Editor's note - You can trust the integrity of our balanced, independent financial advice. We may, however, receive compensation from the issuers of some products mentioned in this article. Opinions are the author's alone, and this content has not been provided by, reviewed, approved or endorsed by any advertiser.
10 tips your money is about leave out the back door.

Have I got a deal for you. Instead of paying the list price of $400,000 for that house you want to buy, you’ll pay $450,000. You’ll finance the entire purchase. The seller will give me the extra $50,000, which I’ll invest in one of my many businesses, such as automated teller machines, video advertising and other Web-based ventures.

The profits will be enough not only to cover the mortgage, but to actually pay it off in five to seven years. At that time, you can either sell the home or refinance, and we will split the equity 50/50. So with nothing down, you’ll live mortgage free for five to seven years and walk away with 50% of the home’s equity. Oh, and I’ll also donate some of the money to charity, too.

Are you being conned? Is the offer “too good to be true?” This is exactly what a company called Metro Dream Homes is offering in the Washington, D.C. area, according to Elizabeth Razzi of The Washington Post in an article entitled, Something for Nothing Home Deals. I’ll leave it to you to decide if the deal is legit. As for being conned, here are 10 ways to instantly spot a swindle:

1. Common Sense: Many cons just don’t pass the laugh test. At 6.5% interest on a 30 year note, the principal and interest of a $450,000 loan will set you back more than $2,800 per month. (Use this loan payment calculator if it helps.) Add to that insurance and taxes, and there is no way the income from a $50,000 investment will cover the mortgage, much less pay it off in five to seven years.

2. Pressure: Many cons use pressure to get you to part with your cash. Sometimes it takes the form of a limited time offer, other times the con artist will tell you the opportunity is available to only a limited number of participants. Whatever the pitch, the goal is to move you to a quick decision now and to prevent you from thinking about the deal or seeking the advice of your spouse, other relatives or friends.

3. Get Rich Quick: Many cons work because of the victim’s own greed. We all want to make money, and the sooner the better. But get rich quick schemes usually only work for the person who’s peddling the scheme. This is a common theme in real estate, which seems to attract those who promise real estate riches with no money down in just a few months or years.

4. Fear of a Missed Opportunity: The fear of a missed financial opportunity can be a powerful emotion. And con artists know this and use it to their advantage. If you sense this emotion in you, alarm bells should be sounding.

5. Unanswered Questions: Particularly when a lot of money is involved, you should be asking a lot of detailed questions. You should also be seeking verification of the answers to the important questions. In the case of Metro Dream Homes, for example, I wonder if participants have asked for audited financial statements of the businesses that supposedly will generate enough profit to pay the mortgage. The point is, if the person you’re dealing with won’t give you straight, verifiable answers, there’s a problem.

6. New Friends: New friends or acquaintances who immediately begin a sales pitch should raise significant questions. This often happens in churches and other religious settings where we tend to let down our guard. In some cases, the individual is involved in a multi-layer marketing program which may or may not be legitimate. But when new friends are too friendly and asking for your money, put your guard up.

7. Requests for Help: Unfortunately, requests for help from strangers or new friends are frequently part of a scam. Now I’m not talking about someone asking for a few dollars. Often the request is to pay for medical costs of a sick loved one or some other seemingly benevolent need. To distinguish the real needs from the schemes, you must verify the information you’ve been given.

8. Requests for Personal Information: This is simple–don’t give to strangers your personal information, such as your social security number, mother’s maiden name or your birth date. And if you receive an e-mail from what looks like your bank asking for such information, you know instantly it’s a scam. Your bank will never ask for this information in an e-mail because your bank already has this information.

9. Secret Information: Many cons work because the victim is convinced that he or she has been given valuable information that others don’t have. This is a common theme in frauds involving hot stock tips or other investments. Your first reaction may be to question why the con artist is giving you this information, rather than taking advantage of it himself.

A con artist will always have an answer to this question. It may be that he likes helping other people or that he’s only letting you in on the deal, nobody else. In fact, his answer to your question is generally designed to make him look better (I like helping others) or you feel special (you’re the only one I’m telling).

