Unfortunately, identity theft is a pervasive issue in today’s world, and scammers are constantly seeking out unsuspecting victims. However, by being vigilant and aware of common red flags, you can significantly reduce your risk of falling prey to these malicious schemes
Read on to see the more common financial fraud scams so you can be prepared and not become a victim.
Key Warning Signs
Identity thieves often employ several tactics at the beginning of their schemes to lure victims. Here are some warning signs to watch for.
- Unexpected requests for personal information: Be careful of unsolicited calls, emails, or text messages asking for sensitive data like your address, Social Security number, financial details, or passwords.
- Unusual account activity: Keep a close eye on your financial accounts for any unauthorized transactions or suspicious activity. If you notice anything unusual, don’t hesitate to immediately report it to your bank or credit card company.
- Phishing attempts: Phishing scams often involve emails or messages that appear to be from legitimate sources, but contain malicious links or attachments. Be wary of any communication that urges you to click on links or download files from unknown senders.
- Unexpected bills or statements: If you receive bills or statements for services or products you didn’t purchase, don’t pay them and investigate the matter promptly.
- Changes to your credit report: Regularly check your credit report for any unauthorized accounts or inquiries. If you notice anything unusual, dispute it with the credit reporting agencies.
By staying informed and being careful, you can protect yourself from financial fraud and maintain your financial security.
8 Common Financial Fraud Scams
Now that you know the warning signs, here are the more common scams thieves will run on unsuspecting consumers.
1. Lottery Surprise: You’ve Won!
If you receive an unexpected notification about winning a lottery or contest you didn’t participate in, accompanied by a check, it’s likely a scam. These scammers often request that you deposit the check and wire back a portion of the funds to cover taxes.
However, the check is counterfeit, and once your bank discovers this, you’ll be held responsible for the funds. You may face overdraft fees if you spend the money, and there’s no guarantee of recovering your funds.
What to do: If you get a letter and a check like this, you should feel confident about just shredding it. If you are unsure, bring it to your trusted financial institution and talk to a representative to explain your hesitation. They will help you determine if it is fraudulent and keep you from losing money.
2. They Want Gift Cards as Payment.
A common gift card scam involves individuals posing as representatives of government agencies like the IRS, FBI, or Justice Department, demanding payment of back taxes using gift cards.
However, scammers can assume any identity, including a family member or police officer. It’s important to remember that no legitimate government agency or individual will ever request payment via gift cards.
What to do: Hang up the phone. Ignore the email. Definitely don’t send a gift card.
3. Tech Support is Calling You.
Be cautious of unsolicited calls from individuals claiming to be from a tech support company or even Microsoft, reporting a problem with your computer. If the offer seems too good to be true, it likely is. Unless you initiated contact with a trusted tech company and were expecting a return call, such calls are highly suspicious and could be scams.
What to do: Hang up. Do not give them any personal or payment information, and especially don’t give them the computer information they are asking for. They can use that to remotely control your computer, plant a virus, or steal all the information you have saved. Take note of the phone number and the name of the company they claim to be from. Then report the incident to your local police.
4. Your Financial Institution Forgets How to Spell Its Name.
Text messages, emails, and even letters claiming to be from your bank or credit union asking you to take action are common scams. The first clue that this is a phishing scam is that the name of your financial institution isn’t mentioned and it simply says “your bank” or they spell the name incorrectly. If you use a credit union and they say “bank” that’s not right.
What to do: Don’t call them or send them money. If you are concerned, call your financial institution at the usual number, not the new one provided. Take a screenshot of the text message or email or make a note of the phone number and report it to local authorities.
5. Your Elderly Friend Or Relative Starts Talking About People Calling Them For Money.
It’s a sad truth that elderly people are often targets for identity thieves and especially phone scams. We need to look out for the elderly people in our lives.
What to do: If you suspect a friend or relative has been a victim of financial fraud, talk to them and gather as much information as possible. Help them cancel compromised credit cards and report the incident to their financial institutions and local authorities. Offer to help them obtain a copy of their credit report or accompany them to a trusted resource for a credit review. Suggest they add their number to the National Do Not Call Registry and advise them to be wary of calls from unfamiliar numbers.
6. An Online Romance
Romance scammers often target unsuspecting individuals with promises of love and companionship. They often live far away, promise to meet, but never do. Instead, they often request money for unexpected emergencies, such as medical bills or legal troubles. These requests are usually for wire transfers or gift cards. Once you stop giving, they may suddenly disappear.
What to do: Don’t wire or give money to online acquaintances. Victims often end up in debt and emotionally hurt. Take your time in online relationships and don’t hesitate to investigate.
7. Would You Like to Donate?
Charity scams can vary in complexity, from individual fraudsters to well-organized non-profit organizations. Regardless of the scale, these scams divert donations away from their intended beneficiaries and into the pockets of scammers. A common tactic is phishing, where scammers create websites or emails that look like legitimate charities.
What to do: Research any organization before deciding to donate and look for the Employer Identification Number (EIN) on the nonprofit’s website to ensure the money is going to the right place and everything is legal.
8. Be Careful What You Scan
Since the COVID-19 pandemic, QR codes have experienced a resurgence in popularity. From restaurant menus to parking payments, businesses are increasingly adopting QR codes for convenience and efficiency. Additionally, companies often include QR codes with products to encourage customer reviews.
Unfortunately, scammers have taken notice of this trend. QR code scams can take various forms, including mysterious packages containing unordered items, “free product” offers in exchange for reviews, and even fraudulent parking meter payments. Scammers are also sometimes placing them on top of legitimate QR codes in public places.
Once you scan the bad code, you’re taken to a spoof page asking for credentials, or you may experience a ‘drive-by’ download where a malicious software download is initiated.
What to do: Always check a QR code before you scan it. See if it looks tampered with or if the colors don’t look right. If you didn’t order anything, don’t scan the code.
Always Trust Your Intuition
No matter what the situation is, if it seems sketchy to you, don’t give out any payment of personal information. You can always contact the company that claims to be contacting you directly through a trusted phone number and verify that they don’t need anything from you.
Don’t let anyone push you into sharing information you don’t want to share. Making people nervous is how scammers trick people into sharing information they normally would not.
For more information on avoiding financial fraud, visit Diamond’s Financial Security & Safety page.
