Here Are 7 Scams Which Could Cost You Your Savings

Computer displaying internet fraud and scam warning on screen

Desktop computer displaying conceptual internet fraud and scam warning on screen


Ask around in your circle of friends – there will be someone who has a family member or friend who lost their savings in some scam. It happens quickly, easily and regularly.

Targets are chosen carefully

Scammers are also getting more and more sophisticated, and they make use of a variety of methods often to target newly retired people, or people who are known to have some life savings. Also be on the lookout for identity theft, a scam in which someone uses your personal details to open accounts and make fraudulent purchases.

Scams can include getting people to invest money in a pyramid-type scheme, or a phoney investment scheme, or scamming them online by getting hold of their banking details and PIN numbers, gaining their trust and getting them to ‘help’ someone they think is a friend or a family member in a crisis, or getting them to give a loan to someone who has no intention of paying it back.

The list carries on – when money can be gained in dishonest ways, there is no lack of inventiveness on the part of fraudsters. But more about this further down.

The way to financial dependence

The devastating thing is that if you lose your savings after retirement, it could mean financial dependence on others for the rest of your life. That is not a situation anyone enjoys being in.

Many people are far too sure that they will never fall for anything like this, but scammers are clever manipulators, and many of them count highly educated and financially savvy people among their victims. They rely on people’s greed/need to increase their savings, on the fact that they can get people to trust them, and that most people are inherently good and would like to help a friend in a crisis.

The two things they all have in common is that you think you’re doing yourself a favour/being a good Samaritan, and you are left with your finances in ruins.

Here’s more about the different methods scammers use to get at your savings.

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Email scams

These are fairly easy to spot – someone you don’t know contacts you, asking you to be their ‘business partner’ by letting them invest vast sums of money to which they have access in your account.

There is always a hint that the money is slightly tainted (an unclaimed inheritance lying in the bank/ money from a relative of a now dead minister in a former regime/a winning lottery ticket they have laid their hands on), otherwise they would just deposit it themselves without involving you.

But before you can lay your hands on these millions, there are ‘costs’ involved – bribes for officials, bank charges, etc. And these all have to be paid by you. There is no grand prize – the scammers are milking you for the apparent charges and they will disappear the moment your account is empty.

Phishing scams

These are often people calling or emailing pretending to be from the bank or a financial institution, or from some business who needs to ‘update’ their records. Whatever the story, they need your bank details, credit card number and passwords.

Once they have them, they find a way to do a SIM card swop on your cellphone, they go online, create a new beneficiary on your account, and transfer all your cash into your account. People fall for this scam as they think the caller is legitimate, and some older people might be new to the world of online banking and not realise the dangers of giving any information to strangers.

You should never give any financial information online or on the phone to anyone who has not been vetted. Also change your passwords regularly  – and be very wary if your phone has been stolen.

A love affair

This scam is as old as the hills: a fraudster sets about to make someone fall in love with them (they might even go as far as to marry them) but their sole purpose is to get their hands on the person’s cash.

Once the victim trusts the scammer and his/her intentions, it is not difficult to convince the person to give the scammer signing rights on an account, or to open a joint account. Friends and family can warn till they are blue in the face, but love is blind.

And the next thing the scammer is gone with all the cash, and the victim is left with a broken heart and an empty wallet.

A friendship

You make a new friend, who quickly starts to play a really big role in your life. This person seems to be on your side and is kind and attentive (maybe too attentive) and is often around.

By all means make new friends, but be very wary when any money starts to pass hands. Also, watch out if you notice you always end up footing the bill when you go out. There are people who specifically target elderly people who might be lonely, and who either don’t have family or whose family members are far away.

Before long subtle hints about financial help will be made (kids’ school fees, car that has broken down, medical costs) and pressure starts to be applied. Some of these people even manage to convince their targets to change their wills. Watch out, as these scammers will think nothing of bleeding you dry.

Phoney investment schemes

This happens so frequently that there are several programmes on the DStv crime channels about this. This is how it works: someone you think you know quite well (often a family connection, or someone from the church) tells you about a fabulous investment scheme, in which you can get a very high return on your money.

There are always examples of great profits other people have made, and you feel left behind if you don’t jump in. But it is indeed too good to be true: either it is a pyramid scheme, in which old investors are paid with the money of the new ones, or simply a scam, in which the person running the scheme absconds with everyone’s money. The lure of high interest rates should always sound a warning bell.

A sham charity

This has become easier to do now that people can donate to charities via SMSes. But the scam is an old one: a fraudster pretends to be collecting money for a very worthy charity (often for emotional causes involving kids or animals in dire straits), gets people to donate to the cause, and then pockets the money.

Before giving to any charity, check up on their credentials and whether they are even registered.

Family ‘loans’

One doesn’t like to think that a scammer can lurk within one’s own family, but stories of grown-up kids milking their parents for money are everywhere. In these cases, emotional manipulation is usually the method that is employed.

It’s one thing if the parents decide to give of their own accord – to all their children – and quite another if they are regularly pressurised by one of them to part with cash. Grandchildren are often used as pawns in this little scheme. There is often a vague pretence that the money will be paid back, but it very seldom materialises.

Some grown-up kids feel entitled to this money, and will feign helplessness and manufacture disaster to get their parents to pay up. It can even go further and lead to elder abuse if the parents don’t pay up fast enough. But this can go both ways – there are cases of parents pressurising their adult children to give them money as well.


Source: Fin24

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