Are You Scam Bait?
You may think you know what the bad guys are up to, and that they'd never con you, but are you sure? Test your fraud savvy with this quiz
By Jill Andresky Fraser

(MONEY Magazine) – Every year an estimated 25 million people, or one out of every 10 Americans, are the victims of consumer fraud. Their collective losses: some $40 billion from telemarketing scams alone. Widespread use of the Internet is helping to fuel new, increasingly sophisticated types of cons, and the number of dollars at stake is growing too. "There's a scam for everyone, and that means everyone is a potential victim," warns Susan Grant, director of the National Fraud Information Center run by the National Consumers League. To make sure you don't get taken for a costly ride, fill out the quiz below to bone up on the most common scams and the best ways to protect yourself and your family.

Test Your Scam IQ

1 You're most likely to become the victim of fraud if you belong to which demographic group?

a. Internet users b. People over 50 c. Low-income families d. High-income families

2. According to the most recent government survey, which type of scam now lures the most victims?

a. Work-from-home deals b. Buyers clubs c. Prize promotions d. Credit-related scams

3 Identity thieves often use phishing scams to steal personal information. What is phishing?

a. Hacking into secure payment sites to get names, addresses and credit-card numbers of online shoppers b. Combing through garbage for discarded credit-card offers and receipts c. Sending e-mails that direct recipients to official-looking websites that ask for personal information d. Spyware that allows users to steal PINs and other sensitive data

4 Which of the following common telemarketing scams is likely to cost you the most money?

a. Lottery clubs b. Discount travel deals c. Sweepstakes offers d. Work-from-home plans

5 What is the most effective way to minimize your chances of being a fraud victim?

a. Invest in a shredder, and make good use of it b. Install antivirus software on your computer c. Never pay up front for a promise, however tempting d. Change your e-mail address frequently


1. b Although anyone may be the target of fraud, older Americans (b) are especially vulnerable, particularly to telemarketing scams, notes Shirley Rooker, president of Call for Action, a nonprofit consumer help line. In fact, half of all telemarketing fraud victims are 50 or older. "Younger people are less likely to be at home to answer the phone," explains Rooker. "And many older people grew up in a more trusting era or may be lonely, so they're less likely to just hang up on callers."

To cut your chances of being a victim of telemarketing fraud, sign up for the National Do Not Call Registry (; 888-382-1222), which will remove your name from most direct-marketing call lists. Three months after signing up, nearly three-quarters of registrants report a sharp decline in calls, making any shady ones that come through seem all the more obvious. Be aware of the most common scams, such as sweepstakes offers promising a hefty prize if you agree to pay up-front handling charges, and offers of a "guaranteed" loan or credit card after you pay an advance fee. Insist on seeing deals in writing, and never give your credit-card number on the spot to an unknown party.

2. d All of these showed up on the list of the top 10 scams reported by the Federal Trade Commission (FTC) last year, but credit-related fraud (d) affected the greatest number of consumers. Guaranteed loan and credit offers that require an advance fee took the top spot, with credit-repair promotions and deals purporting to insure you against charges on a stolen credit card coming in third and fourth, respectively. In the one-year period covered, roughly 10 million Americans were victimized by these credit scams, which often prey upon young people or those with spotty financial histories.

To protect yourself, avoid any credit offer that requires an up-front payment or guarantees to grant you a loan regardless of your past borrowing record. As for credit-card insurance, just say no. Your maximum out-of-pocket expense from a lost or stolen card is $50, which is less than many of these insurance scams charge to fix the problem.

3. c Phishing, which relies on fraudulent websites that mimic the look of legitimate ones (c), is fast becoming the top method used by identity thieves to acquire the information they need. Typically, targets will receive an e-mail or a phone call from what appears to be a legitimate financial services provider, often suggesting there's been suspicious activity on their account and asking for confirmation of, say, their credit-card number or PIN. In the e-mail version of this scam, they'll be provided with a link to a website that looks just like the company's real website, complete with official logos and notices that it's a secured site, then asked to verify sensitive information. "Legitimate institutions won't ask for these kinds of details by phone or e-mail, so don't provide them," warns Jean Ann Fox, director of consumer protection at the Consumer Federation of America.

If you receive a request for personal information by phone or e-mail, before providing any answers, verify the inquiry by calling the customer service number that's listed on your account statement. If you suspect you've been hooked by a phisher and have already provided account numbers, passwords or PINs, notify the financial companies with which you have the accounts and put a "fraud alert" on your files at credit reporting bureaus by contacting the FTC's ID Theft Clearinghouse (; 877-438-4338). For more tips, visit

4. a During the first half of 2004, victims of lottery scams (a), which falsely claim that consumers have won a lottery, lost an average of $5,538, the National Consumers League reports. The next most costly telemarketing scams: fraudulent sweepstakes or prize offers (average loss: $2,458), followed by work-at-home schemes ($2,168). Overall, the price of being a victim is rising sharply, with an average loss of $2,085 for the top 10 telemarketing scams in the first half of 2004 vs. $1,508 in all of 2003.

5. c Never pay up front for an unsolicited phone or e-mail offer until you get the goods (c). You'll also sharply reduce your chances of being taken if you stay informed about the latest scams and how to fight them. For the most up-to-date information, go to the National Fraud Information Center site at or the FTC's site at That said, it wouldn't be a bad idea to pick up a shredder that will purge sensitive documents when you no longer need them. You never know what information prying eyes may be able to find.