Moneywise24 Personal Finance

This morning, as I was drinking my coffee and waking up slowly, I watched a report about a new type of scam which involves unauthorized bank transfers. Although the report mainly applies to the German banking system, this could also apply to other countries where law permits it.

Basically, fraudsters will generate a random bank account number, and they will try to transfer 1 cent to that account number. If the transfer bounces, it means that the account number is non-existent. However, if the transfer is accepted, fraudsters will know that the bank account exists. Next, fraudsters will fill in a bank transfer form manually (internet would not work, since fraudsters would need additional login details), pretending to be the bank account owner of the person, they had previously transfered 1 cent to.

In Germany, the trick would work, since banks are not obliged to check the validity of a transaction. Therefore, it is possible for transactions with invalid signatures or names to go through.

There is not much a bank account holder can do in order to prevent this type of scam. However, each and every account holder should check his/her bank account credits and debits regularly. If an unauthorized charge has taken place, the account holder can dispute the transfer, and chargeback the amount. At least in Germany, it is the bank’s responsibility to prove that the transfer was valid.

There are still so many flaws in the law, or a lack of specific control mechanisms, which make such fraudulent actions possible. If the bank would compare the name, account number, and signature of the account holder, this would significantly minimize the chance of such fraudulent cases.

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When I got home the day before yesterday, I had a very interesting message waiting for me on my answering machine. The text was clearly spoken by a computer, and although I already deleted the message, this is roughly what it said:

Hello, this is “Mr X”. Your number has just been selected from our database, and you are a winner. This is not a joke, you have just won a BMW 3-series, or the equivalent of 30,000 Euros in cash. Again, this is not a joke. You can claim your prize, a BMW 3-series or the equivalent of 30,000 Euros, by calling us within the next 48 hours. Please take a pen and a piece of paper, the number is 0900-739555…

I have to admit, I was a bit confused, perhaps a bit joyful. But I decided to research the internet first, before calling on. As I entered the number in Google, it appeared that many people had already written about the message message being a scam, and that calling the 0900 number would cost approximately 2 Euros per minute. The clue: the call center would stall callers as long as they could, but a prize (be it the car or the cash) would never get delivered to the individual.

I currently live in Germany, and having researched the topic a bit further came the next clue: the so-called company which had called me is located in Switzerland. Due to the border issue, it is extremely difficult to sue the company in order to obtain a prize. In fact, many had tried, where some succeeded but many failed.

Such automated calls are clearly scams, since nobody has anything to give away for free, especially if you cannot recall registering anywhere. Additionally, serious companies would contact you in person, and you would most probably have much more time than only 48 hours to respond. Fraudulent companies frequently make use of dialers, meaning that random phone numbers will be called, and as soon as a number is picked up (either by a person or answering machine), the number is saved in the database. Such databases are then frequently sold to third parties.

The sad thing is, that still many people respond to such calls. These are also usually people, who really could use the money and who are living on a tight budget. However, if you watch out for a couple of things, you can fairly easily identify a scam:

• If you are being called and the number of the caller is hidden, it is probably a scam (or another company or individual which clearly does not want you to call them back on that number).
• There is nothing for free without an initial investment. If you play the lottery, you will have to make a purchase first before you can win anything. However, if you won something without any effort from your side, it is probably a scam or a marketing campaign.
• Are you being told to respond within a very short time limit, such as 24 or 48 hours, then it might be a scam. Fraudsters do not want to give you enough time to think it over, or to conduct extensive research; you are being put under pressure.
• Are you being asked to call a very expensive number? Then it is quite obvious how this company is probably generating its earnings, namely via people calling them.
• If you are being told to call to a specific number, try to google that number. Posts and comments on scams are being spread on the internet extremely fast. If you find material on that number, read what people write about it.

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At present, countless individuals are feeling the stress of handling their overwhelming debt burden. Consequently, they are resorting to debt consolidation companies to help them deal with their debts and regain financial control. Unluckily, many of them ask for exorbitant fees and give assurances that they are not able to fulfill. Prior to making a commitment to a debt consolidation company, you have to do some homework and think about your options. It can ultimately help you save a considerable amount of money.

 Warning Signals Regarding Debt Consolidation Services

 There are particular red flags by which you can realize that a debt consolidation company you’re thinking about is too good to be true.

 Assurance that you would get a debt consolidation loan: Majority of genuine debt consolidation companies would not assure that you would receive a debt consolidation loan before checking your credit history and completing an application. You should be leery about these types of assurances.

 Asking for personal details over the telephone: Look out for companies that request for personal details like social security numbers, credit card numbers or bank account numbers – particularly if you have not been accepted for a debt consolidation program or loan.

 How the ad has been put forward: On many occasions, scam companies claiming to provide consolidation services are noticed in classifieds instead of as common display advertisements. In addition, be cautious about inexpensively generated advertisements on local ratio and cable stations. On certain occasions, you need to call costly numbers to obtain a consultation.

 Documents supplied through a special courier or an overnight service: On many occasions, con artists use these forms of deliveries instead of the postal service. This is due to the reason it is a federal crime to perform fraud with the mailing system of the United States. If an agency delivers the documents in this fashion – not utilizing the postal services, then it is a warning signal.

 Company is requesting for an advance payment prior to issuing the loan: This is a significant warning signal. Though various lenders ask for a nominal application fee (normally between $35 and $50) to compensate for administrative costs and the expenses of a credit check, advance payment can never be a part of their programs. If you are told to make a huge upfront payment, you must be wary and stay away from such a company.

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