Some scams start with the promise of a prize like "You've won! Claim your prize." Others prey on individuals with poor credit and offer loans or cash advances. Another variant lures investors to partake in a lucrative business or trading opportunity. But the tell-tale sign of this scam is always the request for upfront payment — whether in the form of a finder’s fee, processing and deposit fee.
Online Security
Advance Fee Scams
If something sounds too good to be true, it usually is. Keeping that age-old adage in mind is the best way to spot and thwart advance fee scams.
Tips and Best Practices
Advance fee scams are getting more sophisticated and trickier to distinguish. Here are some tips and best practices to help avoid these types of scams.
DO
Do your research. Verify the credentials and reputation of the person or company that’s contacted you through trusted sources, like the Better Business Bureau, FINRA or SEC.
DON’T
Don’t pay for a promise. Dismiss someone asking you to pay in advance for a job, prize, loan or other kinds of financial assistance.
DO
Do your due diligence before signing any sort of agreement. Ensure you understand the terms you’re agreeing to and enlist the help of a competent attorney.
DON’T
Don’t pay an advance fee using a gift card, money transfer app, cryptocurrency or by sending cash in the mail. Contact your Financial Advisor for guidance about the best way to proceed.
DO
Do be skeptical if the person or business you’re dealing with is difficult to locate. For example, they don’t have a street address or direct phone line and instead relies on P.O. boxes or mail drops.
DON'T
Don’t give out your Social Security Number, hand over remote access to your computer or share your username and passwords.
DO
Do a quick search on the person or entity that reached out with the words “scam” or “complaint” and see if anything comes up.
DON'T
Don’t believe someone who says paying will increase your chances of winning a prize — that’s not how the lottery or legitimate contests work.
Security Center
At Morgan Stanley, safeguarding your assets and personal information is among our highest priorities. Learn about our security measures and use our resources and ideas to help protect yourself online.
Footnotes:
1 Federal Trade Commission, Consumer Advice, What To Do if You Were Scammed, https://consumer.ftc.gov/articles/what-do-if-you-were-scammed
Sources:
https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/advance-fee-schemes
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/investor-23
https://www.consumer.ftc.gov/articles/what-know-about-advance-fee-loans
https://www.consumer.ftc.gov/articles/what-do-if-you-were-scammed#Paid
https://www.consumer.ftc.gov/articles/fake-prize-sweepstakes-and-lottery-scams
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