10 Golden Rules to Avoid Getting Scammed

Have you ever bought a product based on a powerful testimonial, only to find that it did not in any way measure up to the hype? Or grabbed a low-interest credit card offer only to find the rate quickly soared to ridiculous heights? Or gotten something for free that really wasn’t free — like an awesome deal on lodging that turned into a high-pressure sales pitch for a timeshare?

These experiences can be costly and, frankly, kind of humiliating. You find yourself wondering why you didn’t see it coming.

Well, I’m here to offer you a money-back guarantee that if you follow my 10 Golden Rules of Scam Prevention — or even just some of them — you’ll never be foolishly parted from your money again.

1. Testimonials are a testament only to gullibility

Testimonial
Vitali Michkou / Shutterstock.com

There’s only one kind of testimonial worth believing — the kind that comes from people you personally know and trust.

Testimonials from strangers you see on TV or online may very well be lies. I’ve personally met more than one infomercial actor who’s told me they simply read a script without ever seeing the product.

So, the next time you see an ad, website or infomercial, ignore all testimonials.

2. ‘Documented proof’ is neither documented nor proof

Fake money
TRAIMAK / Shutterstock.com

Don’t believe your eyes. Anyone willing to rip you off is willing to create fake checks, letters or anything else to support his or her sales pitch. Such con artists are able to easily do so by using programs like Photoshop. And even if the earnings you see are real, that has no bearing whatsoever on what you’ll earn doing the same thing.

I once attended a multilevel-marketing meeting at which a speaker took the stage and held up a check for some ungodly amount of money. He claimed it was one month’s earnings that came entirely from sales made by those in his down-line.

After the meeting, I asked the speaker exactly how many people were in his down-line. A few calculations revealed that for everyone in his audience to make the same monthly income, they’d collectively have to recruit more people than there were on the planet.

3. Guarantees are no guarantee

Victor Tongdee / Shutterstock.com

One of the most universal components of any scam is that the results are “guaranteed, or your money back!”

Guarantees only carry weight if you know and trust the company behind them. If a major retailer or company that is a household name offers me a written guarantee, I might believe it. But if some guy on an infomercial or unknown website offers me a money-back guarantee, it might as well be in Chinese, because it’s totally meaningless. When he doesn’t refund your money, what are you going to do? Take him to court?

4. It’s not fine to ignore the fine print

Fine print
Irina999petrova / Shutterstock.com

Virtually every deal that goes awry is the result of people listening to the sales pitch without reading the fine print. If you were unaware that your mortgage payment would go up after three years, your credit card interest could jump from 9% to 29%, or that mutual fund was risky — well, you didn’t read the fine print.

I was a stockbroker for 10 years and have been involved with sales of one kind or another for nearly 30. Trust me — a salesman’s job is to sell “sizzle.” It’s the fine print’s job to offer the “steak.”

There’s a reason that fine print is there. If you don’t understand it, find someone who does.

5. Haste lays waste to your savings

Confused man
fizkes / Shutterstock.com

If “the train is leaving the station,” wait for the next one. The easiest way to steal someone’s money — other than perhaps with a gun — is to force them into a quick decision.

The only people who can wisely make snap decisions regarding a purchase are those who are experts at what they’re buying. You’re an expert at buying milk, jeans or any number of consumer goods. But if you’re not an expert at what’s being sold, slow down.

From buying a house to getting married, the time spent on a decision should directly correlate to its potential ramifications.

6. Seek and you shall find

Dean Drobot / Shutterstock.com

I once got an email from a reader asking if she should pay some website to get a government grant for her small business. I went to a search engine and put in the words “government grants for small business.” In 0.31 of a second, I was directed to a U.S. government website with these exact words: “The federal government does not provide grants for starting and expanding a business.” Thus, the site was a rip-off.

I was glad to help the reader, but I solved this problem in less time than it probably took for the reader to send me the question. The internet is a powerful tool — use it.

7. Before listening to strangers, listen to strangers

A. and I. Kruk / Shutterstock.com

Don’t just search the internet for the pitch you’re getting. Add words like “review” or “rip-off” to your search. There are sites that specialize in consumer reviews, from Scam.com to Ripoff Report to the Better Business Bureau. With all of this information available, it’s amazing that people still blindly enter into transactions when they could easily have known better.

However, recognize that anyone can say anything about anything for any reason. Reviews, both good and bad, can be made up, and frequently are. But they’re better than nothing, so they are worth a fraction of a second to uncover with an internet search.

8. Use the help you’ve already hired

American Flag w Money
Florence Joseph Mcginn / Shutterstock.com

Imagine paying thousands of dollars for expert advice about avoiding rip-offs — then totally ignoring it. That’s what a vast number of Americans do, because they pay thousands of dollars in income taxes to fund agencies like the Federal Trade Commission, then ignore all the free advice they publish.

