How do I protect myself from a scam if I want to help a relative?
"For some reason can't transfer it directly to his account overseas (something to do with security codes, authorized payees and expired cards). Don't become someone's financial intermediary. Find out exactly why he can't transfer the money himself, and then if you want to help him, solve that problem for him. Helping him fix his issue with his expired card, or whatever the real problem is, would be a good thing to do. Allowing him to involve you in the transaction, would be a bad thing to do.  Possible problems which might be caused by becoming directly involved in the transaction: -The relative is being scammed themselves, and doesn't realize it / doesn't realize the risks, and either wants you to take the risk, or simply thinks there is no risk but needs administrative help. -The person contacting you is not the relative - perhaps they are faking that person's identity, and are using your trust to defraud you. -The person is committing some form of fraud, money laundering, or worse, and is directly trying to defraud you in order to keep their hands clean. -The transaction may be perfectly legal, but is considered taxable in one or more countries. By getting involved, you might face tax filing obligations, or even tax payment obligations. -The transaction may be perfectly legal and legitimate, but might accidentally get picked up as potential fraud by a financial monitoring system, causing the funds to be held, and your account to be flagged for further investigation, creating headaches for you until it becomes resolved. There are possibly other ways that this can go awry, but these are the biggest possibilities I can think of. The only possible 'good' outcome here is that everything goes smoothly, and it works exactly as well as if your relative's ""administrative problems"" were solved first, and the money went through his own account. Handwaving about why your account is needed and his is faulty is a big red flag. If it is truly just an administrative issue on his end, help him fix that issue instead." "What can I do to help him out, but at the same time protect myself from any potential scams? Find out why he can't do this himself.  Whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself.  If you can find a way to solve that issue without involving your bank account, so much the better. Don't settle for ""something about authorized payees and expired cards.""  Get details, write them down.  If possible, get documents.  Then go to a bank or financial adviser you can trust and run those details by them to see what they have to say.  Even if there's no scam, if what he's trying to do is illegal (even if he doesn't realize it himself) then you want to know before you get involved.  You say you're willing to deal with ""other issues"" separately, but keep in mind that, even if there's no external scam here, those ""other issues"" could include hefty fees, censures on your own account, or jail time. Ask yourself: Does it make sense that this relative has an account overseas?  I don't have any overseas accounts, because I don't do business in other countries.  Is your relative a dual-citizen?  Does he travel a lot?  What country is the overseas account in?  How long has he had this account?  What bank is it with?  Where the money is going is just as important as how it gets there (ie: through your account.)  Arguably more so. Keep in mind that many scammers tell their marks not to share what's going on with anyone else.  (Because doing so increases the odds of someone telling them to snap out of it.)  It's entirely possible he's being scammed himself and just not telling you the whole story because the 419er is telling him to keep it quiet.  (Check out that link for more details on common scams that your relative may be unwittingly part of, btw.) Get as many details as possible about what he's doing and why.  If he's communicating with anyone else regarding this transfer, find out who.  If there are emails, ask his permission to read them and watch for anything suspicious (ie: people who can't spell their own name consistently, constant pressure to act quickly, etc.)" "Let's summarize your relative's problem: How is this possible? If both of those statements are true, then he should be able to explain exactly why those statements are true, and then you can explain it to us, and then we can all nod our heads and admit, ""Wow, that makes sense. Proceed if you want to."" But until that happens I suggest you take the advice I offered in the first paragraph of this answer." Since you mentioned that it is your close relative, he has never done enything dodgy and is wise with his money, then I would take it that you have some implicit trust in him. Now your options in this case are limited to either saying an outright no, which may impact familial ties adversely or to do as he has requested. One way could be to ask him for a mail requesting a short term loan and then transfer the money to his account. Then after a few days/weeks he repays the money back to your account. Now, this may or may not be 100% black & white depending on the legalities of your country but in most countries/cultures giving and taking of personal loans between friends/families is quite common. "Mostly ditto to @grade'eh'bacon, but let me add a couple of comments: Before I did