The Ripoff Alert is a new series appearing once each week on Fridays. It alerts you to the latest scams and ripoffs trying to get between you and your money, and gives you information you need to stay safe.
You’ve Won a Million Dollars!
This is an old scam that’s still taking people today. You get a letter in the mail stating that you’ve won a million dollars, or 4 million, or whatever the amount is. It could also say “You are due payment of X amount.” You keep reading, excited about how you’ve won so much money out of the blue.
Then you get to the bottom, where it tells you how to “claim” your winnings. All you have to do is send a check for $1,000 for processing fees and once they’ve received your check you get your winnings.
In fact, it’s illegal for companies to require you to pay a fee or buy something in order to claim a prize. Don’t send that check. They’re after your bank account number and the money you send them for the “processing fee.” Just throw it in the garbage.
My Money Design wrote a post this week about people falling for pyramid schemes. He talks about overhearing a presentation sales pitch for a vacation club. This wasn’t about vacations though, it was about recruiting other people to join the program.
Pyramid schemes exist in a variety of industries. The procedure generally goes like this: You’re invited to a presentation at a conference center or hotel meeting room, you learn about a “great opportunity to make money effortlessly”, you’re told that the more people you recruit the higher your earnings, then you’re given the hard-sell from someone who’s been doing it a while.
If you’re looking into an opportunity like this, ask yourself this simple question: Is the emphasis on selling an actual product or service, or is it on recruiting other people? If the emphasis is on recruitment, it’s a pyramid scheme, and you should run far, far away. Beware of anyone who offers you the opportunity to quit your day job and effortlessly make thousands of dollars a month.