You receive a phone call (or email) letting you know that you're entitled to thousands of dollars as part a credit card class-action lawsuit settlement. But, to receive your part of the settlement, you first have to pay taxes or legal fees on your portion of the money. After you mail or wire the money as instructed, you never receive a settlement and your money is long gone.
How to Avoid It:
Though there are legitimate class-action lawsuits, you recognize scams.
- Class-action members are seldom called about a settlement. You're more likely to be contacted by mail or email.
- Settlement amounts are typically low, definitely not in the thousands.
- Settlements are generally mailed directly to you or credited to your account.
- You won't have to pay any fees to receive your settlement.
- The scammer may mention real businesses, but ask for the specific name of the lawsuit and look it up on the internet. You'll probably find the settlement is fake. If not, look for real instructions on how to receive your benefit.
When It Happens to You:
If you receive such a call, do not send any money, no matter how legal and legitimate it sounds. Instead, get as much information as you can and report the call to the Federal Trade Commission and your state's Attorney General. Even if the agencies can't catch the scammer, they can put out warnings to keep other consumers from being taken advantage of.