As much as everyone would like to believe they’re immune to financial scams, fraudsters are sophisticated and use tactics you might not expect to steal your data and money.
“Scammers are always trying to find new ways to lure victims and find ways to steal money or personal information and they use all means possible, including technology innovation,” Darius Kingsley, managing director and head of consumer business practices at Chase Bank, said in an email.
It’s not always as obvious as a mysterious Nigerian prince in your email inbox — financial scams can take many forms and require vigilance to avoid.
“What’s important is to stay alert and informed and as consumers, know what are ways to protect our information, accounts and money,” Kingsley said.
Financial Scams to Look Out For
The most dangerous part of a financial scam is that you might not recognize it until your data has been compromised. Chris Roberts, a consumer class action attorney with Butsch Roberts & Associates in St. Louis, said in an email that financial scams over the phone are prevalent and tricky.
“A common scam that I see is for the caller to say they are from the IRS, the Social Security Administration or a variety of outfits the caller is not actually calling from. These callers usually try to get sensitive information such as Social Security numbers or bank account information,” Roberts said.
Other scams to beware of include:
— Pretending to be from a familiar company: “Scammers will pretend to be from a reputable company, bank, or delivery service to warn you about issues with your account or order. They will request the victim to verify their information to resolve the issue, tricking them into sharing their personal or financial information,” Kingsley said.
— Romance scams: In the age of online dating, not all prospective matches can be trusted. According to Kingsley, online romance scams establish a relationship only to request money or propose an investment opportunity.
— AI scams: Artificial intelligence is becoming more sophisticated and it’s able to replicate familiar voices. These deepfakes can trick fraud victims into thinking a trusted party is requesting money.
[How Consumers Can Protect Themselves Against AI Voice Cloning Attacks]
— Fake merchandise: Not everything you purchase online is what you think you’re getting. “Victims will order event tickets or purchase items from online auctions, marketplaces, or social media, but receive nothing or fake tickets,” Kingsley said.
— Real estate scams: A fraudster can always benefit from encouraging victims to avoid reputable websites and work with them directly. One example of this is real estate fraud — a scammer convinces a buyer to send deposits for home purchases or vacation rentals directly to the seller. “In doing so, the victim loses the support and recourse offered by the legitimate platform,” Kingsley said.
— Check fraud: Check fraud is a well-known financial scam, but that doesn’t make it any less easy to fall for. This kind of scam is on the rise and often part of large, organized criminal efforts.
How to Protect Yourself From Financial Scams
“Fraud and scams can target anyone, and consumer education and awareness are some of the best defenses,” Kingsley said.
Beyond knowing which financial scams to keep an eye out for, here are five strategies consumers can employ to protect their money and information.
[READ: How Safe Are Budget Tracking Apps and Software?]
1. Be Skeptical of Unsolicited Communications
While not impossible, it’s uncommon for you to get a communication from a bank, government agency, retailer or other institution asking for your financial information if you’re not expecting to hear from them.
“Whether it’s an email, phone call or text message, be wary of unsolicited communication asking for personal or financial information,” Justin Stivers, an investment advisor and founding attorney at Stivers Law in Coral Gables, Florida, said in an email.
He added that if you’re concerned, you can verify the authenticity of the request by reaching out to that person through their officially listed information.
“Do not use the contact information provided in the suspicious message; instead, look up the organization’s contact information independently,” Stivers said.
2. Secure Personal Information
There are many great tools available for ensuring the personal and financial information you have stored is secure. Identity theft protection services and strong passwords, for example, can help keep your sensitive information safe from cyberattacks.
[READ: Best Identity Theft Protection Services of April 2024]
“Install reputable antivirus and antimalware software on your devices and keep them updated regularly. Scammers may attempt to gain access to your devices through malware or phishing attempts,” Stivers said.
3. Check Links Before Clicking
“Phishing emails often look like legitimate organizations and ask you to click on a link or download an attachment,” Stivers said. He suggested hovering over links before clicking on them so you can verify the URL is secure and matches the sender.
4. Be Cautious With Investments
If an investment opportunity seems too good to be true, it might be. Any entity promising you the opportunity to get rich quickly or urgently requesting funds should be considered with caution.
“Research the investment and the individual or company offering it thoroughly and be skeptical of unsolicited investment offers or pressure to act quickly,” Stivers said.
5. Monitor Your Accounts
By keeping a close eye on your bank accounts, credit reports and other online accounts that contain your personal information, you can spot any unusual activity as soon as it happens and report it. The sooner you can take action, the fewer consequences you might have to face.
Reporting Financial Scams
If you do fall victim to a financial scam, it is important to report it to the proper authorities to protect your information and others.
“You may consider reporting the incident to the FTC at ftc.gov/complaint,” Kingsley said.
If your bank account or credit card information is stolen, you’ll want to report it to that particular financial institution. The same goes for fake communications from any company.
“If you receive a suspicious communication claiming to be from the IRS, report it to the IRS directly,” Stivers said.
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How to Avoid Financial Scams originally appeared on usnews.com
