Is This a Scam? 5 Questions You Have to Ask

Financial IQ

It sounded like a bargain to Carolyn Soucy: for just $1, she could get a copy of her credit report. No strings attached.

Except that there was a string or two. She was actually signing up for a $14.95 membership in a program that monitored her credit unless she canceled within seven days – something disclosed (though not clearly) online.

Is it a scam – or not?

Soucy feels duped. (In a sense, she was. She could have simply gotten her free credit report online..

Her story is part of an ongoing series on my blog “Is this a scam?” where readers vote on whether an offer was fraudulent or not. A majority of voters (92 percent) said the offer, as presented to Soucy, was a scam.

But not all votes are that close. Truth is, not everyone can agree on what a scam is – and isn’t. I spend a lot of time dissecting these offers in my new book, “Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals,” and in it, I reveal some surefire ways to know. I also have some outrageous examples of scams that you’ll roll your eyes at. I sure did when I was writing the book!

Here are a few questions you can ask if you think you might be getting scammed:

1. Is this a legitimate company?

Most scammy companies aren’t recognized brand names. If you feel as if you need to ask a friend or your favorite consumer advocate whether the business is legitimate or not, you’ve probably already answered your question. I’ll spell it out for you: it probably isn’t. I have nothing against new businesses; just new businesses with offers that seem too good to be true, which these are.

2. Is the offer believable?

You know that saying, “If it looks too good to be true, it probably is?” That’s usually true. (I have a few exceptions that I reveal in Scammed, but suffice it to say that they are few and far between.) Dealing with a company you’ve never heard of and entertaining an offer that seems too good to be true together is almost certainly a sign of a scam ahead.

3. Are others warning you about it?

If you see reviews online that suggest the offer you’re weighing isn’t legit, you should take them seriously. For example, this scheme fits the classic description of the check cashing scam, which I wrote about a few weeks ago. And the thing is, this victim could have avoided wiring money to a scam artist, had he paid attention to the warnings.

4. Are they letting you see the product before you buy it?

Here’s a sad case of someone who got snookered into buying an expensive travel club membership. But he had fair warning: the “club” didn’t let him see its travel “deals” until he’d been a member for five days – two days after the state-required refund period had run out. Very clever. Is it a scam? Well, what do you think?

5. Do they require you wire money?

Any business that requires you wire money is almost certainly fraudulent. I can’t write this enough: avoid it at all costs. Many of the cases I mediate end at a Western Union office, with someone buying a product from an unknown company at a “bargain” price. The money can never be retrieved. It is the end of a remarkable journey of highs and lows, of inflated expectations followed by dashed hopes. Losing your money at the end of a wire is the final insult. Worse, most victims don’t realize they’ve been scammed until much, much later.

If you answered “yes” to any of these questions, you’re probably being scammed. If you answered “yes” to more than one, you’re almost certainly being scammed.

In fact, if you ever have to ask “Is this a scam?” chances are, the answer is “yes.”

Christopher Elliott is a consumer advocate who blogs about getting better customer service at On Your Side. Connect with him on Twitter and Facebook or send him your questions at by email.





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