Video:Spot Financial Hoaxes

Transcript:Spot Financial Hoaxes

Fame and fortune, millions in cash and prizes, and making friends here and abroad are all promises you just might find in your email inbox. But frauds and scams are rampant on the internet, and being able to spot these kinds of financial hoaxes is essential to protecting your privacy, your credit, and even your identity.

The internet is increasingly helpful in allowing you to manage your financial life simply and conveniently. Online bank accounts, credit cards, and bill-paying services allow you to be more efficient with your finances, but also leaves you open to inadvertently sharing private information. Financial hoaxes take many different forms––some are relatively innocuous, but others can dupe you out of your hard-earned savings if you're not careful.

Promises of Free Goods are Typically Scams

Tip One: As a general rule, any unsolicited email, call, fax, or other communication you receive that promises something for free, either has a catch or is downright fraudulent. Unfortunately, this means if you're planning on getting a thousand bucks from Bill Gates or a free computer from Ericsson, or anywhere for that matter, just for forwarding on an e-mail to ten of your friends, you might not want to bank on that.

Ignore Requests for Financial Assistance

Tip Two: Never respond to emails asking for financial assistance of any kind from anyone, and never send cash anywhere for any reason. Even if the request is from a friend, be sure to call and verify that your friend's e-mail account hasn't been hacked by scammer. I know, I know, helping out a Nigerian minister with questionable grammar skills by sending funds overseas might seem like the right thing to do, but trust me on this one.

Avoid Phishing Scams

Tip Three: Watch out for what are known as phishing scams, which request login, password, or other personal information such as name, address, or phone numbers. These can be tricky because at a glance they often appear legitimate, if not entirely identical, to trusted sites. Whenever you're in doubt, call or login through a number or website that you initiate, and know for sure is valid.

Protect Your Personal Information

And while we're at it, never give out your social security number to a source you don't trust. Even the CEO of that identity theft protection company that posts his social in his ads has had his stolen. 13 times, in fact. So stay smart, and be extra skeptical when it comes to minding your finances online.

I'm Jonathon Stewart with About.com.