One of the most prevalent and copycatted scams on the internet (and indeed even in postal mail) has got to be the Nigerian Money Transfer Scam. Many people have heard of this con, but few know it has been around since the 1980’s in various forms. Today it has grown exponentially with the invention of email and the internet, and has seen countless variations.

The Nigerian Scam (otherwise known as a Money Transfer Scam) has very old roots, dating back to the early 1900’s as a scam called the Spanish Prisoner. In this version, a letter was sent to a victim stating that a rich prisoner in Spain would share his vast wealth if the victim would send money to the prison to bribe the guards to free him. Obviously there was no prisoner, and any money sent was pocketed and the victim never heard from their prison-bound partner again.

Obviously this sounds bogus to us today, but witness this email I received not too long ago, and see if you can detect the similarities to our Spanish Prisoner friend. (The link will take you to a different website).

Sound kosher? It shouldn’t. Although it doesn’t ask for cash up front, the new version of this scam uses bank policies to its advantage. If you accepted the transfer of money from these ‘colleagues’ in Africa, you would indeed receive a wire in your account. However here is where things get tricky. Wires work similarly to checks. It takes a certain amount of time to make sure the wired funds are good, and if they aren’t, they bounce. The Africans request that their portion of the funds be wired back to them no later than two weeks after you get the money. It just so happens that the bank may take up to three weeks or more to validate the first wire transfer to make sure that it is good. If you wire funds back to Africa immediately, then learn later that the first wire they sent you bounced, you now have to pay back all that money you sent out. This usually is in the amount of several million dollars.

Banks are aware of this scam and many of its variations, and many take steps to monitor any suspicious activity. However banks are limited in what they can do to protect you, often it is the victim themselves who are convinced that the transaction is legitimate. The promise of quick, easy money often blinds many to the obvious signs of fraud. If you decide, despite your banks warnings, to go ahead and wire the funds, you will be responsible to re-pay all the money.

So buyer beware! We often say a fool and his money are soon parted, but often it isn’t foolish people who are scammed by this approach, but those who are in financial trouble already. Often people won’t see the suspiciousness of the situation, they will simply see how many debts can be paid off with the money they have been promised. So the lesson learned? Take everything with a grain of salt, and if something seems fishy, it probably is. If you have doubts about it, take it to your local bank, or talk to a financial advisor. Often they will have heard of something similar and will be able to tell if it is a legitimate transaction or not.

Recently I returned from my honeymoon cruise with some hard learned lessons on how to keep your money safe from not only thieves, but from yourself. One is to have a budget (and stick to it!), the other is to be extra vigilant when it comes to identity theft. As most people know, vacationing travelers are like walking bull’s-eyes to fraudsters. Follow these tips and you’ll have smooth sailing when it comes to your bank account.

Cruising is a unique vacation experience, as anyone who has been on one can tell you. Let me give you a quick rundown on how it works, and I’m sure you’ll see where budgeting can get tricky.

Your Room Card is Your Credit Card
The first thing that most people don’t realize is that there is no such thing as cash on a cruise ship. Nor is there anywhere that you can use your debit or credit card. That little room card you are issued when you get on board does a lot more than open your cabin. It is encoded with your personal information, as well as the credit card you used to book your cruise. Paid for your cruise in cash? Doesn’t matter. Before you board you’re asked for one anyway, as this will be your onboard account. All charges, from ordering a drink to paying for a massage will go to this card.

Obviously this is where things can get sticky. After a day or two of simply signing receipts, you start to disassociate the fact that all those charges are being transferred to the credit card you gave them in the beginning. Once the cruise is over, your on board account is tallied up and charged to your credit card. The front desk on the ship keeps a running statement of all your charges, so feel free to ask for a copy each day to see where you are in terms of your budget. If anything looks suspicious or unusual, ask the staff to produce the signed receipt for the purchase.

Use Your Credit Card On Shore
Something that you should do in any unfamiliar situation, but absolutely when you’re traveling is to use your credit card for purchases. For reasons mentioned in other articles, credit cards are much more secure and safe than debit cards or cash. While traveler’s checks are the old standby for vacationers, they are being accepted less and less due to fraud surrounding them. The alternative traveler’s check-card is nothing more than a pre-paid debit card, and easily compromised. A credit card doesn’t link to your money directly like a debit card does, and it gives you plenty of time to dispute any issues. If something does happen, and your credit card is overdrawn or disabled, you still can have your debit card as a backup if you need cash.

