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8 Tips for Avoiding Financial Scams
Financial Scams

Youíve worked hard over the years to get where you are today. Donít let unscrupulous fraudsters cheat you out of your hard-earned money. The Texas Society of Certified Public Accountants (TSCPA) offers the following eight tips for avoiding financial scams:

#1 Only donate to recognized charities.
If someone calls or e-mails you asking for a charitable donation, check out the organization before you give. You can sometimes spot bogus charities because they often use high-pressure tactics or will not provide information about the charity. A good rule of thumb is to determine at the beginning of each year how much money you want to give and to which organizations you want to give it. Look up recognized charities online at irs.gov (under Charities & Non-Profits) and GuideStar.org.

#2 Think twice before buying a product from a television infomercial.
Sure you might get three items for a limited time-only low price of $19.95, but buying products off a television infomercial can really cost you. If you want to return a product, questionable TV sales can sometimes put up lots of obstacles between you and your refunded money.

#3 Be leery of e-mail solicitations.
E-mail can be wonderful for swapping pictures of the grandkids, but it can be hazardous if your personal financial information is compromised. Banks donít e-mail you about your account status. They are scams set up to resemble legitimate companies like Chase, eBay and PayPal. If you get these and other hoax e-mails like the Nigerian scam, delete them from your inbox.

The Federal Bureau of Investigationís Website provides information on electronic scams. Sign up for e-mail alerts to learn about the latest scams and warnings. Also, note that the IRS NEVER e-mails taxpayers about refunds or missing information. So immediately delete any e-mail that appears to be from the IRS.

#4 Donít make loans or give expensive gifts to caregivers.
It is generally a violation of company policy for a caregiver to accept a loan from a client. If your caregiver approaches you for money, call the caregiverís employer or talk to your family.

#5 Watch out for home repair scams.
Itís nice to have friends stop by for a visit, but itís not so nice to open the door to a home repair scam. Beware of ďcontractorsĒ who knock on your door and say your roof or driveway are in need of repair. Ask for a business card and thoroughly investigate the company and/or get a second opinion before agreeing to any repair work. The Texas Attorney Generalís Office has helpful consumer protection information on their Website. You can also check out the contractor with the Better Business Bureau.

#6 Exercise caution when discussing your finances.
Itís not pleasant to think about, but sometimes even family members can get greedy. If you feel uncomfortable about a loved oneís intentions regarding your finances, talk to another family member or the police about the situation. Also, be cautious about giving confidential information on your cell phone in a public place where others can overhear the conversation. Identity theft is one of the fastest growing crimes in America.

#7 Check with your CPA before buying annuities.
Make sure you have all the facts before you purchase an annuity. Financial salespeople will often buy you dinner while you listen to their sales pitch, but they may not tell you about the tax implications of an annuity purchase or the high commissions that are buried in the annuity price. Further, many annuity contracts are difficult to liquidate and have high early withdrawal penalties if one changes their mind about the investment. Always check with your CPA or someone who isnít doing the selling before you buy an annuity.

#8 Be wary of unexpected checks
Itís always wonderful to imagine receiving unexpected money. Recent scams have included mailing a victim a fake check that looks real. While there are various forms to this scam, they all request the victim to wire or otherwise send back a portion of the fake check amount to them or someone else. Be wary of this method of theft.