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Beware of financial scams

business Updated: Sep 20, 2008 00:28 IST

Financial scams spell doom for many people. A majority of these scams are done under the guise of luring a person to earn a quick buck. The Reserve Bank of India and many other financial institutions warn investors against putting their hard-earned money into such activities. Therefore it is necessary for an individual to ensure that he or she stays away from such situations, especially the following ones which have become very common:

Lottery wins

One of the most common scams is the one where a person is told that he or she has won a lottery. On the face of it, this may look like a get-rich-quick scheme. However it is nothing but an effort to take money from the person. The intimation about the lottery win is sent to the person who in turn is asked to send only his or her bank details and some basic information. Not sensing any risk in such a situation the person willingly gives the information. This is usually just the start because before any so-called money (which is never there) comes into the account the person is asked to provide a small sum of a few thousand rupees to free up the amount. The person in the greed to get the funds sends this amount across and that is usually the end of the matter as there is no further news leading to a loss of the amount.


Another variation of this entire scam is where once again letters and emails are sent saying that there is an inheritance waiting to be claimed. The modus operandi here is the same, where initially just a little bit of information is called for and before the so-called inheritance payment comes across some amount has to be contributed by the person. The moment this is sent across the person promising the inheritance disappears along with the money leaving the person poorer by a few thousand rupees.

Information use

One also has to be careful to not only avoid such situations but also ensuring that sensitive information like account numbers and other bank account details are not given out. These are often used to transfer funds where the individual letting out such accounts is promised a commission for letting the funds come in and go out of the account. Again the person here feels that this is a case of earning money for free but often the money being transferred is laundered money and the person letting out the account can end up in trouble with the law.

Stay safe

*Financial scams are quite common these days

*All these scams look like get-rich-quick schemes

*Individuals should stay away from such offers

*Lottery and inheritance are common examples used to lure people

*Individuals should not give out their account numbers be used for routing laundered funds