Up-front payment scams

An upfront payment scam is a scam which asks you to send money upfront for a product or "reward" later. The "reward" may be in the form of a pre-approved loan or credit card application, a prize, a holiday or a cut of a profit from some activity.

You might be asked to provide your bank account details to the scammer or to pay fees to gain access to what the scammer is offering.. If you send money to these scammers you may find that you receive nothing in return, or that you don't get what you expected.

Warning signs

• You receive an unsolicited email, letter or telephone call promising you something exciting or valuable for a small upfront payment or fee.
• You are offered a "reward"such as a prize, a holiday or a pre-approved loan or credit card application.
• The offer involves transferring money for someone else. 
• The scammer will tell you that you need to pay an upfront cost such as, an administration fee, taxes or postage and shipping costs. 
• The offer arrives out of the blue. 
• The "reward" is much greater than the amount that you are asked to pay upfront.

• Use your common sense: the offer may be a scam. 
• Do not send any money or pay any fee to claim a prize or lottery winnings.
• Never send your personal, credit card or online account details through an email.
• Money laundering is a criminal offence: do not agree to transfer money for someone else.

Do your homework

• Use your common sense: the offer may be a scam. 
• Do not send any money or pay any fee to claim a prize or lottery winnings.
• Never send your personal, credit card or online account details through an email.
• Money laundering is a criminal offence: do not agree to transfer money for someone else.

Decide

You should NEVER give out your personal or bank account details to somebody you don't know. Remember that no legitimate credit card or loan provider will ask you to pay a fee to guarantee approval. Don't let the fact that an offer sounds enticing or genuine trick you.

If you think the offer may be genuine, make sure you seek the advice of an independent professional such as a lawyer, accountant or financial planner before committing any money.

Source: www.scamwatch.gov.au