For example, here’s just a little of the information the FTC has published on avoiding rip-offs:

9. Getting something free? You might be the product, not the customer

Free
ESB Professional / Shutterstock.com

We all take advantage of free stuff, from information to products. In fact, you’re doing it right now. But be aware, lunch isn’t the only thing in life that isn’t free. The motivation for those offering some free things is apparent. For example, this article is surrounded by ads that hopefully will generate enough income to justify the time I spent writing it. (Speaking of which, it wouldn’t kill you to click on an ad now and then, you know.)

But with other free things you find — especially online — consider the motivation of those offering it. If you’re being asked for a lot of personal information, that information could be sold — perhaps to someone you’d rather didn’t have it.

10. If it sounds too good to be true, it probably is

Ollyy / Shutterstock.com

The best way to avoid getting ripped off is to simply ignore people and companies that promise simple solutions to complex problems. Nobody is going to show you how to buy a house for $398, nobody is going to provide a consistent 12% return without risk, and nobody knows how to make big bucks with little effort at home in their spare time.

Think about it: If these claims were true, why would the people making them share that information with you?

The bottom line

scam
Lemau Studio / Shutterstock.com

Avoiding being scammed is simple, but it’s not easy. It’s simple because simple logic reveals most scams — see rule No. 10. But it’s not easy, because humans are programmed to trust people and to hope for the best. Deprogramming takes time, but now is as good a time as any to start the process.

How to earn $30 in less than 30 seconds

Earn extra money by using Rakuten (formerly known as Ebates) — a site that gets you cash back at more than 2,500 stores. As a bonus for joining Rakuten between now and Aug. 6, 2020, you'll earn $30 when you spend at least $30 shopping online through Rakuten within the first 90 days. Start earning cash back and claim a free $30 bonus today.

Read Next
17 Amazon Finds Under $20 That Will Organize Your Life
17 Amazon Finds Under $20 That Will Organize Your Life

We’ve rounded up must-have products to help you get your ducks in a row.

8 Key Steps to Planning for Retirement as a Couple
8 Key Steps to Planning for Retirement as a Couple

Ready for retirement? Not so fast. You might be surprised at some of the issues that come up for couples when they plan.

Should You Hire a Service to Negotiate Your Cable and Other Bills?
Should You Hire a Service to Negotiate Your Cable and Other Bills?

Services like BillCutterz and BillFixers will negotiate your cable, internet, phone and other monthly bills in exchange for a share of the savings. I tried it: Here’s what happened.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

Have You Heard of This Best Place to Retire in 2020?
Have You Heard of This Best Place to Retire in 2020?

The best place to retire in America is one you likely are not familiar with.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
Will I Get My Ex-Husband’s Social Security When He Dies?
Will I Get My Ex-Husband’s Social Security When He Dies?

Two factors determine how much money is coming to you.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

16 Amazon Purchases That We Are Loving Right Now
16 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

5 Household Disinfectants That Can Destroy the Coronavirus
5 Household Disinfectants That Can Destroy the Coronavirus

You likely already have some of these products at home.

22 Things You Should Always Buy at a Dollar Store
22 Things You Should Always Buy at a Dollar Store

The dollar store has great bargains on these purchases.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You probably don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

6 Reasons I Will Never Trust Suze Orman
6 Reasons I Will Never Trust Suze Orman

Beware: The self-proclaimed personal finance expert has a track record that suggests more sizzle than steak.

America’s Most Reliable Appliance Brand Is a Surprise
America’s Most Reliable Appliance Brand Is a Surprise

Have you heard of this appliance manufacturer?

The Top 11 Jobs That Employers Want Retirees to Do
The Top 11 Jobs That Employers Want Retirees to Do

Tired of age discrimination? Businesses are clamoring for older workers to fill certain roles.

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

Getting These 2 Shots Could Reduce Your Risk of Dementia
Getting These 2 Shots Could Reduce Your Risk of Dementia

These vaccines may lower the risk of Alzheimer’s disease by up to 40%.

19 Purchases That Buyers Almost Always Regret
19 Purchases That Buyers Almost Always Regret

Think twice before buying these things.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

8 of the Worst Things to Buy at a Dollar Store
8 of the Worst Things to Buy at a Dollar Store

Not everything sold at dollar stores is a great bargain or a safe purchase. Here’s our list of products to avoid.

41 Things You Should Never Buy
41 Things You Should Never Buy

Some purchases are just plain dumb. Give yourself — and your budget — a break. Don’t spend money on this stuff.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

9 Things That Are Free in August
9 Things That Are Free in August

As summer enters the home stretch, we’ve rounded up these sizzling freebies.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.