Financial Wisdom

How to Spot a Scam – A Guide (Part 1)

If it’s too good to be true, it probably is.

Never invest anything upfront.

You’ve heard these lines all before, but for one reason or another you still cling to that hope that THIS time it will all work out. THIS time, the offer is real, and it will get you out of your difficult situation or awful job.

Days (or weeks) later, you feel like a fool. “How could I fall for this again?” You feel weak-minded or silly. You really thought that this was going to be a real way to make money. Now you are back where you started, often poorer than before, and feeling really sheepish.

For those who are sick of the 9-to-5 rat race grind and are trying to escape their dreadful day jobs, many of these online “work from home” and “make money while sleeping” scams can be especially appealing. They are also appealing for anyone who is trying to make extra cash (and really, who isn’t?) without much effort. This is precisely why so many people fall for these scams. Scammers know what your motivations are, and they play to them. They know you are trying to make a lot of money for little effort. They know you want to escape from the rat race. They know you want a way to escape your debt. They take advantage of your desires.

How can you tell if you are being scammed though? Below is a great 2-part guide that will help you out. The first part (this one) will help you identify scams and online deals that are too good to be true. The 2nd will give you some real-life examples of scams, show why they are so appealing, and why they don’t (and can’t) deliver as promised.

It is my hope that if you are ever tempted by some great money-making offer online and are about to pour your heart and soul (and, heaven forbid, your time and money) into it, that instead you remember what you read here and instead return to The Great Office Escape for a reality check. You are always welcome here 🙂

True Signs of a Scam

910929_transamerica_tower1. It resembles a pyramid in ANY WAY. Basically, the pyramid model of a business is mathematically unsustainable unless you are at the very top. Chances are good that once you have heard about it, it’s too late to get to that point no matter what you do. I will go into this in more detail in part 2. If you see some kind of multi-level marketing plan that is available to the public online, it’s already “hit the presses” so to speak, and rising to the top where you’d make any serious kind of money is as close to impossible as you can get.

Here is a good example of a recently popular scam that is a pyramid/MLM structure. This scammer is GOOD too. He’s managed to clog up all the search engines for “reverse funnel” to the point where most of the press for the system is positive. Any negative reviews get filtered down and buried, so people are more likely to think it’s legitimate. Take it from me, investing money in this system is like throwing it away.

2. It is full of typos/incorrect grammar. Scammers often don’t bother with things like proper grammar because they are out there for one purpose: to steal your money. A legitimate business will carefully check it’s advertisements to make sure it’s presenting it’s product and information in the best possible manner. The Nigerian inheritance scam is often so badly written that it’s difficult to make any sense of.

“I pleased to make business you acquaintence, Mr. Jonhson.”

Please. If you see anything like that, run for the hills.

3. It requires little or no effort on your part. This is THE MOST IMPORTANT fact off all of them. If the message states anywhere that you can sit at home and barely do any work while making ridiculous amounts of money (ridiculous means anything above what you would expect to make stuffing envelopes all day with a temp agency) for nothing, then it’s a scam.

As much as you will not want to hear the following message, it needs to be said: earning money is HARD WORK. There is NO way to earn copious amounts of cash online (or anywhere, really) without some effort. NONE. NADA. ZERO. You have to be willing to put forth many, many hours, sometimes late at night for a long time to see any realistic kind of payoff when starting a business from scratch. This holds true for online businesses as well. Real entrepreneurs know and understand this, but they love what they do and are willing to work hard for their freedom.

Those are just the facts, and the sooner you accept them as the truth, the sooner you’ll NEVER BE SCAMMED AGAIN. This is why I am so good at spotting scams. I have accepted this rule (and I didn’t always accept that one had to work hard to be successful in my younger days!)

Here is a good example. It’s actually possible to make a living by blogging, but it’s HARD work. This blog does not pay my bills. It is fairly popular now, but if I was planning on living on the earnings it generates for me I will have to increase my traffic by 5000% and MAINTAIN it. That’s realism for you. That’s how difficult it truly is.

And don’t get me wrong, I love my blog and have been working hard on it for months, but I don’t do it for the money. I blog because I love to write and to help people. I hope that this post will resonate with my readers and save them some money and time.

Remember: earning a lot of money requires WORK. Don’t be afraid of it. You’ll never escape your miserable day job without being prepared to work hard for it.

4. You are asked for any sensitive information. This includes the following:

  • Your Social Security Number (giving this out is like an invitation to have your identity stolen)
  • Your date of birth
  • The names/numbers of people you know
  • Any credit card numbers (unless you are making a purchase at a secure online store)
  • Your home address (this is generally ok if the offer in question is asking you to apply for a job, but still use caution)
  • Your home telephone number (this can be sold to companies who will then call you incessantly and try to sell you unrelated products)

Really, this is just common sense.

Simple Ways to To See if Something is an Online Scam

Enter the name of the website in question into a search engine in quotes and then add the word “scam.”

Here is an example: Let’s say that you want to find out if is a scam site (it is.) Enter “” into the searchbar and then enter “scam”. In google, the 9th item down on the list showed a message board where one unlucky user was scammed by the site. Make sure to view the site with the “cache” option to make the information easier to spot.

This method is fantastic and effective. You might have to hunt a bit, but it’s worth it if you need convincing. 2 such warnings are always enough.

This doesn’t always work because the content often gets filtered by the authors so that only positive reviews of the scam or site are on top.

There is another method, of course: just don’t sign up for it. If you have any doubt whatsoever, that something is not legitimate you can rest easier to know that you are probably right to avoid it. A person should always trust their intuition when it comes to something like this. Intuition is a wonderful thing. Listen to yours.

Check out How to Spot a Scam – A Guide (Part 2) where I explore the science behind scamming and why some people repeatedly fall hook, line and sinker for scams!



  • Scott Jackson December 5, 2007 at 5:40 pm

    Just wanted to say, I laughed a bit when I heard about all the terrible weather up there, which turned into 2 inches of snow here.. you were complaining you wanted to leave because of the bad weather! Well I guess we don’t have mudslides or hurricane force winds.


  • sarah December 6, 2007 at 3:23 pm

    Hi Mike
    Never was a truer word spoken about the hard work aspect of building a business. It’s so important to have realistic expectations when trying to escape the rat race, it really doesn’t happen overnight. I’m a massive fan of baby steps, then more baby steps and then a few more baby steps. They all add up! Great post.


  • Mike December 7, 2007 at 1:28 am

    Scott, I love the weather up here – yeah it got windy for a few days but it was also like 65 degrees for 24 hours straight. It’s still in the mid 40’s even at night.

    I have always been put off by how much scammers prey on people’s desires for instant gratification. It’s one of humanities’ greatest failings, and will get a person into trouble in and out of the business world. Thanks, sarah!


  • Scott Jackson December 11, 2007 at 7:55 pm



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