June 15, 2024

Assuming that you’re too clever to fall prey to a financial scam can be one of the biggest blunders in shielding yourself from such threats.

“Everyone is susceptible — any of us could be deceived by a scam under the precise conditions,” declares Eva Velasquez, president, and CEO of the Identity Theft Resource Center, an organization dedicated to providing guidance and support related to identity theft. One of the first steps towards self-protection is acknowledging this reality, she adds.

John Breyault, vice president of public policy, telecommunications, and fraud at the National Consumers League, an advocacy group that voices out consumer problems, states, “Complaints come from a variety of victims ranging from highly educated individuals with considerable income to the most susceptible members of our society.”

While, as Breyault admits, there is no “absolutely fail-safe method to stay immune from all scams,” there are tactics you can adopt to minimize your vulnerability. Here are four prominent ones:

Terminate the call and ‘make a direct connection’

In case you’re approached by someone pretending to be your bank or a similar company, cut the call and personally dial the organization’s verifiable number, advises Velasquez. “We consistently advise, ‘If you didn’t initiate the interaction, then you need to make a direct connection,’” she adds.

Otherwise, you have no clue who you’re talking with, she says, because scammers have the ability to disguise the number appearing on your caller ID as authentic.

Sometimes, it may be best to visit your bank personally for confirmation. Thorn Roberts, a small business owner in Elizabeth, West Virginia, made such a visit when he received an unidentifiable payment request.

He remembers, “They immediately identified it as a scam.” Consequently, he swiftly closed his accounts and established new ones. Thanks to his prompt action and the bank’s assistance, his money was preserved.

Safeguard and monitor your accounts

Basic virtual security measures can also be beneficial in your protection, suggests Velasquez. She encourages the use of multifactor authentication on your fiscal accounts, creating distinct passwords and avoiding the sharing personal information such as your date of birth on the internet.

Jason Zirkle, training director at the Association of Certified Fraud Examiners and a former fraud analyst with law enforcement, advises checking your financial accounts at least once a week and immediately examining any unrecognized charges. A single small mistaken charge could imply someone has access to your account, indicating the onset of a larger issue.

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Become acquainted with prevalent scams

The Federal Trade Commission notes that the leading scams of 2023 involved duping business and government institutions, online trading issues, and fictitious sweepstakes.

Zirkle explains, “You don’t require expertise in each one, but you need to recognize the distinguishing features of most scams: They contact you initially, lure you with some sort of incentive, and instill a sense of urgency,”. Following that, they request either money or personal details to access your funds.

These are some common scams you should be aware of.

Impersonation scams

Impersonation scams transpire when individuals feign to be someone else to gain your trust and steal personal information or money. Common tactics involve posing as a government official, charitable organization, or another dependable entity.

Additional impersonation scams involve pretending to be a relative, like a grandchild calling a grandparent in distress pleading for money to extricate themselves from a fraudulent situation. Panic and urgency are employed to make you relinquish money rapidly.

Mobile Payment Scams

Mobile payment platforms like Venmo, PayPal, and Zelle are common tools for transacting money using a smartphone. However, scammers have also exploited these platforms to steal funds. Fraudsters may impersonate a loved one needing assistance and request you to forward money, sell you a product they never intend to deliver, or claim you have been awarded a prize and insist on payment to receive it.

Job Fraud

In the midst of a job hunt? Be wary of employment fraud, which is rampant on popular online job search databases like LinkedIn. The fraudster disguises themselves as a recruiter from a recognized, often large company (hoping that a prominent name will deceive you with immediate credibility). You may undergo several interviews before receiving a job offer.

The imposter is seeking your financial information — Social Security number, bank account, driver’s license — for identity theft. They may even schedule an orientation meeting to ask for personal details under the pretense of completing tax paperwork. If you feel suspicious, dial the company using a number you searched for (not one provided by the recruiter) to verify your candidacy or the existence of the job.

Your social security number’s significance makes it appealing to fraudsters. If you receive a call suggesting your social security number or benefits have been put on hold or that you owe funds, proceed with caution as it may well be a trick.

The Social Security Administration has offered a series of ‘P’s as helpful reminders: pretend, problem, prize, pressure, and payment. A scam artist may masquerade as a social security office worker and could even use a genuine employee’s designation. They may claim there’s an issue with your account or that you’ve been awarded a prize. The fraudster will urge you to act swiftly and pay in a peculiar fashion.

Medicare fraud

Fraudsters can use Medicare numbers, just like Social Security numbers, to make phony claims for prescription medicines and healthcare services. Scammers often communicate with consumers by phone pretending to represent Medicare. If you’re informed that your account needs to be switched, you’re eligible for a refund, you received complimentary services and goods, or you’re up for an upgrade, chances are it’s fraudulent.

Tax trickerys

Crooks exploit people’s dread of issues with the IRS, often imitating an agent or collector, and requesting a payment. Bear in mind, the IRS initiate contact via U.S. post; finding out about an issue via a call, text, email, or social media message is a clear sign of a tax scam.

Investment frauds

An investment opportunity that claims you’ll make fast money without risk might actually be an investment hoax. Be alert to offers of free initial training on real estate, cryptocurrency, and precious metals. You may be tricked into paying hefty fees to continue, and the information might be basic and worthless.

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Reporting deception and advocating for yourself

Reporting scams to government agencies and private entities aids in improved fraud monitoring. While a centralized source for fraud tracking doesn’t exist, you have multiple options for reporting a scam. Choose from options like the Federal Trade Commission, your state attorney general’s office, the FBI, your local police station, your bank’s fraud department, the Better Business Bureau’s Scam Tracker and the Identity Theft Resource Center.

🤓Nerdy Tip

FTC accepts scam and identity theft complaints via phone or online in multiple languages like Spanish, Mandarin, Tagalog, Vietnamese, French, Arabic, Korean, Russian, Portuguese, and Polish. They also provide consumer education in several languages.

Majority of scam victims do not recover their lost money, but Zirkle recommends “playing your own advocate” with your bank and local police. In some instances, your bank or police can assist you in reclaiming some or all of your lost funds.

This article was originally crafted by NerdWallet and debuted by The Associated Press.