Balance The Books
If you’re using the same credit card on shore that you used to open your on-board account, be sure to keep track of your on shore purchases and add them to your statement from the ship. Some might see their statement from the ship and think that they are within their budget, when in fact they forgot about all the charges they had at their destinations.

In the last year, it’s estimated that criminals were able to steal $3.2 billion through credit card fraud. Worse, the numbers of credit card frauds continue to rise. It’s beyond the point that cops are likely to be able to catch a crook if he commits that sort of crime. Hoping that you’ll get your money back if something happens shouldn’t be your only solution, though.

There are steps you can take to protect yourself from credit card fraud. It’s up to you, though — saying that you plan to start doing these things in the future isn’t going to stop a problem now.

1. Review your statement as soon as you get it. As soon as you spot your credit card bill in the mail (or online), open it and go over it. Look for any charges you don’t recognize.
2. Keep your receipts. You’ll want to double check your receipts each month against your credit card, to make sure that charges are correct. Don’t throw away your receipts — there are people with no compunction about rooting through your trash. Personally, I keep all my receipts at least until I finish my taxes for the year, just in case I can deduct something. But if you choose to get rid of your receipts sooner, you should at least shred them before throwing them out. You can get a decent shredder for under $40 at most office supply stores.
3. Shred credit card applications. You should be shredding any sensitive information before throwing it out — and credit card applications are definitely sensitive. It’s very easy for someone to complete one of those pre-approved applications in your name and rack up bills without your knowledge.
4. Shop online carefully. Not all websites are completely secure, so you should think about how reliable a site seems before you purchase through it. Big sites that are known to do lots of transactions are generally okay, but if a website looks like no one has ever bought through them before, be cautious.
5. Keep an eye on your card. When you use a credit card to pay for something, watch where it goes. It may not always be in your sight, but the more observant you are, the more likely you are to catch someone trying something with your card.
6. Carry only the cards you need. On any given day, do you really need to carry a stack of credit cards thick enough to play a round of poker? Odds are that you’ll only need one or two, so leave the rest of the cards at home. This goes double if you’re traveling — the more cards you carry, the more likely you’ll lose at least one.
7. Write down your numbers. If anything does happen to your cards, you’ll need the contact information on the back of your card, as well as your account number on the front. It’s kind of a Catch 22, but you can make the situation easier by already having a list of both numbers. Want to make it super easy? Photograph both sides of your card with a digital camera, and save the files somewhere safe.

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What’s a Look-Alike?
Certain websites, particularly eBay, have been targeted for an unusual form of identity theft, look-alike websites. This scam exploded around 2002, but the technique is still in effect today. Essentially the scam uses a website that looks very similar to a legitimate one (like eBay.com), and then asks you to ‘verify’ your personal and financial information by filling out a form on the bogus website. When you hit submit, it sends your info straight to identity thieves.

How Do You Spot One?
Identity thieves will send mass emails to people who use a particular website, like eBay. The email will use the same logo as eBay, have the same formatting as valid emails from the company, and will often seem fairly benign. Often when you are asked to ‘verify’ your information, the link you click on will actually have ‘eBay’ in the address, adding to the perceived validity. However if you look closely, you’ll notice that these addresses also have other words, like ‘www.change-ebay.com’ or ‘www.verify-ebay.com.’ These are domain names that are purchased (often with stolen credit card numbers) for the sole purpose of stealing your information. These websites often will only exist for a few days before they are found and shut down, but they stay up long enough to snare a few unwary people.

What Do Thieves Do With Your Info?
Websites like eBay are vulnerable to this type of fraud, mostly because they require almost all of their users to input personal and financial information in order to use the service, as well as repeatedly asking users to input their username and password. Often the bogus websites will simply have a login page, where you enter your username and your password, like you do every time you login to the real service. With access to your account, not only can thieves get your credit card info, but they can post fraudulent sales and collect money from other users (while never delivering any goods, of course). All of this activity, by the way, is under your name. The identity of the fraudster is almost never discovered.

