How To Recognize, Identify & Avoid Financial Scams
A Helpful Guide for Keeping Your Money Safe
Recognizing Different Types of Scams
Let’s take a look at common types of scams to understand what they are and how they work.
The process of attempting to acquire sensitive information such as usernames, passwords, and credit card details by masquerading as a trustworthy source. Emails claiming to be from popular social sites, banks, auction sites, or IT admins are commonly used to lure the unsuspecting public.
A type of malware that denies access to a computer system or the files on that system by encrypting (scrambling) the files until a ransom has been paid and then only decrypting (descrambling) the files after payment.
Debt Collection Scams
When someone poses as an agent for a debt collection agency and tries to convince victims to pay a debt that may or may not have already been paid off.
Fraud has been an unfortunate byproduct of legitimate dating sites. While these sites have brought thousands of couples together, they have also given rise to romance scams where users pretend to have an interest in someone when all they really want is their money. Often times, these will take place over a period of time, giving the scammer an opportunity to build trust with their victim before asking for money.
People are generally (and obviously) more willing to give money to someone they know and trust as opposed to a stranger. That’s why scammers will often pretend to be someone close to their victim, convincing them to lower their guard and send money without asking questions.
Tricking or deceiving computer systems or other computer users. This is typically done by hiding one’s identity or faking the identity of another user on the internet. Email spoofing involves sending messages from a fake email address or faking the email address of another user. Since people are much more likely to read a message from an address they know, hackers will often spoof addresses to trick the recipient into taking an action they would not normally take.
When someone obtains sensitive personal information (e.g., social security number, drivers license number, address, etc.) and uses it to pose as that individual to participate in fraudulent activity. This usually involves opening up credit cards and taking out loans leaving the victim with a large financial burden.
A scam requiring victims to either pay a fee or provide sensitive personal information to receive a free prize. Scammers rely on the victim’s excitement of winning to lower their guard and provide the information requested to claim the prize.
Scammers like to prey on people’s emotions — that’s why they will pose as a representative for a real or fictitious charity trying to get victims to make a donation. While the victim thinks they are contributing to a good cause, they are actually giving their money directly to the scammer.
Tips For Protecting You & Your Money
Use these tips and best practices to recognize scams in the moment and keep your money safe.
Keep yourself up to date on the latest trends so you can be prepared if / when a scam presents itself.
Use A Password Manager
Use one of the many password management apps to create, store and safely access all your passwords.
Use online banking tools to create account alerts and get notified instantly when a transaction matches your criteria.
If something sounds too good to be true, it probably is — be cautious when interacting with unsolicited calls and emails.
Protect Your Personal Info
Only provide personal information to trusted sources and only when it is truly needed to fulfill a request initiated by you.
Check For Authenticity
If you receive a suspicious email, carefully check the spelling of the email address to confirm it came from a legitimate source.
Monitor Your Credit
Help fight identify theft by checking your credit report regularly to know when new accounts are opened under your name.
Do Your Own Research
Don’t fall victim to fraud by giving into pressure on an unsolicited call. Take your time to research the opportunity before making any decisions.
Get in the habit of asking questions. If someone gives you an answer that isn’t clear, don’t be afraid to ask again to get clarification.