How to Protect Yourself From Scams and Fraud

Imagine looking at your bank account and seeing a large amount of your hard-earned money just gone. Unfortunately, frauds and scams are a growing occurrence both online and offline. These types of crimes use deception to gain the trust of a victim and then cheat them out of something, typically money. Thankfully, there are ways to counteract these unjust deceptions. Just as we lock the door of our home, there are plenty of ways to protect yourself from becoming a victim.

Follow this helpful guide to educate yourself on the most common types of scams, what red flags to watch out for and what to do if you suspect that you have been a target of fraud.

What are the most common types of scams? 

The first step to protecting yourself against scammers is to understand what the most common types of scams and frauds are. With this knowledge in hand, we can better recognize the scam in time and act accordingly before we fall into the trap. Keep in mind that scams are ever changing, however the following are the most commonly seen and reported.

  • Fake check scams. This type of scam involves someone you don’t know sending you a check that appears to be authentic with an amount of money on it. The scammer will often say that they are overpaying you for some sort of reason and will request that a specific amount of funds from the check be sent back (or paid to someone) once you cash the check with your bank. In many instances, the funds are immediately available to you and you are able to send whatever agreed upon amount back to the scammer. However, after a few days, the bank will detect that the check is indeed illegitimate and will subtract the total amount of the check deposit from your bank account balance.
  • Tech support scams. Also known as an anti-virus scam, this type of scam involves individuals posing as tech support from well-known anti-virus or software companies. The scammers will then call their victims and report that one of their electronic devices has a dangerous virus or technical issue. Next, they ask the victim to pay a small fee using a form of payment that can’t be reversed, such as a gift card, money transfer app or money wire. Another method they may use is through fake pop-up warnings that appear on the victim’s electronic device. The warning tells the victim that a virus has been detected and that they must call the tech support number provided. In reality, these are pop-up ads disguised as virus warnings. Over the past several years, tech support scams have become more prevalent as more people around the world are able to connect to the Internet.
  • Fake emergency scams. This type of fraud involves scammers calling or texting individuals and posing as a family member or close friend. They claim to have some kind of major emergency (hospitalization, crashing a vehicle or being arrested) and need money quickly to resolve the issue. As with the previous scam, the scammer will ask for money that is hard to return, such as cryptocurrency, a wire transfer or a reloadable gift card. This scam involves playing with their victim’s emotions and trying to trick you before you realize that they are not who they say they are. 
  • IRS scams. In IRS scams or “tax scams”, scammers pose as representatives from the Internal Revenue Service (IRS) and state that the victim owes money to the IRS or needs to verify their identification. This can be done via phone call, email, mail or even text messages. They will insist that the victim needs to make a payment immediately (through a wire transfer or prepaid debit card) or else the victim will face severe consequences with the government.
  • Romance scams. Also known as “catfishing”, romance scams involve scammers creating fake identities using stolen photos to establish romantic relationships with their victims. Instead of love, their true goal is to get the victim to send them money. Scammers typically claim to be living or traveling outside of the United States and spend weeks or even months making their victims fall in love with them and gaining their trust. Eventually, the catfish will say they need money for some reason and will ask the victim to transfer money to them.
Keep in mind: Many scammers often try to take advantage of immigrants needing to change their legal status.

Four red flags to help identify scams

Now that you are familiar with the most common strategies used by scammers, it’s important to recognize these four common red flags, as identified by the Federal Trade Commision (FTC).

  1. Scammers contact you saying you won a PRIZE or have a PROBLEM. What do both of these situations have in common? They provoke an emotion from the victim and make them feel a certain degree of urgency. If you are contacted by someone with this type of scenario, it’s best to stay calm and verify all the information they give you before taking action or making a payment.
  2. They POSE as representatives or employees of a trusted business or government organization. Whenever you receive a call from a company or government agency, make sure the person you are speaking with is actually an employee of the said institution. Before making any sort of payment or providing your personal information, contact the actual organization or company yourself using the contact number from the organization or company’s official website, not the number the scammer gives you. For example, if the scammer claims to be from Microsoft, search online for the company’s customer service line on their official website and dial that number. Be sure to verify all the information the scammer gives you before making a payment or providing personal information.
  3. They try to instill a sense of urgency and PRESSURE the victim to act immediately. Scammers know that their chances of completing the scam diminish the longer you take to think things through. For this reason, they try to pressure you and push for a payment as soon as possible. Never make a payment or transfer money if you feel pressured to do so. Always try to seek a second opinion from someone you trust before making any decisions. 
  4. It’s common for scammers to use UNCONVENTIONAL means of payment. Although many scams are made through bank transfers, debit or credit cards, most scammers prefer to use means of payments that have weaker security measures. Some of the most common payment methods they ask for are money transfers through companies like Western Union, MoneyGram or reloadable gift cards.

What do I do if I’ve been a victim of a scam?

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If you suspect that you or someone you know is the victim of fraud, follow these recommended steps: 

  1. Stay calm. We understand that feeling betrayed is difficult, but anger can seriously affect our ability to reason. Staying calm will help make the next steps easier, faster and most importantly, increase your likelihood of getting your money back.  
  2. Report the incident to the company or bank used as a means of payment. The FTC suggests that your first action should be to contact the financial institution or company used to make the payment and let them know that the transaction is fraudulent. If the transaction was made from a checking or savings account, contact your bank immediately. If you used a money transfer service (like MoneyGram or Western Union), contact the company directly. The faster you contact the company, the more likely the business will remain in possession of the funds and stop the transaction from processing. 
  3. Report the incident to the FTC. The United States Federal Trade Commission (FTC) uses scam reports as evidence to pursue scammers, to detect trends in this criminal activity, and to develop strategies focused on preventing future scams. Click the link  here to report a fraud or scam incident to the FTC.
  4. Report the scam to any other institution involved. It’s important to contact every institution involved or mentioned in the scam. For example, if someone poses as a tax agent, the IRS must be notified immediately. Using this Federal Government page, you’ll find a complete list of the common scams and frauds and a list of the institutions you can file complaints with. 

Fraud is a reality that we have to live with, however staying informed and recognizing these important signs is crucial to keeping your personal information and money safe. It’s important to remember that taking action against scammers is the best way to protect yourself and help prevent others from being victims in the future.

If you have any questions about the information shared today, feel free to contact our experts at SABEResPODER! We are here to help you.