anything, I'd find out more about what's going on. Anytime someone tells me that there's a problem with ""security codes or something"", I get cautious. Think about what the possibilities are here. Your relative is being scammed. In that case, helping him to transfer his money to the scammer is not the kind of help you really want to give. Despite your firm belief in your relative's integrity, he may have been seduced by the dark side. If he's doing something illegal, I'd be very careful about getting involved. My friends and relatives don't ask me to commit crimes for them, especially not in a way that leaves me holding the bag if things go wrong. Assuming that what is going on here is all legal and ethical, still there is the possibility that you could be making yourself liable for taxes, fees, whatever. At the very least I'd want to know what those are up front. As @Grade'eh'bacon, if he really has a problem with a lost password or expired account, by all means help him fix that problem. But become someone else's financial intermediary has many possible pitfalls."
Since you ask.... How do I do it? My frugality doesn't come from budgeting or even half so much from keeping money away from myself (though mostly-one-way retirement accounts help). It's a matter of world-view. Spending and shopping for things you don't need is a vice. Limit your indulgence in it. I've also made wasteful purchases in my life. When I find myself considering buying something that I don't really need, I ask myself whether it will end up like... like the stupid eyeglass cleaner gadget from the Sharper Image that I used twice. Or the Bluetooth earpiece that spent 98% of its time lost and .02% of its time in my ear. Or the little Sony VAIO laptop which was great on the train, but probably cost 8 times as much as an EeePC and didn't do way too much more. (In my defense on that one, it was just before netbooks were really taking off... but I still felt bad about it the next year). I've also got two savings goals. The first is responsible and very big (financial stability: a year's expenses plus money for a down payment on a house. a California house. in a good neighborhood.) The second is personal and just medium-big (a large musical instrument). I've decided not to spend money on the second until I'm financially stable and I have enough money to take care of the first... so that makes me more willing to scrimp and save to pursue the first than I would be otherwise. Advice for others? Ask yourself: Why are you buying that thing? You can survive without it, can't you? You didn't need it a week ago, did you? Does the old one have holes in it or something? Or will you at least use it regularly, for years? Why aren't you buying the cheaper kind? Or buying it used? One reason why they limit it is to protect you. If I hack your account, I get your entire financial history. I can see a copy of every check you ever wrote. I can see the account number with every doctor, utility, and credit card. I can also see the account information on the back of those checks for all your relatives who you sent $10 for their birthday.  I can use the information in those accounts to see where you used to live, this allows me to spoof you when applying for new credit. If they ask if I ever lived on Main street in Anytown USA. I can confidently say yes. If I only let you download a window of time, the responsibility is on you to protect that data that is before the window. They protect it in file isolated from the internet, and finally only in archive locations. Some of the information doesn't exists in electronic form. Data from the 1990's and earlier may not exist in the form you want. They have been expanding the windows over time. I can see/download a pdf of my monthly statement going back 7 years. Of course that data can't go directly into quicken. Some places do let you get a file that goes back farther, but they charge you for it, and it can only be done by them sending you the file. That prevents you from downloading your entire  history everyday. That times 70 Million customers would overwhelm their server and other infrastructure. Regarding the amount of data: "Thirty thousand in credit card debt is a ""big elephant to eat"" so to speak.  But you do it by taking a bite at a time.  One positive is that you do not want to borrow from your 401K.  Doing so is a horrible idea. The first question you have to ask yourself and understand, is how you accumulated 30K in credit card debt in the first place?  Most people get there by running up a relatively small amount, say 5K, and playing the zero transfer game a few times.  Then add in a late payment, and a negative event or two (like the car breaking down or a trip to the emergency room) and poof a large amount of credit card debt.   Obviously, I have no idea if this is how you got there, and providing some insight might help.   Also, your age, approximate income, and other debts might also help provide more insight.  I assume you are still working and under age 59.5 as you are talking about borrowing from your 401K. Where I come from is that my wife (then girlfriend) found ourselves under stifling debt a few years ago.  When we married, we became very intentional and focused on ridding ourselves of debt and now sit completely debt free (including the house).  During our debt payoff time, we lived off of less than 25% of our salary.  