Protecting Yourself from Financial Scams
Financial scams are increasingly sophisticated and target everyone—students, professionals, caregivers, and retirees. The best defense is awareness, simple protective habits, and knowing what to do if something goes wrong. This guide covers common scams, warning signs, prevention tips, and steps to take if you suspect fraud.
Common Scams to Watch Out For
Phishing, Smishing, Vishing
- Looks like: Emails, texts, or calls from “banks,” delivery services, or government agencies urging you to verify accounts or claim refunds.
- How it works: Links lead to fake sites; attachments install malware; callers pressure you for codes or money.
- What to do: Do not click links or open attachments. Verify via official websites or numbers on your card. Enable two-factor authentication.
Too-Good-to-Be-True Investments
- Looks like: Guaranteed high returns, secret strategies, urgent deadlines.
- How it works: Fake sites, testimonials, jargon; Ponzi or crypto schemes.
- What to do: Be skeptical of guarantees. Verify registration (FINRA BrokerCheck, SEC IAPD). Consult a trusted financial professional.
Tech Support Pop-Ups
- Looks like: Alerts claiming your computer is infected, asking for remote access.
- How it works: Scammers install malware or demand payment.
- What to do: Close browser, run security software, contact legitimate support.
Romance & Social Media Scams
- Looks like: Online relationships followed by urgent money requests.
- How it works: Emotional manipulation builds trust.
- What to do: Never send money to someone you haven’t met. Reverse-image search photos. Consult family or advisors.
Government/Bank Imposters
- Looks like: Calls claiming to be IRS, Social Security, or your bank, demanding payment or info.
- How it works: Caller ID spoofing and fear tactics.
- What to do: Hang up. Call official numbers. Report the incident.
Red Flags
- Urgency or threats—legitimate institutions rarely demand instant action.
- Requests for sensitive info (passwords, SSN, PIN) via email/text/call.
- Unusual payment methods (gift cards, wire transfers, crypto).
- Unexpected links or attachments; mismatched sender addresses.
- Guaranteed or risk-free investment returns.
Prevention Tips
- Enable Two-Factor Authentication: Adds a second layer of security. Use authenticator apps over SMS.
- Use Strong Passwords & Managers: Avoid reuse; let managers generate and store passwords.
- Keep Devices Updated: Turn on automatic updates for OS, browsers, and security software.
- Secure Networks: Change default router passwords; use WPA2/WPA3; avoid financial logins on public Wi-Fi or use a VPN.
- Guard Personal Info: Limit sharing birthdays, addresses, pet names. Shred sensitive mail.
- Financial Hygiene: Turn on account alerts; check credit reports; consider fraud alerts or credit freezes.
If You Suspect Fraud
- Stop communication; do not send money or share codes.
- Secure accounts: change passwords, enable 2FA, log out of other sessions.
- Contact financial institutions immediately.
- Place fraud alert or credit freeze with credit bureaus.
- Scan devices; update software.
- Report to FTC (reportfraud.ftc.gov), IdentityTheft.gov, FBI IC3 (ic3.gov).
- Document emails, texts, screenshots, and transaction details.
Special Guidance
- Teens & Young Adults: Beware job offers requiring upfront fees or check deposits. Lock down social profiles.
- Working Professionals: Verify wire instructions via known phone numbers. Use 2FA on email and financial apps.
- Caregivers & Families: Set up alerts for elderly relatives; create a family scam password.
- Retirees: Be cautious of high-pressure investment pitches and unsolicited offers.
Quick Checklist
- Is there urgency or a threat?
- Am I being asked for sensitive info?
- Is payment requested via gift card, wire, or crypto?
- Did the message come from an unfamiliar address?
- Is the offer guaranteed or risk-free?
- Have I verified through official channels?
Together, we can work to keep you on-track toward your financial goals.
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Read more articles by Trevor Carroll