April is Financial Education Awareness Month. One of the best ways to improve or maintain your financial well-being is to be vigilant in avoiding scams, schemes, and fraud. If it sounds too good to be true, it probably is!

Here are a few of the more common types of fraud and schemes to be aware of and avoid.

Pyramid schemes are where members make money by recruiting more members to buy in to the program. These usually start out where the money that is paid by new recruits for their “investment” into the company is then given to the levels above the new recruit, including the founder. The new recruits typically lose all of the money they pay when they buy in. These schemes are often difficult to spot and can also go by other names such as gifting groups or multi-level marketing. Some warning signs are when the company urges you to “act now!”, promises of a life-altering income for little work, and requiring you to pay for the opportunity to sell a product or service.

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Ponzi schemes are very similar to a pyramid scheme where investors are required or encouraged to bring on new investors. Investors don’t know that the money they are earning is from new recruits, and not from actual investments. Some red flags are earning money no matter how the stock market is doing, not getting any information about investment schemes, and the inability to remove your money from the investment.

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Charity scams are common when there is a time of a catastrophic event. When we see tragedy, we often want to help, and scammers know this! To be sure that you are donating to a reach charity, you should check to see if they are listed as a 501(c)3 organization on the IRS website.

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Lottery and prize scams are when scammers contact you to advise that you’ve won money, a trip, or a prize. They can reach out through phone, mail, email, and text messages but in order to claim your prize, you will need to pay a fee. There is a good chance that you’ve fallen victim to a scam if you do not recall entering a drawing or contest. Sometimes, scammers will provide the name of a company that often runs real sweepstakes. You can call that company and see if you’re a legitimate winner or the victim of a scam.

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Ticket Scams are where a scam artist sells a fake ticket as bait to steal your money. It may also happen where you purchase a ticket but never receive it. This is common when popular concerts, sporting events, or plays sell out. Some warning signs are weird language or imperfect English in the offer, the dates are incorrect on the ticket, or the seller is asking for a wire transfer of money or prepaid money card. If you are looking to purchase tickets for a sold-out event, you are best to purchase tickets with a credit card or meet the seller in person in a safe location to make sure there is an even exchange for money and a ticket that is legitimate.

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Banking Scams come in many forms such as emails, calls, text messages, and letters. These communications claim to be your bank or credit card issuer asking for you to either call back to discuss an issue or to click a link to update your information. They may even claim to be investigating fraud on your account and ask for personal sensitive information such as your social security number. Some ways to avoid falling for these scams are to never call the phone number provided on the notice and never click on any links. You can call the phone number you have for your bank or credit card issuer to see if they actually need the information or if you were contacted by someone trying to scam your money and/or personal information.

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Keep in mind that these are not the only forms of fraud in the world today and protect yourself and your money. If something seems too good to be true, do your research before buying into it. Most likely, you will become victim to a scam.

AARP provides this helpful resource to search your area for active reported scams.

For more information about common scams, how to protect yourself, and reporting scams, visit Maryland Auto’s Fraud and Scams page in our Financial Education Resources section. You can also visit https://www.usa.gov/common-scams-frauds.