- The Nigerian/East African/Middle Eastern scam: Most of us have seen emails in which we are promised a large cash reward in return for sending a few thousand dollars in order to free up access to the email sender’s fortune. In real estate, the scam involves overseas buyers who are looking to buy expensive properties. Contact names and phone numbers are given but are not easily verifiable. Eventually, the sender or an associate calls from an airport in the United States and says they are being detained. They ask you to wire them a few thousand dollars in order to clear up their situation. The best defense is to avoid anything that offers a return that is too good to be true and to never wire any amount of money to a client who you do not know.
- The overseas investment and return scam: This is a classic Ponzi or pyramid scheme, whereby the scammer collects money from a number of investors and then disperses small amounts in return, which are taken from new investors. Eventually, the pyramid collapses and this too good to be true investment blows up in the investors’ faces. The best defense is to avoid something that sounds too good to be true.
- The local investment scam: A local variation of the pyramid scheme, this scam attracts more victims because of the familiarity of the landmarks. The best defense is to investigate the building by inspecting the site, asking the contact person for a letter of credentials and verifying that the letter of credentials is valid.
- The Internet advance fee fraud: You are asked for a downpayment in order to get your return. Over the Internet, you wire a small amount of money (usually a few dollars) to the client in order to free up channels that will ultimately return profits from a commercial or residential project. These scammers collect a few dollars from hundreds or thousands of victims who are unsuspecting of the small amounts they are asked to wire. The best defense is to never wire any amount of money over the Internet.
- The rental scam: The scammer places an ad in the newspaper or on the Internet that offers a property for rent that is well below market value. When you go to meet the contact you are told that you can’t view the property because the tenants are there but that you can put down a refundable deposit if you are interested. The scam artist simply makes off with your deposit. The best defense: Giving money to someone you don’t know to hold something you’ve never seen is never a good idea.
If a scam comes to your attention, refer them to
www.scambusters.com
Provided by: Realtorlink June 15th, 2007