How it works

You are told you have won a sweepstakes or foreign lottery. In order to collect your winnings, you are informed that you must first pay taxes or customs duties – typically via wire transfer. You send the money, but you never receive your winnings…because there was actually no sweepstakes or lottery to begin with.

What you should know

• Legitimate sweepstakes will never ask you to pay taxes or fees to receive your prize. If taxes are owed, you would simply report your winnings to the IRS when you file your annual tax returns.
• It is illegal to play a foreign lottery, so if you are informed that you won one, you know it’s a scam. Besides, how could you win a foreign lottery if you never bought a ticket?
• Sometimes the scammers will send a check for a few thousand dollars to cover the alleged taxes or fees. They’ll instruct you to deposit the check and then wire the money to them once the check has cleared. Don’t be fooled. The check is a fake. Despite popular belief, just because a check “clears” your bank, it does not mean the check is legitimate. It can take weeks to discover that a check is counterfeit. By that time, the scammers have disappeared with the cash, and you are liable to the bank for the money you wired.

Imposter scams are scams in which fraudsters pose as someone you trust in order to trick you into paying them money. The scammer may pretend to be someone you know personally or claim to be working for a law enforcement agency, well-known business, government agency, or charitable organization. These scams often involve intimidation or scare tactics designed to induce victims to hand over their money before they have had a chance to think things through. There are a variety of these scams. Some of the most common ones are listed on the following pages.
 

n 2024, the Federal Trade Commission (FTC) reported a total of $5.7 billion in losses from investment scams nationwide, with a median loss of over $9,000 per victim. These scams may start in much the same way as romance/confidence scams and may come from a seemingly random, accidental text message. The fraudster will then strike up a conversation and friendship that includes information about his or her success with an investment. The pitch may seem even more credible because your money is not going to this new friend, but to what appears to be a legitimate investment operation that may have a website or app. Scammers generally promise a high rate of return and no or very low risk, but the investment is questionable at best, and may not even exist at all.

Tips to Avoid Investment Scams:

• Don’t trust promises of unusually high returns or risk-free investments. Every investment contains some amount of risk.
• Don’t feel rushed. Pressure to act immediately is a red flag of a scam.
• Any investment opportunity requiring you to utilize a crypto kiosk is a scam.
• Be very wary of foreign or “off-shore” investments, which can be a sign of a scam.
• Don’t be persuaded by claims that “everyone” is in on the deal. Many scams target members of the same social circle or religious group to give victims a false sense of security.
• Don’t rely solely on the information the investment promoter gives you; a scammer can easily create phony materials. Always do your own research before investing your money – even if the person promoting the investment is someone you know.
• If you are considering buying stock, check out the company’s financial statements by using the Security Exchange Commission’s (SEC) EDGAR database (sec.gov/edgar).
• Verify whether the person contacting you is licensed to sell securities in Georgia by contacting the Georgia Secretary of State’s office at sos.ga.gov or 1-844-753-7825. You can also use the following resources to see if the person or company is the subject of any complaints or violations:
  • BrokerCheck (brokercheck.finra.org)
  • investor.gov
• FINRA’s “Scam Meter” tool (tools.finra.org/scam_meter) gives you a report of any red flags based on your answers to a few questions.
• To report an investment scam, contact the Georgia Secretary of State’s Securities Division at sos.ga.gov/securities-division-georgia-secretary-states-office or by calling 404-654-6021.

There are two common variations of medical alert and home security scams:

• Robocall offering free system – You answer the phone to a pre-recorded message offering a free medical alert system, a system upgrade or saying someone has purchased a medical alert system for you as a gift. The message may state that the call is from Medicare. You are prompted to press “1” to speak with a live person, who immediately asks you to provide your financial information or Medicare account number to “expedite shipping and handling.” You end up getting charged monthly for a system that you didn’t need or one that is never delivered. Remember… calls with pre-recorded sales messages are illegal unless you have given the company your written permission to call. If you receive an unauthorized robocall, just hang up.
• Door-to-door salesperson posing as your current provider – In this scenario, the scammers come to your door claiming to be with your existing medical alert or home security system. They may claim that the system is due for an upgrade or that the current provider has gone out of business and they are representatives from the new company that has taken over. They pressure you into signing contracts and providing your payment information. You discover you’ve been conned when you start getting billed for two systems: one from your original, legitimate provider and one from the “new” system the scammers tricked you into buying.
  
  To avoid this scam:
  • Call your existing provider using the phone number listed on your bill to verify that the employees and the offer are legitimate.
  • Ask the salesperson for a photo ID and business card.
  • Rather than making a decision on the spot, ask the salesperson to leave you with literature that you can review.

While some of the ads for work-from-home jobs are legitimate, many of them are scams. You should always research a potential employer carefully and look out for these red flags:

• Requests for payment.  The number one sign of a work-from-home scam is that you are asked to pay money up-front – whether for certification, training materials, background and credit checks or a job recruiter fee.
• High salary for simple tasks or minimal experience.  Remember, if it sounds too good to be true, it probably is.
• Requests that you deposit payments to your account and then wire money on behalf of the company. This scenario is often used as a means of laundering stolen money. By carrying out this request you could be committing theft and wire fraud.
• Vague job description.  Be suspicious of job listings that are vague or overly generic, never stating exactly who the company is, what they do and what the position entails.

