Unsafe Financial Transactions

Despite continuous reports of financial fraud in the media, history appears to keep repeating itself. The same scams exist, and the only real difference is an increase in the level of fraud, not a decrease due to increased awareness. Earlier this month I published an article called ‘deviation from the norm’ which encourages people to be more suspicious when they asked to take action which they would not normally do, or that is different from how most people do things. This article is a follow-up to look at some situations that are still endemic throughout society and which, in some cases, are having a life-changing negative impact on people’s lives.

  • Never use bank transfers to send money to someone you have not met in person, or with whom you have no prior or existing business or personal relationship. Payment for goods and services with Visa or Mastercard has the added security in that if goods or services are not delivered, your bank can process a chargeback to the card. Sites such as eBay have processes in place and can process refunds without needing to involve the bank. Bank transfers bypass this safety net completely, and refunds are not available if goods or services are not delivered.
  • Although cheques are in significant decline, it is still important to remember that cheques can take several days to clear, can be cancelled at any time, and can bounce if funds are not available in the originating account. Wait until funds have cleared before delivering goods or services, processing refunds, or refunding overpayments.
  • Do not make a payment of fees or taxes upfront to receive a payout. Upfront fees for lottery winnings are still a common theme, but also advance fees for loan applications which never materialise. In cases where advance fees include a guaranteed loan offer or fees refunded, the terms and conditions are often so bad that the applicant rejects the loan. For example, they were offered a loan with 2000% APR. Rejection of the loan does not include a refund of fees.
  • Never transfer money upfront to anyone in connection with a job application. If you are applying for a job, your future employer will pay you.
  • Never send money in response to emergencies reported by family members without verifying the facts and speaking to those in distress. E.g. lost wallets and an urgent need to transfer cash to a friend to survive in a foreign country, or being sick and needing to pay for urgent medical care, or arrested and need to pay fees to be released. Whatever form this takes, it exploits the love and care for a family member or friend, and pushes you into helping before you have a chance to realise there is no real emergency.