Center at http://www.ic3.gov/default.aspx.
These tips are provided by the Iowa Bankers Association (IBA), representing banks and thrifts in the state. For more information, go to www.iowabankers.com.