Protect Yourself From 10 Menacing Financial Scams

How to recognize and combat these effective measures of fraud.

Students and families should be aware of scams when searching online for college scholarships.
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Two precautionary steps: Verify the financial product is registered with the state or federal regulator (most investment products must be registered), and go to FINRA.org or Sec.gov to check the investment professional's background.

5. Power-saving claims. Many consumers have reported they purchased defective energy-saving devices, as well as ones that did not meet electrical safety standards. If you're looking to make your home energy-efficient, the Energy & Environmental Building Alliance says it's best to start by consulting an energy professional who can inspect your home, identify areas for improvement, and suggest which devices to purchase.

6. Door-to-door sales. Prepare yourself before answering that knock at the door. Many door-to-door salespeople use high-pressure tactics to convince people to purchase pricey, subpar products or services—many of which they don't need.

You often see this with home contractors, who show up at your doorstep with pitches like, "I just finished work on another home in your neighborhood and I have leftover materials I can use on your home to give you a great deal." In those instances, Rick Lopes, a spokesperson for the California Contractors State License Board, says you shouldn't rush to get a job done on-the-spot just because they offer you a great deal for that day only.

[Read: How to Find the Right Contractor for the Job.]

7. Virus-fixing scams. According to the Microsoft Scam Defense Survey, antivirus alerts that imitate real programs are the second-most common type of scam adults encounter online. "Cyber criminals create legitimate-looking pop-up windows that promote software offerings that claim to protect one's computer from malicious software or to fix the 'infected' computer, when in reality it's highly likely to do the exact opposite," says Jacqueline Beauchere, Microsoft's incoming chief online safety officer.

To protect your computer, you not only have to exercise caution online—you also have to be wary of phone calls from people masquerading as technicians of well-known computer companies. If you receive a call from one of these "reps," who may say your computer has been compromised and they can help you fix the problem, hang up the phone, advises Neil Rubenking, lead analyst for Security at PCMag.com. "Microsoft will never, ever call you [up] on the phone" and tell you how to fix a virus, he says.

8. Fraudulent locksmiths. Consumers are falling prey to "local locksmiths" who advertise themselves with a local phone number but are actually operating out of a call center in another city. They usually have easily searchable names like "Emergency Locksmiths" or "Locksmiths 911," says Brian Kessler, the former president of the Central Florida Locksmith Association and owner of Lock It Up, Inc. "Many advertise a $15 service call and when they come, they'll say you have a special car, or a special door, and they'll have to charge you a lot more than their first estimate," Kessler says.

[See 10 Ways to Avoid Online Scams.]

9. Penny auctions. Many budget hunters are skipping eBay in favor of penny auctions—websites that claim you can get great deals on high-priced items. Typically, penny-auction shoppers must pay for each bid they make regardless of whether they win the product. If you're not careful, "You could end up paying a lot more than the thing you 'won' is worth," warns Grant of the CFA. Before you start bidding, carefully review the auction site's terms and research prices online to get an estimate of the cost of the item you're interested in.

10. Social network scams. These operate similarly to phishing emails: Members receive a seemingly innocent message or tweet that's designed take over their account and use it to post malicious links on their status updates. Social network scams spread quickly as other people click on the person's status and the virus attacks their accounts. Outside of equipping your computer with spam filters, anti-virus software, and a firewall, the rest is left up to your judgment.