Scams: How to Avoid Losing Money in 2023
Significant cases of financial fraud might seem to be something you’d most likely find in Hollywood. “The Wolf of Wall Street” (on DIRECTV STREAM) is one such example of financial fraud depicted in the movies and based on a true story. However, financial fraud takes many routes and often hits much closer to home.
Such cases may make you think that we’re surrounded by scams. However, being savvy about them and knowing how to protect yourself will go a long way toward keeping your hard-earned money safe.
Types of Scams that Result in Financial Loss
A lot of scams result in financial losses. These scams are not only costly but make it difficult to trust others.
Many scammers get into relationships with people online for the sole purpose of playing on their sympathies. One of the most typical ways these scammers take advantage of their victims is by requesting money for an emergency that never occurred. Some dating scammers find their victims using stolen credentials from dating sites but are more likely to use social media.
Some scammers impersonate bank representatives, asking for your login credentials. Once you provide this information, they will have access to your money or investment products. Correcting the damage caused by such a breach can be very time-consuming.
One of the ways scammers frequently pull off these schemes is by using an email address similar to one your bank might use. Sometimes, they will contact you by phone, pretending to be from your bank and getting information from you through casual conversation.
Another common bank scam is sending a fake check with directions to deposit the check and wire some of the money back. All of these types of scammers will use your banking information themselves or sell it. The worst part of being a victim of one of these scams is that many of these scammers are overseas and difficult to prosecute.
Many scammers pose as legitimate business owners offering jobs that don’t exist. Such scams involve collecting personal information from applicants which is used for fraudulent purposes or resold. Some examples of this fraud involve home business opportunities that are marketed as legitimate jobs.
In a Ponzi scheme, scammers collect money from new investors to pay current clients instead of investing their money as promised. Fraudsters who commit Ponzi schemes will often keep some of the money for their benefit. Some of the most expensive investment-related losses have happened because of Ponzi schemes.
Fake Investment Advisors
Some scammers will falsely inflate the value of a stock, encouraging investors to buy the stock quickly. The scammers sell their holdings to “dump” the stock. One of the worst parts about these scams is that victims are left with relatively little legal recourse.
Business trap scams involve deliberately misleading information that encourages businesses to spend money. Many of these scams involve fraudulent services like directory listings and advanced free fraud. Some services might be legitimate on the surface but come with multiple hidden fees.
Rescue or Charity Scams
Some scammers, especially those with a social media presence, prey on the sympathies of animal lovers by collecting money supposedly for sick, injured, or otherwise endangered animals. Many of these scammers will use photos of animals from other sites to give themselves more supposed legitimacy. Rescue scammers will often join groups on social media sites to find more potential victims.
Fraudsters often set up fake charities after natural disasters or national tragedies like mass shootings. Many are so caught up in their emotions because of the event that they don’t think about the legitimacy of these organizations. Sites like Charity Navigator can help you check out a charity to see if it is legitimate.
How to Protect Yourself from Scams
- Install and activate antivirus and malware software on your computers and mobile devices. Once activated, make sure you’ll receive automatic updates when available. If a virus or malware ends up on your device, make sure you remove the harmful files before you do anything else.
- Always treat links and attachments with healthy skepticism. Even if a link or attachment seems to come from someone you know because email addresses can be hijacked or spoofed easily. Attachments or links might install malware that can harm your computer or hold your files, hostage.
- Sometimes, bad links can encourage you to divulge personal information. These types of scams are common on social media messaging apps. Always be suspicious of links that request your social media credentials.
- Always avoid conducting financial transactions on public Wi-Fi networks. These networks aren’t secure and may compromise your financial information. If you currently lack access to a secure Internet connection, call or text your bank to get your balance.
- Take a minute to calm down and think things through. Some fraudsters call their victims, pretending to be debt collectors and threatening to have you arrested. It is illegal for debt collectors to threaten you with arrest. There will also usually be other red flags, such as claiming to be with a law enforcement agency that does not exist.
- Sometimes, letting a friend know about a suspected scam can help you find out more. Friends or family members well-versed in scam protection can identify a fraud that you cannot. Letting someone else know what happened might also help them avoid getting scammed.
- Research any companies that you interact with to be doubly sure. The Better Business Bureau, for example, includes reviews that may prove helpful. Searching for a company name is an excellent way to find out about the overall reputation.
- Keep your personal information safe by not revealing your identity to unknown people who call you. Only use legitimate customer support numbers provided by financial and other institutions. If a suspected scam number keeps calling you, consider blocking them.
What To Do to Stay Safe When Shopping?
Use a unique password for every site that requires a login. Many scammers get access to sites they would otherwise have no access to because of recycled passwords. Also, make sure the passwords have at least eight characters, with a mixture of upper and lower-case letters, numbers, and special characters.
Only take advantage of offers from trusted sources. Many unsolicited shopping offers come from sites that harvest financial and other personal information. If it looks unprofessional or otherwise suspicious, treat it with caution.
Only provide personal information to trustworthy people. Some of the ways to avoid giving information to the wrong people include:
- Using an email address for logins different from the one you give to friends and family. Email addresses that people use for staying in touch with loved ones are likely to be distributed to too many other people because people are often negligent about blind-copying emails.
- Using virtual card numbers for your credit cards when available during purchases. These temporary numbers reduce the chances of your credit card number being involved in a data breach. Alternatively, you could use a prepaid credit card separate from your primary bank account for online purchases.
- Sign up for a Google Voice or similar virtual voicemail number instead of giving out a phone number you use for two-step verification. Hackers and scammers could gain access to your cellular number using SIM-switching tactics. You may want to avoid giving out a phone number for sites that don’t require it.
Use reverse lookup for any phone numbers you are unfamiliar with. Many reverse lookup sites can inform you about whether a phone number has a high percentage of scam complaints.
What to Do If You Have Been Conned
If you’ve fallen victim to a scam, don’t hesitate to report it to the authorities. Reporting a fraud, instead of letting it go, gives you better recourse to options for recovery, if possible.
When you’ve had your identity stolen, report it to the companies you have accounts with. You can request that a fraud alert be put on these accounts to deter any further fraudulent actions. If you have credit accounts, the companies you have accounts with must restrict your financial liability. Changing your sign-in information is another crucial step.
The credit-reporting bureaus can correct false information resulting from identity theft if you provide the proper notification. These companies can also put freezes on your accounts for greater protection against further fraud.
Financial scams should always be reported to the Federal Trade Commission (FTC). The FTC has the power to prosecute the people behind these scams. Also, if the fraud you have experienced hasn’t received much attention, reporting the incident to the FTC increases the chances of more people knowing about the threat.
If your Social Security number has been used for fraudulent purposes, you will want to contact the Social Security Administration (SSA). The SSA can take steps to bar your Social Security number from being used online without your knowledge.
Scammers posing as agents or representatives from the Internal Revenue Service (IRS) should be reported to the Treasury Inspector General for Tax Administration (TIGTA). TIGTA can take legal action against these types of scammers, potentially resulting in criminal prosecution.
If you’ve encountered an investing scam, you will want to contact the Securities and Exchange Commission (SEC). The regulatory agency that handles securities in your state should also receive a complaint.
Fake check scams should be reported to the United States Postal Service (USPS). The USPS Inspection Service can investigate and take action against the scammers responsible. If the fake check came from someone local, you might also benefit from contacting your police department.
Scams are more common than many people realize, and keeping yourself safe should be of primary importance. If you take the right steps, you can avoid becoming a victim.
We hope we were able to provide you with all of the information you needed about “Scams: How to Avoid Losing Money in 2023”. Please leave any comments or questions in the area given below.