We both took extra jobs when we were able.  Intensity was our key.     If I were you, I would not refi the house.  There are costs associated with this and why would you put more debt on your home? I might cash out the annuity provided that there are no negative tax consequences and depending on how much you can get for it.  Numbers are the key here.  However, I feel like doing so will not retire this debt. The first thing you need to do is get on a written budget.  A game plan for spending and stick to it.  If you are married, your spouse has to be part of this process.  The budget has to be fresh each month, and each month you and your wife should meet.  To deviate from the budget, you will also need to have a meeting.  My wife and I still do this despite being debt free and enjoying very healthy incomes. Secondly, it is about cutting expenses.  Cable: off.  No eating out or vacations.  Cut back on cell phone plans, only basic clothing.  Gift giving is of the $5 variety and only for those very close to you.  Forget lattes, etc.  Depending on your income I would cut 401K contributions to zero or only up to the company match (if your household income is above 150K/year). Third, it is about earning more.  Ebay, deliver pizzas, cut grass, overtime, whatever.   All extra dollars go to credit card balance reduction.  At a minimum, you should find an extra $1000/month; however, I would shoot for 2K.  If you can find 2K, you will be done with this in 13 months.  I know the math doesn't work out for that, but once you get momentum, you find more. How good will it feel to be out from under this oppression next March?  I know you can do this without cashing in the annuity or refinancing.  Do you believe it?" The title of your question basically asks: What can I do? And you state this regarding the meeting and “advice” they gave towards criticism of their method: While this they also indoctrinated that you should avoid talking to   people talking bad about it (or say it is scam) because you gain no   money from them and they just want to destroy your business. First, you really cannot do anything to “save” your friend if they have bought this nonsense. You are right, it’s a scam. But past stating as such to your friend, there is not much you can do past shielding yourself. The reality is this: Any scenario you are in where you cannot ask basic questions and get a reasonable response or are given—at least—the option to walk away unscathed or uninsulated is basically a cult-like mentality. Simple as that. If the first thing someone tells you is “Don’t listen to others, just listen to me…” then you need to excuse yourself to go to the bathroom or something and just leave. From my personal experience meeting people who are successful and have power, they always—and I mean always—ask questions and are critical of things they invest in… Whether that investment is time, money or just basic mental energy. Rich people are just like you and me! Except they have more money so they can take bigger risks. Critical thinking and the ability to walk away from something are key life skills. Now others have talked salesman psychology which is on point. But here is something else you brought up in your question: He also wants to use his position as respected member of multiple   local youth and other communities to get their members as referals or   in his words “…to give them the oppurtunity to also simply earn   money.” Okay, so you can set personal boundaries between you and this clown, but you cannot stop him. But if he plans on targeting people and organizations in your community, you can warn them about him and his behavior and this scam. Chances are other people will know right away it’s a scam, but honestly if you feel the need to help others, that’s the most reasonable thing you can do to help them. But whatever you do, don’t take any of this emotional crap personally. If anything, maybe you can learn some reverse salesman techniques to get this “friend” to disengage. Such as only meeting with them in public and if they say something really vile to you, repeating what they said back to them as a question… Maybe even louder so everyone can hear. Remember a harsh reality of life: Public shaming can work to change someone’s behavior but you never want to do something like that unless you have utterly no choice. That last bit of advice is pretty harsh, but the reality is at some point you need to do something to “smack” reality into the situation. "If your meaning of ""asset protection"" is buying gold and canned food in the name of a Nevada LLC because some radio guy said so, bad idea. For a person, if you have assets, buy appropriate liability limits with your homeowner/renter insurance policy or purchase an ""umbrella"" liability policy. This type of insurance is cheap. If you don't have assets, it may not be worth the cost of insuring yourself beyond the default limits on your renter's or homeowner's policy. If you have a business, you need to talk to your insurance agent about what coverage is appropriate for the business as a whole vs. you personally. You also need to talk to your attorney about how to conduct yourself so that your business interests are separated from your personal interests." "Government registering of financial institutions usually is to make the government safe (eg FINTRAC is watching for money laundering and financing terrorism) rather than to make it's customers safe.  