How Do You Prevent It?
Pay very close attention to unsolicited emails from online services. The reason why this type of fraud works so well is because eBay and other websites will send you (valid) unsolicited emails about services or your account. Discerning the real from the fake often takes a critical eye and a cautious hand. Make sure you look at the address of any link in the email, valid eBay links always start with ‘www.ebay.com/.’ If the message is talking about a sale or a purchase you didn’t make, verify it by going to the website itself (don’t click links from the email) and contacting people through the links there. If anything looks questionable, question it! Websites like eBay have set up hotlines for emails that may be fraudulent. You can forward the message itself to their offices, and they will respond and let you know if it is valid or not.

Ok, the unthinkable happened. You wake up one morning and get a cup of coffee on your way in to work. You swipe your debit card, there’s a pause, and DENIED flashes across the screen. Denied for a $2 coffee? How can that be? Embarrassed, you leave the coffee and slink out of the shop. You get into work and check your account online, only to find that you now have -$83.65 in your bank. You’ve been hit with debit card fraud.

Many people are surprised to learn that most debit card fraud occurs when the card owner still has the card in their possession. I certainly was surprised when I had to leave the coffee steaming on the counter and found that someone in California bought an X-Box with my money. Follow the tips in the Debit Card Fraud Prevention article to make sure this doesn’t happen to you. But if you’re like me and this has happened to you, keep reading to see how you can get your money and life back on track.

Do Some Detective Work
The best weapon you have against fraud is information. Check your bank account online to see what is going in and coming out. As soon as you see something weird, note the date it happened and the exact amount, and most importantly, where. If something was bought in New Jersey and you live in New Mexico, you might want to take a closer look.

Tell Your Bank
As soon as you think you’ve been defrauded, tell your bank. Each bank has different methods for dealing with fraud, mine had me fill out an affidavit stating that I did not authorize the transaction. This may be a long and tedious questioning process, but you have to realize the bank is going to end up paying you back your money and taking the fraud as a loss, instead of you. Therefore they want to make absolutely sure you’re telling the truth, and not just trying to get out of paying a big bill. This process can take up to 10 days while the bank researches the transaction to make sure that it was fraudulent.

Do it Fast
There is a limited amount of time between when a fraudulent transaction occurs, and when you can get reimbursed for the funds. Federal law states that a customer is liable for a maximum of $50 if they report the fraud within two business days, $500 if reported within 60 days, and unlimited amounts if reported after 60 days. Most banks, if the fraud is obvious and the customer is in good standing, will cover all funds that were stolen, but only after an investigation period.

The keys to recovering from fraud are information and communication. You have to arm yourself with knowledge not only of the comings and goings of your own accounts, but also the laws governing fraud. Once you are conscious of these things, getting in touch with your bank and staying in touch with them will expedite your recovery immensely.

Debit card fraud is sometimes lumped into the same category as credit card fraud, but the two are very different. Debit cards link directly to your money, your real cash, and recovering those funds is a long and tedious process. Here are a few simple things you can do to shield yourself from debit card fraud.

Use the internet or automated phone service to keep tabs on all your accounts.

Checking the balance in your checking account every other day will arm you with the best defense against fraud: information. The more familiar you are with the comings and goings of your account, the quicker you can spot something fishy.

Don’t use your debit card for purchases at places you don’t trust.

If you’re unsure about the security at a place of business, use your credit card or cash to pay. A credit card doesn’t suck the funds from your bank account immediately like a debit card, so it gives you some time to check and make sure everything is alright before paying off the balance. This applies for online purchases as well. Treat websites the same way you would treat brick and mortar businesses, if it looks untrustworthy, don’t trust it!

Hold on to your card

Most restaurants are fairly trustworthy places, however it is an ideal environment for a devious waiter to make off with your card number. When you give them your card to pay the check, they take it back to the register, usually out of sight, and run the transaction. This gives them plenty of time to copy your number, your signature, even the little security code on the back.

Spread out your money

Don’t link all your accounts to your debit card! If someone gets hold of the number they can completely clean you out. Instead, have a small savings account that can only be accessed by the old fashioned human teller at a bank branch. That way if your checking gets wiped out, you still have some cash in your savings. This is important, because the bank could take up to 10 days to investigate your claim, and they won’t refund you until that time is up.

While using debit cards may sound insecure and dangerous, the reality is that with a little precaution and knowledge, they can be excellent tools. Banks are starting to emplace more safeguards on debit cards, such as transaction amount limits. These limits can be lifted for certain authorized transactions if you contact your bank, but in case your card number falls into the wrong hands, the thief can only take a certain amount out in a 24 hour period.