The top ten scariest scams!

It's Halloween tonight, so here are ten frightening financial fiddles to make your blood run cold!

Once again, Halloween is here, when children (and some adults) will dress up in spine-chilling outfits before going 'trick or treating'. 

To get you in the mood to be seriously scared, I've come up with ten financial scams to turn your hair white and make your blood run cold.

Here are my ten wallet-killers (in A-Z order):

1. Advance-fee fraud

When it comes to scams, advance-fee fraud is probably the oldest and most well-established confidence trick.

It's also one of the simplest: the conman asks you for money upfront and promises to hand you a much larger sum. One of the most common examples is the 'Nigerian 419' scam.

This involves an email - allegedly from a corrupt official or banker - offering you a share of a huge windfall in return for your help in smuggling these millions out of Nigeria or another country. After handing over various handling fees, bribes and customs duties, you sit back and await your £5 million.

Of course, this reward never arrives, leaving you hugely out of pocket.

2. Bogus lotteries

This variation on advance-fee fraud starts with you receiving an email, fax or call informing you that you've won a major prize in a foreign lottery. In order to bag your treasure, you need to hand over fees to cover assorted administration and customs charges, insurance and taxes.

Of course, this is pure fantasy, as you don't win a lottery without first buying a ticket.

Also, genuine lotteries don't ask for any money upfront other than the ticket price. Unfortunately, lottery crooks usually target older people: four in five victims of this fraud are over 65.

Thus, if granny mentions that she's won a major lottery prize, make sure that it's coming from Camelot and not a fake lottery.

3. Boiler rooms

Getting involved with a 'boiler room' share scam can lose you your life savings.

As with most scams, the boiler-room swindle is quite simple: scammers call or email investors to promote 'hot stocks' which they claim will prove to be the deal of a lifetime.

These must-have shares turn out to be worthless pieces of paper, offering ownership of imaginary, worthless or loss-making firms. Instead of earning bumper returns, boiler-room victims often lose every penny.

Surprisingly, many of those duped by boiler rooms are experienced investors, often with 20+ years of share-dealing behind them. Find out more in The scam that won't die.

4. Cashback fraud

This swindle (known as criminal cashback) works because cheques take longer to clear than electronic bank transfers.

It usually starts when you advertise something for sale, such as a car. A buyer agrees to pay your asking price, but sends you a cheque or banker's draft for a larger sum.

He then asks you to bank his cheque and send him a money transfer for the difference.

Sure enough, his cheque bounces a few days after your instantaneous money transfer has left your account. You're now out of pocket, often to the tune of £1,000 or more, and looking for a bogus buyer who's scarpered.

5. Gambling syndicates

If you want to get taken for a ride, then pay to join a gambling syndicate which offers tips to help you beat the bookies.

Forking out for daily or weekly predictions for horse-racing or football results, or buying betting software, is simply throwing your money away.

Needless to say, there is no sure-fire way of beating the bookies, although feel free to buy shares in Ladbrokes or William Hill if you want to benefit from betting...

6. Land banking

This simple swindle involves selling small plots of land to property-obsessed Brits. Land-banking firms claim that the value of this land will rocket when it is sold to developers after planning permission is obtained.

Sounds feasible, right?

Sadly, investors soon find that all their £5,000+ has bought is a patch of a field in the middle of nowhere. Often, their square of grass is in a green-belt area and has zero chance of being built on or developed.

One notorious land-banker, United Kingdom Land Investments, was closed down by the FSA in June 2008, with 4,500 buyers nursing losses approaching £69 million.

7. 'Make a Million' seminars

There are more 'get rich quick' schemes being advertised in the UK than you can shake a stick at. Typically, these seminars promise massive returns thanks to a fool-proof (but secret) way to buy shares or property.

These 'become a millionaire' schemes can indeed make you seriously rich, but only if you are selling them.

One infamous example is Inside Track, which dangled the dream of massive wealth to be made from buy-to-let investing. Inside Track's initial presentations were free, but its inner secrets were available only by paying £2,495 for a follow-up workshop.

As the property market started to tank in the summer 2007, Inside Track duly followed suit, going into administration in April 2008.

8. Phishing

Crooks send billions of spam emails with the intention of phishing: stealing your online banking details. Often, these unwanted messages pose as official messages from your bank or another financial organisation.

If you are conned into handing over your banking details and passwords, then spammers will use this information to hack into your online accounts and steal every penny.

So, don't open bogus emails and never click on their links. Instead, keep an eye on your Internet security. Find out more in Eight ways to spot a phishing scam.

9. Ponzi

In December 2008, Bernard Madoff made headlines all over the world when it was revealed that his apparently successful hedge fund was, in fact, a Ponzi scheme. Since the mid-Nineties, Madoff had been collecting money from new investors and using this money to pay bogus returns to his existing investors.

Pyramid schemes of this kind are often known as Ponzi schemes, after an American swindler named Charles Ponzi who claimed to use postal coupons in order to turn $100 into $150 within 45 days.

When his scheme was exposed as a con trick in 1920, Ponzi's victims lost millions of dollars and he went to jail.

10. Timeshare scams

The timeshare market - buying holiday weeks in overseas properties - enjoys a reputation for sharp practices and hard selling.

This isn't helped by the huge number of frauds involving timeshares, often singling out British victims and carried out in Mediterranean countries, especially Spain.

In most cases, these timeshare tricks are just advance-fee fraud: conning people out of upfront fees in return for phony promises to find a buyer for timeshares. Naturally, once you've handed over your finder's fee, broker and buyer vanish and you've thrown good money after bad.

If these scams haven't raised the hairs on the back of your neck, then you're clearly a smart cookie, so well done!

This is a classic article that was updated in 2011.

More: Top five worst festive scams | How to spot a scam