Certain types of jobs are more commonly used by scammers.  These include:

• Envelope Stuffing or Rebate Processing – You pay a small fee for this business opportunity and then learn that there is no work; instead, they want you to get others to buy the same work opportunity as you. You only earn money when they sign up.
• At-home craft or assembly work – The company says it will pay you for creating or assembling crafts. But first you have to pay a significant amount of money for supplies and equipment. After you complete and ship your work, the company tells you that the quality is not up to its standards and refuses to pay you.
• Medical or claims processing – In exchange for an investment of hundreds of dollars, you’re told you’ll get everything you need to launch your own medical billing business, including the software to process claims and a list of potential clients. But the lists are bogus or out-of-date and the software may not even work. Few people who make the investment are able to find clients or generate any income — let alone get their investment back.

How it works 

You receive a text or email that appears to come from a well-known shipper, such as the U.S. Postal Service, FedEx, UPS, etc. The message says that your package was unable to be delivered to you and provides a link that will supposedly allow you to track your package or confirm your delivery preferences. If you click on the link, you may be told you need to pay money for taxes or a customs fee before your package can be delivered. You will then be prompted to enter payment information and/or your Social Security number. In reality, there is no package, and now you have paid money or provided sensitive information to a scammer or an identity thief. What’s more, the link you were directed to could install malware onto your electronic device.

What You Should Know

• Do not click on links in unsolicited text messages or emails.
• Never give personal or financial information to someone who contacts you out of the blue. You never know if someone really is who they say they are.
• If you think the message pertains to an item that you have ordered, contact the retailer to track the package. You can also go to the legitimate website of the delivery carrier and enter a tracking number that you have verified (don’t assume the one in the message you received is legitimate).
• A request for payment information or a Social Security number is a red flag of a scam.

Door-to-door salespeople frequently target older adults since they are often home during the day. While some door-to-door sales are legitimate, many are scams in which con artists use high-pressure sales tactics to coerce consumers into paying money for a product or service they do not need, or one that never materializes.

Tips to Avoid Door-to-Door Sales Scams

• It is wise not to allow a salesperson into your home unless you have a prescheduled appointment.
• Always ask to see the salesperson’s ID.
• High-pressure sales tactics often indicate a scam. If you are feeling pressured, you do not have to be polite. You can interrupt, tell the person firmly that you are not interested and shut the door.
• Ask the salesperson to leave you with some written materials to review rather than signing a contract or making a purchase on the spot.
• Never sign a contract without first reading it thoroughly and making sure you understand everything.
• Get all prices, warranties and cancellation policies in writing.
• Never pay in cash.
• Door-to-door sales purchases of $25 or more are subject to the FTC’s Cooling-Off Rule, which gives you the right to cancel your purchase within three business days and receive a full refund. If the seller fails to do any of the following, he/she is violating the law:
  • Tell you that you have the right to cancel the order within three business days for a full refund
  • Provide you with a written summary of your cancellation rights
  • Give you two copies of the cancellation form (one to keep and one to send if you decide to cancel your purchase)
  • Give you a copy of your contract or receipt
• An expansion of consumer protections under Georgia Law that went into effect on July 1, 2023, includes a 30 business day cancellation right for those sales that include payments above $10,000.00, involve a lease longer than 120 months and are eligible, or are alleged by the seller or seller’s representative to be eligible, for federal tax credits. This primarily impacts sales of solar panels.
• Report any door-to-door scams or violations to the Georgia Attorney General’s Consumer Protection Division by calling 404-651-8600 or by going to consumer.ga.gov.

Magazine scams may occur via the phone, door-to-door, on-line or through mail solicitations. Scammers trick consumers into paying many times more than the regular subscription price or paying money for magazines that are never received. Refunds may be difficult or impossible to obtain. Here are some common magazine scams:

• Mail solicitations designed to look like renewal invoices. You receive a postcard in the mail that looks like a renewal notice from your existing magazine publisher. It indicates that your magazine subscription is about to expire. Although the fine print may disclose that this is a solicitation, not a bill, many consumers do not notice or read the fine print. If you respond to the solicitation, you will end up paying a much higher than normal price for your subscription and you may find it difficult to cancel the subscription and get a refund.
• Door-to-door sales benefitting a school activity or charity. A high school or college-aged youth comes to your door selling magazine subscriptions that will supposedly help fund a school activity or charity. The magazines are overpriced, but you are willing to overlook that in order to support a good cause. It turns out that the whole thing is a ruse. You are now out the money you paid, have no magazines to show for it, and cannot get ahold of the company.
• You’ve won a prize. A scammer calls and tells you that you have won a valuable prize and that in order to collect it you must order a magazine service that costs just “pennies a day.” You agree to sign up for the service and provide the caller with your payment information. The scammer then charges you more than $1,000 for magazines and you never receive your prize.

Tips for Buying Magazines

• Pay online at the magazine’s website or contact the subscription department by phone using the number listed in the magazine itself or on the magazine’s website.
• Never pay in cash. It is safest to use credit cards because they offer protection against fraudulent charges.
• Ask to see the terms and conditions for the subscription before you purchase. Legitimate magazines will be happy to provide you with that information in writing.
• If someone comes to your door selling magazines to fund a school activity, contact the school directly to verify that it is actually running the promotion described.
• Don’t get rushed into making a decision. Take your time and make sure you understand what you are agreeing to.