These days it’s practically impossible to live a totally “unplugged” life, and truly, why would you want to? The internet makes many everyday tasks like shopping and banking much faster and more convenient. But the internet, with all its benefits, is also a virtual playground for fraudsters who are looking for opportunities to trick you out of your money or personal information, and the stakes have never felt higher. So how DO we identify a scam, and what can we do to protect ourselves in a financial fraud situation?
How to Protect Yourself from Financial Scams
There are several different types of scams, but the objective for all is generally one of three things:
- To convince you to send money
- To persuade you to provide access to your personal passwords or identifiers
- To trick you into giving away your financial information
There are several different ways scammers attempt this. Let’s take a closer look at some of the most common scams.
- IRS Scams – If someone calls unexpectedly claiming he or she is with the IRS and threatens consequences if you don’t pay immediately, it’s a criminal calling. The IRS will contact you about debts or penalties through the mail, not the phone, and won’t demand immediate payment through a money card, gift card, or wire transfer.
- Tech Support Scams – A caller claiming that somehow your computer has been identified as the source of a virus, and he or she can fix it by allowing the caller to remotely access your computer in exchange for immediate payment by phone. This could result in your computer’s data getting damaged or destroyed, not to mention the money, or personal information that can be lost in the process.
- “Grandparent” Scams – A frantic caller trying to convince you that he or she is a relative, government official, or even a defense lawyer, claiming that there’s been an accident or emergency that requires immediate payment over the phone to “right” the situation. No matter how bad or legitimate it may sound, take the time you need to check out what’s very likely a phony story. Ask personal questions that only your loved one would know and try to contact the family member they are referencing, or even your local law enforcement to help sort the situation.
- Lottery Scams – These scams, commonly referred to as “advance fee”, “lottery” or “sweepstake” scams, often begin with fraudsters telling the victim they’ve won a lottery or sweepstake raffle. The consumer is issued a check worth more than the amount owed and instructed to pay taxes before receiving a lump sum payment.
Now that we’ve reviewed some of the most common types of scams, let’s discuss best practices to avoid becoming the victim of a clever scammer.
- Monitor your debit and credit card activity – Scammers may use your debit or credit card number to make unauthorized purchases. Keep a close eye on your account by registering your card with a monitoring service like ShazamBolt$. This app allows you to receive transaction alerts for potential suspicious activity and temporarily block future purchases in the event that your card is misplaced.
- Never “Pay to Play”- There is no legitimate reason for someone who is giving you money to send more than the exact amount awarded or to require you to wire money back to them. If either of these are a stipulation for the reward, that’s a red flag it’s a scam.
- Verify the requestor before you wire or issue a check – It is important to know who you are sending money to before you send it. Just because someone contacted you doesn’t mean they are a trusted source.
- Don’t be fooled by the appearance of a check - Scam artists are using sophisticated technology to create credible-looking counterfeit checks. The company may be real, but someone could have forged the checks without their knowledge.
- Ensure a check has “cleared” to be most safe – Under federal law, banks must make deposited funds available quickly, but just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier's check or money order. Be sure to ask if the check has cleared, not merely if the funds are available before you decide to spend the money.
- Report any suspected fraud to your bank immediately – Bank staff are experts in spotting fraudulent checks. If you think someone is trying to pull a fake check scam, don’t deposit it, report it. Contact Frontier Bank right away if you suspect fraud.
Keeping your money and identity safe from financial scams can feel complicated and overwhelming. When in doubt, subscribe to the following “4 Be’s” and you’ll greatly reduce your risk of becoming a victim.
- Be Suspicious – Government agencies will never call you out of the blue to let you know that you owe money or to verify your personal information.
- Be Protective – Guard your personal information closely. If someone calls you asking for Social Security numbers, bank account numbers, your address or any other personal data, it’s best to assume you’re speaking to a fraudster.
- Be Proactive – If you are concerned that the call is not legitimate, you should always call the agency directly. You may also want to do a quick online search using the name of the agency and scam to see if others have reported similar calls.
- Be Calm – Fraudsters will attempt to panic you into making a quick, uninformed decision. Stay calm and don’t let yourself be rushed. If the caller threatens you in any way, hang up and call your local law enforcement.
Customer Service Representative