10. Cash Only: Many cons involve cash only, including wire transfers. One such con is where the con artist over pays for something (like the first month’s rent) by money order, asking you to wire the difference back to him (often for traveling money because he’s moving from another country). The money order turns out to be fake, which your bank doesn’t learn until many days after you’ve deposited the check. By then, however, the wire transfer has been processed and you’ve just been scammed.

Anybody can be conned under the right circumstances, even a con artist. But looking for one or more of these indicators will go a long way in spotting the con before it’s too late.

Author Bio

Total Articles: 1080
Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Article comments

Pinyo says:

Hey this is a good list. Here are two more. If it sounds too good to be true, it’s a scam. If it involves a lot of money and you have to send money through Wester Union, it’s a scam.

Scammed by Metro Dream HOmes says:

Please visit this thread for more details on these crooks! and spread the word! Thank you!


courtney Taylor says:

Enjoyed your article especially about being conned at church or a regilious setting. Even though I am not religious I can understand the concept of a social setting and letting your guard down. Thanks for letting me know I am not alone in being conned. I was happy to hear that once in awhile a conned gets conned too. Hey, if you have any other stuff on being conned can you send it my way? Thanks in advance.

autumn says:

i have made a friend on a dating line, he says he was working in nigeria, and would be back this wekend,,,,,aparently he was robbed, and the bank are verifiying things, and will have no money until monday, my fault, but i offered to lend him some, he said 500 would get him through, until things were sorted, i have not given him the money, and he has not asked again, what do you think, how can i check his story….autumn

Autumn says:

Hi Autumn,
your story sounds so familiar to me. I know this story was written in 2008 but my story is familiar with yours. This guy I met online he claims to be in Nigeria on contruction project and wants me to wire money to him. Anyway just wanted to know if you could give me any information on this man, please. Im so scared I might be involved in somthing that I had no idea I was getting meself into. I have children and I dont want to go to prison. please email. Thank you.

John says:

Ladies, I just want to give you a heads up. Nigeria, especially Lagos Nigeria, is known to be one of the major hubs for internet dating cons.

If a guy has to ask you for cash, he is not worth the time. If a guy is asking for money by giving you a sob story and using your good will and emotions, he is conning you.

I have had to help out a friend who was so desperate to get married that she was conned once by some guy in the US and almost was had by a man in Indonesia.

They guy in Indonesia use the same trick… bank having problems, need money, can you help. It of course had a sob story in there.

Best of luck

andrew dainty says:

Dear sir,i am talking to the most beautiful girl from accra ghana,on the internet,she has sent me photos of herself,well i presume it is her,she is white with the most stunning looks,she says she wants to come to england to stay with me.but requires me to send her 200 pounds sterling so she can get a passport.this seems a bit steep to me.i have also spoke to her on the telephone and to me she sounds black african,could this be genuine or a scam.

John says:

Andrew, I know this is a little late in coming but you might have found out by now.

Gahna is one of the most black nations in the world. The white population there is miniscule. So small that they fail to mention them in the CIA fact book. So a beautiful white woman looking for a husband would be like a diamond looking for a willing receiver.

I once talked with a Beautiful woman on E-harmony back in 2003. She was so perfect that I could not buy into her story of poverty and dreams. I googled her name… she was actually a man, posing as a woman. He used multiple identities. Most of the cons out there have been using the same picture for years. They just switch names.

good hunting.

Zoe Napier-Hemy says:

I connected with a man on a dating sight. Our profiles were so in line with each other. Soon after he wanted to connect via our personal emails, so I agreed. We exchanged lengthy emails and I was truly touched by what he shared with me. A week later we spoke on our cells and I was further drawn in. A week later he texted me, that he had to catch a booked flight for business purposes. Soon after he explained that he needed funds to get a cargo box through customs. He didn’t ask me for $ at this stage, but I offered the $10k he was needing. A few weeks later he did ask me for more $. In all, I have forwarded $190k Canadian. The cargo has moved through customs and is now at another customs port. Apparently another $118k is needed to finally clear customs and the cargo will finally be on it’s way, once and for all. Have a not been the biggest fool? I have somehow fallen in love and have not even met this person. OMG!!