Most governments have many levels of registrations and regulatory bodies. The most stringent requirements are usually obligatory only for banks, and they indeed often include precautions for insuring customer's deposits. Even this insurances have limits, eg in most EU countries the state guarantees deposits up to 100kEUR. If you deposit more and the bank flops - you lose everything over the limit. Companies like forex or currency exchanges usually make their best effort to avoid as many regulations as possible, just because it's costly. If a given company does have guarantee funds and/or customer insurance, it should be advertised and explained on their website. However the whole issue of trust is misguiding. You don't have to ""trust"" in your grocery store to shop there. There is no government guarantee that the vegetables sold will be tasty. If you buy and the product fells short of your expectations, you call it a loss and start shopping elsewhere. Financial services are no different than any other product. I recommend to your aunt to start small and see how it works. If a service turns out well, she can increase the amount sent through exchange and decrease amount sent through bank. But still, it's always prudent to send eg $1000 every week instead of $4000 once a month. It's more time consuming and cumbersome than having your bank do it - but it's the safety and convenience you're paying premium for." "Bad plan. This seems like a recipe for having your money taken away from you by CBP.  Let me explain the biases which make it so.  US banking is reliable enough for the common citizen, that everyone simply uses banks.  To elaborate, Americans who are unbanked either can't produce simple identity paperwork; or they got an account but then got blacklisted for overdrawing it. These are problems of the poor, not millionaires.  Outside of determined ""off the grid"" folks with political reasons to not be in the banking and credit systsm, anyone with money uses the banking system.  Who's not a criminal, anyway.  We also have strong laws against money laundering: turning cash (of questionable origin) into ""sanitized"" cash on deposit in a bank.  The most obvious trick is deposit $5000/day for 200 days. Nope, that's Structuring: yeah, we have a word for that.  A guy with $1 million cash, it is presumed he has no choice: he can't convert it into a bank deposit, as in this problem - note where she says she can't launder it.  If it's normal for people in your country to haul around cash, due to a defective banking system, you're not the only one with that problem, and nearby there'll be a country with a good banking system who understands your situation.  Deposit it there.  Then retain a US lawyer who specializes in this, and follow his advice about moving the money to the US via funds transfer. Even then, you may have some explaining to do; but far less than with cash.  (And keep in mind for those politically motivated off-the-financial-grid types, they're a bit crazy but definitely not stupid, live a cash life everyday, and know the law better than anybody. They would definitely consider using banks and funds transfers for the border crossing proper, because of Customs.  Then they'll turn it into cash domestically and close the accounts.)" Absolute scam.  Any time anyone asks you to open a bank account so they can send you money and then you have to send some portion of it back to them, it's a guarantee that it's a scam. What happens is that your dad will deposit the check and transfer it to this woman, then the check will bounce (or turn out to be fake altogether) and your dad will be on the hook for the money to the bank. These schemes are dependent on the fact that people want hope and believe in quick, easy money, and it works as long as the con artists are able to get the 'mark' (the person who deposits the check and sends them the money) to send the money before the check (always drawn on some obscure foreign bank) has a chance to clear. This is another variation of a long-running type of bank scam, and if you get involved, you'll regret it.  I hope you can keep your dad from getting involved, because it will create a financial mess and affect his credit as well. The basic premise of this scam is this:  In the interests of providing good customer service, most banks will make some or all of a deposit available right away, even though the check hasn't cleared.  The scammer has you withdraw the money (either a cashier's check, have you send a wire transfer, etc) immediately and send it to them. Eventually the check is returned because it is  The bank charges the check back against your account, often imposing pretty substantial penalties and fees, so you as the account holder are left without the money you sent the scammer and all of the fees. This is the easy version of events.  You could end up in legal trouble, depending on the nature of the scam and what they determine your involvement to be.  It will certainly badly affect your banking history (ChexSystems tracks how we all treat bank accounts, much like the credit agencies do with our credit), so you may have trouble opening bank accounts.  So there are many consequences to this to think about, and it's why you JUST SAY NO!! Don't walk away from this -- RUN!!!