Classified ads are the prime hunting ground of internet scammers. Scammers lurk in just about every section of classified websites: From small items for sale to the job sections to tickets to automobiles. Even the housing market is a target. These scammers have come up with some very devilishly clever ways of taking your money out of your pocket.
What are some scams you should look out for? And how can you avoid them?
The Apartment Scam
This scam is one of the most painful and deviant scams on the market. It’s also one of the most difficult to avoid. Here’s how it works.
A scammer rents an apartment in a central or highly desired location, possibly using fake identification.
The scammer then posts the place up for rent on a classifieds website. He’ll offer the place for significantly less than market rates and get a lot of people to reply.
When he shows the house, he’ll say it’s first come first serve. He’ll then take the first month, last month and security deposit of anyone who shows up. He’ll tell them they can move in on the 1st of next month, which might be two weeks away.
Between posting the ads and the beginning of the next week, he might take the first month’s rent, last month’s rent and security deposit of 10 to even 20 different people. Then he’ll disappear to the next town and repeat the scam.
Avoiding this scam is tricky. The best way to avoid this scam is to do a bit of a background check on anyone you’re renting from.
If you’re writing a check, ask if you can post-date the check to your move in date. Also, make sure you’re making the check out to a company that’s incorporated in your local state. Avoid writing checks to individuals, unless you can verify that they’re truly the landlord.
Google your building to see if there’s professional management. If so, call the management company to verify that the landlord is truly the landlord.
Fake or Cancelled Tickets
Another common scam is the fake or cancelled tickets scam.
The fake ticket scam is simple enough. A scammer who’s good with printer technology buys one real ticket, then replicates it dozens or hundreds of times. He then sells that ticket to buyers on Craigslist.
The best way to avoid this scam is to call the ticket issuer and verify that the ticket is indeed legitimate before handing over the money. For example, if you’re buying tickets to a ball game, call the ball park and make sure the ticket is a real ticket.
A more mischievous scam is the cancelled ticket scam. This tends to be with airline tickets, but can apply to other tickets as well. The seller sells you the ticket, which is valid ad the time of purchase. Right when you walk out the door, they call the airline and cancel the ticket. They’re refunded their money and you have no recourse.
The best way to avoid this is to transfer the ticket at the seller’s house. If you know where they live, it’s much harder for them to perpetrate a scam.
The Fake Escrow Company
Say you’re buying a $15,000 car. The seller can’t meet with you right now, but you can rest assured – Instead of transferring the money to the seller, you’ll transfer the money to an escrow company. Everyone’s safe, right?
Wrong.
Craigslist scammers will often setup their own escrow companies, designed to look highly legitimate. These escrow sites will look and feel exactly like the real thing, with one important difference: Once you transfer the money, you’ll never see it or the seller again.
There are a couple ways to avoid this kind of scams.
First, use either Escrow.com or another reputable escrow service. If the seller insists on using their escrow service, consider that a huge red flag.
Likewise, if the escrow company requires you to wire money to an offshore bank account, that should also be a big red flag. The escrow company should be USA based. Do a Better Business Bureau search for the company’s name before transferring the money to see if they’re real. You’re not looking for a lack of negative reports, as a fly-by-night operation won’t have negative reports. Instead, you want to make sure they’ve actually been vetted, as any real escrow company would be.
Various Jobs and Employment Scams
There are a few different job scams you need to lookout for.
First, you have scams that are designed to solicit information. This information can then be used against you in identity scams.
For example, someone posing as an employer might create a web form you need to fill out in order to apply for the job. It might ask for information like you date of birth, driver’s license number, address and possibly even your social security number.
Alternatively, the employer might just ask you to send in a full resume, including name, date of birth and address. Even with just that information, a lot of harm can be done.
How can you avoid this scam? For one, never put your home address on your resume. Be wary of web forms that ask for too much information.
Another common jobs scam involves scammers who try to get users to fill out forms. You might be asked to fill out 3 pages of forms that all seem to lead to a job; but on the last page you need to enter your cell phone number to get subscribed. You’ll then be signed up for one of those $9.99 a month cell phone billing subscriptions.
How can you avoid this?
For one, make sure you’re dealing with a legitimate company. A search with the BBB will often take care of this. Never enter a PIN number sent to your cell phone onto a website. In order to bill your phone, the website needs to send you a text with a PIN. Once they have that number, they can bill you. If a site asks you to receive a PIN number on your phone, it’s almost definitely a scam.
Various Check Scams
There are a lot of ways scammers can use checks against you. As a rule of thumb, you should never accept checks or money orders from classified ads sellers.
For one, you have the counterfeits. Money orders and checks can both be faked extremely well by scammers. These checks will be accepted by the banks at first and a portion of the funds may even be deposited into your account. However, once the bank realizes that the money isn’t really there, it’ll be debited from your account. You’ll also often get charged a fee for trying to cash a fake check.
Another common scam is for a buyer to send you a check, but “accidentally” wrote it out for a higher amount. For example, you may be selling an item for $1,250, but they wrote $2,150 instead.
They’ll act like they’re in a big rush and ask you to either send a check back for the difference or wire the money. Of course, their check will eventually bounce and you’ll be out the difference.
Again, the rule of thumb is very simple: Deal with cash only. If the sum is large enough to warrant a check, use a reputable escrow service. You can also walk with them to their bank and watch them get a cashier’s check.
If you can’t use cash, PayPal is a good alternative. Make sure the money clears with PayPal first before handing over the goods. Never use wires, never use Western Union and never use checks for Craigslist transactions.
Often time’s buyers will have complicated reasons why they can’t use cash or a reputable escrow. Maybe they’re out of the country. Maybe their money is in a special trust account. Whatever the case is, just say “no” to these so-called special circumstances.
These are some of the most common Craigslist scams. Use you common sense and trust your instincts. If a deal seems too good to be true or if red flags go off in your head, pay attention.