Recognizing Common Financial Scams and Ways to Avoid Them

At times, it might feel like everyone is trying to get in touch with you—whether it’s a message from your bank, a call about an urgent issue with your account, or an email saying you’ve won a prize. Unfortunately, many of these messages aren’t what they seem. They’re often created to trick you into sharing personal information or handing over money. Such scams are currently on the rise, with older people often becoming the victims.

Knowing how to recognize these threats and learning some awareness tips can help protect your finances and identity.

Common Types of Financial Scams

Sweepstakes and Lottery Scams

In this type of scam, you might get a phone call with exciting news – you’ve supposedly won a lottery or a massive prize. But to claim your money, you will be asked to send money up front. This amount can sometimes add up to thousands of dollars. To build trust, fraudsters may impersonate well-known sweepstakes organizations such as the Publishers Clearing House. The truth is, there is no real prize, and sadly, some people keep losing money for years after falling prey to this scam for the first time.

The “imposter scam,” as it is commonly known, doesn’t just come from sweepstakes or lottery companies. Scammers may also call or mail, pretending to be government officials or representatives from schools or other institutions. Their goal is to get money or sensitive information from you.

Tech Support Scams

One common way scammers try to trick you is by calling, emailing, or texting about a supposed problem with your computer. They pretend to be from a well-known software company. While reaching out, they may request remote access to your computer to “repair the issue.”

Sometimes, these scammers may also contact you, claiming that you are owed a refund for a tech subscription. Ultimately, they will request your card information or digital banking details to dupe you and take your money. It is important to note that genuine tech companies will never call you out of the blue to repair your computer or ask for payment by gift cards or wire transfers. If you get such a call or message, it’s best to hang up or delete it.

Fake Check Scam

Here, a scammer will give you a fake check to deposit before asking you to send them their money back for various reasons. Sometimes, they may pretend to be a potential “employer” and send you money to set up your home office. They might then ask you to send some of that money back to them using a payment app or gift cards. But the check they gave you is fake. When the bank finds out, the money you sent back is lost.

Another way scammers may trick you is through online sales. For instance, someone might buy something from you and “accidentally” send a check for more than the price. Next, they will ask you to send back the extra money using a payment app or another digital method. That check is fake, and you end up losing the money you sent back.

These scams work because fake checks often look very real, even to bank staff. It can take weeks before anyone realizes the check isn’t valid. By then, the scammers have already taken their money and disappeared. The safest choice is to never send money or gift cards based on a check until you’re completely sure the money has cleared and is truly yours.

Phishing email scams and social engineering attacks are similar to the other scams listed here.

Signs That You Are Being Scammed

Once you know the different kinds of scams, it’s easier to spot the telltale signs that someone might be trying to trick you.

• Often, scam emails come from a private address like mark.penn@gmail.com instead of a company’s official email. These emails sometimes have spelling mistakes or poor grammar.
• Scammers usually have daily targets, so they might sound pushy or strong over the phone or email to quickly obtain your personal information.
• They also create fake websites that look authentic but with slightly changed web addresses—for example, Go0gle.com instead of Google.com. These small changes mean the site is fake.
• You might get a link asking you to click and share your information. It’s safest not to click links in emails from people or addresses you don’t know or trust.
• On social media, scammers might try to connect with you by pretending to be a long-lost friend, a debt collector, or an agency representative. After gaining your trust, they may ask for sensitive information. Always be careful with the people you meet online this way.

Ways to Safeguard Yourself From Online and Phone Scams

A number of tips can come in handy to protect your financial information or personal data from phone and online-based scams.

Never Divulge Sensitive Information on the Phone or Online

Banks or government agencies will never call, email, or message you unexpectedly to ask for personal details. They will not request things like your name, email address, or information about your social media accounts. You should also never share your social security number, one-time passwords (OTPs), postal address, bank account number, or credit and debit card numbers by phone, email, or any online chat. If someone does ask for your private information this way, the safest thing is not to respond or share anything. Instead, reach out directly to your bank or the agency using a number or website you know is official.

Online shopping scams often involve victims having to divulge sensitive information, such as card details and home addresses. Purchasing from reputable sites and following safety measures can protect you from online shopping scams.

Alert Law Enforcement About Suspicious Interactions

If you ever get a phone call or message that seems suspicious, especially from someone who asks for details about your finances or private information, avoid sharing anything. Tell someone you trust and report the scam. Reporting such scams makes a difference and helps keep you and others safe.

Use Expense Tracking Apps

Such apps help you keep track of where your money is going, how many times cash has been debited from your account, and your monthly expenditure. Having this data helps you detect fraud immediately when money is taken from your account. Expense-tracking apps also help keep your spending in check when you travel or during festive shopping.