Tips to Spot and Outsmart Scammers
Fraud is everywhere these days, and it’s getting trickier to spot. There are a variety of scams, and some are surprisingly convincing!
Attempts to separate you from your money often involve “phishing” – tricking you into providing confidential information. Scammers can masquerade as a financial institution such as your bank or broker to collect your account credentials. This allows them to gain access to your accounts. Financial institutions are aware of these fraudulent practices and will not send you unsolicited texts or emails with links to follow. If you receive one, it is most likely a scam.
In another type of fraud, scammers may “accidentally” text you and then apologize and attempt to build a friendship or romance. After a while they will claim to need money urgently for a medical emergency or offer you a business opportunity. They’ll often ask for the money in cryptocurrency, making it very hard for the victim to get it back once they realize it’s a scam. In fake investment scams, they might even show fake returns for a while to get you to invest even more, before disappearing with your money.
Another particularly distressing type of scam plays on our fear of running afoul of government and law enforcement. For example, you might get a phone call from someone pretending to be from the IRS, saying you owe back taxes and need to pay right away—or else you'll be arrested. Or they may pretend to be a police officer calling with urgent demands to pay a delinquent ticket or fine for missed jury duty. Tip - the IRS and court systems will always send a letter. They will never call you.
Here are some red flags to watch for that may indicate attempted fraud:
Unsolicited contact from a stranger or previous acquaintance via email, text, or social media
Pressure to act quickly to avoid arrest, expense, or missing an opportunity
Requests for unusual payment methods such as cryptocurrency or gift cards
Spelling or grammar mistakes in emails supposedly from financial institutions or other companies
Email addresses that do not reflect the institution
Calls or links requesting you “verify” your personal information
You can avoid becoming a victim of fraud by staying alert and implementing these best practices in account security:
Use strong, unique passwords and set up multi-factor authentication whenever possible. (Use an encrypted application like Bitwarden or Keeper to track your passwords.)
Check your bank, brokerage, and credit card statements often and set up alerts for new activity.
Never click on unsolicited links which can lead to fake websites or introduce viruses into your computer. Type in the website name yourself – and check your spelling as typos can also lead to fake websites!
Never provide personal information to unsolicited callers. Tell the caller that you will hang up and call back using the phone numbers provided on a known website, statement, or the back of your credit card.
Talk to kids and parents/grandparents about these schemes. Kids can be tech-savvy but naive and the elderly are often targeted and vulnerable to scams. Freezing credit with the three credit bureaus is also an easy way to prevent fraudsters from opening unauthorized accounts for you or family members.
Your best defense is your common sense. If something sounds to “phishy” it probably is!
This article is for informational and educational purposes only and should not be considered investment, financial, legal, or tax advice. It is not a recommendation for purchase or sale of any security or investment advisory services. Please consult your own legal, financial, and tax professionals to determine what may be appropriate for you. Our full disclaimer may be found HERE.
