Financial fraud and scams seem to be everywhere these days. Scammers are continually enhancing their tactics relying primarily on our daily sources of communication as their initial point of attack. Educating yourself to identify the most common scams and their sources, which are frequently unsolicited emails, phone calls and social media inquiries, is the first step to protect yourself and your loved ones. With awareness and a few preventive measures, you can attempt to stay one step ahead of the scammers.

Phishing Scams

One of the most prevalent scams is the phishing scam. Criminals send fake emails or texts that appear to be from trusted organizations like banks, delivery companies, utilities, or government agencies. These messages often contain a link asking you to verify personal information or asking you to click on an attachment. If in doubt, go directly to the URL of the institution and avoid clicking on the URL link embedded within the email.

Imposter Scams

Impostor scams occur when fraudsters pretend to be a government official or a family member in distress, pressuring you to send money immediately. These scams are communicated through emails, phone calls, letters, text messages, and social media. The messages might ask you to “confirm” or “update” confidential personal financial information, such as bank account numbers. In some cases, they prey on your situation and may offer to help victims of current or previous frauds with an investigation or to recover prior losses.

Impersonating Charities

Donating to charities online is a great way to give, but you should always be cautious. Bad actors can impersonate online charities to try and steal your credentials. Cybercriminals may pretend to work for reputable charities by contacting you by phone, text, or email, asking for donations. They may ask for cash donations, gift cards, or wire transfers, which cannot be traced. The scammers can also ask for sensitive financial information or Social Security numbers so that they can apply for loans using your identity! You should always be cautious when donating online to any charitable organization. It’s important to research and make certain the charity you intend to donate to is reputable before contributing. Most charities use domain names that end in “.org” instead of “.com”. If a fundraiser asks you for sensitive information, such as your Social Security number, it is likely a scam.

What to Look Out For

Identifying scams can be tricky, but there are telltale signs to watch for. One red flag is receiving unsolicited communications that pressure you to act quickly. Scammers often create urgency, warning of dire consequences if you fail to respond. A key word to watch out for is “Urgent”. Don’t panic, take a moment, breathe, and investigate. Hover over the URL to make sure it looks legitimate. If the URL listed in the email is different from the one you see when you hover, this is a red flag.

Requests for payment through untraceable methods like gift cards, cryptocurrency, or wire transfers are another common red flag of scams. No government agency will send unsolicited correspondence asking for money or sensitive personal information. No government agency, mortgage lender or utility company would ask for cash to be brought to a random location or ask you to pay with a gift card, by wiring money, or with digital currency. If it doesn’t sound legitimate, it probably isn’t.

Be suspicious of offers that sound too good to be true. Social media scams often involve selling expensive designer items at extremely low prices. The products can be cheap knock offs, or they deliver nothing at all. Confirm the business independently before transacting with any unknown vendor.

Stay Informed and Be Vigilant

Protecting yourself from fraud begins with staying informed. Always verify the identity of anyone who contacts you out of the blue, especially if they request personal or financial information.

Use strong, unique passwords for your online accounts and enable two-factor authentication wherever possible. Keep your computer and phone software updated to guard against vulnerabilities that scammers can exploit. Additionally, avoid clicking on unfamiliar links or downloading attachments from unknown sources.

To avoid fraud, you can implement measures like: 

• Regularly checking your credit reports
• Designating a trusted contact with your financial institutions, this will enable those institutions to verify important or questionable transactions with you and another trusted party
• Consider establishing a Power of Attorney (POA) with a reliable person
• Educate yourself and loved ones about common scams

Protect Your Personal Financial Information

Never give out your bank account numbers, Social Security numbers, personal identification numbers (PINs), passwords, or other sensitive information unless you initiate the contact.

Keep your checkbook, account statements, and other sensitive information in a safe place. Shred paper documents containing sensitive information that are no longer needed.

If You Are a Victim of Fraud

If you think you have been a victim of fraud, it is essential to document everything you can. Save any correspondence, screenshots, and transaction records as evidence. These documents may be valuable if you need to work with law enforcement or financial institutions to recover your funds or clear your name.

There are many resources available to help you protect yourself and recover if you’re a victim!

Steps to take:

1. Contact the Social Security Administration:
   (SSA) Fraud hotline at (800) 269-0271 if you think someone is using your Social Security number
2. Report to the FTC:
   File a report online at IdentityTheft.gov or call 1-877-438-4338
3. Contact affected companies:
   Reach out to banks, credit card companies, and other businesses where fraudulent activity occurred to report the theft and close compromised accounts.
4. Review your credit reports:
   Obtain a free copy of your credit report from the three major credit agencies to identify any fraudulent activity
5. Consider a credit freeze:
   Consider placing a credit freeze on your credit reports. This prevents new credit from being opened in your name without your authorization.
6. File a police report:
7. For additional steps and information, use FTC IdentityTheft.gov

About Author – Jennifer Scher, CFP®: Jennifer is a Certified Financial Planner® practitioner and comes to FBB with over 15 years of experience in financial services and business development. Jennifer has a passion for guiding clients as their goals and needs evolve with life’s changes. She is committed to helping her clients achieve their objectives so they can enjoy the lives they envision. Jennifer began her career in institutional sales and project management at Morgan Stanley in New York. This was followed by a post working on the international portfolio trading desk with Goldman Sachs. Her most recent Wall Street role was in transition management with JPMorgan. Jennifer is a native of Washington, DC, and holds a Bachelor of Arts Degree from Wesleyan University and a Master of International Business from the University of South Carolina MIBS program. When not at work Jennifer enjoys spending time with her daughter, camping, traveling, and enjoying life.