Beware of Financial Scams

My earliest memory of a financial scam involves my grandfather, who lost a significant portion of his savings. He had saved this money by denying himself many comforts, hoping for a secure retirement. I remember seeing both my grandparents deeply saddened — feeling lost, angry, hopeless, and hurt. It turned out the scammer had targeted many other elderly people in town, promising high returns on fake savings accounts.

Financial scams happen every day, and unfortunately, they are nearly impossible to stop. These criminals often operate from outside the U.S. and constantly change their tactics. The best way to avoid falling victim to a scam is to stay informed and remain vigilant.

RED FLAGS

Below are ten common red flags of financial scams. If your contact checks any of these points, disconnect with the contact and call for help.

1. Unsolicited Contact

Receiving unexpected calls, emails, or messages from unknown companies, organizations, or individuals, especially those asking for personal or financial information.

2. Urgency and Pressure Tactics

Scammers often create a sense of urgency or use high-pressure tactics, insisting that you act immediately to avoid missing out on an offer or to prevent some form of disaster.

3. Requests for Personal or Financial Information

Legitimate companies rarely ask for sensitive information (such as Social Security numbers, bank account details, or passwords) via phone, email, or text. If someone asks for this information unexpectedly, hang up and disengage.

4. Promises of Large Rewards or Returns

Offers that seem too good to be true, such as winning a lottery receiving a prize that you did not enter for, or guarantees of high returns with little or no risk, are often scams.

5. Unusual Payment Requests

Scammers may ask for payment through unusual methods, like gift cards, wire transfers, cryptocurrency, or prepaid debit cards. These methods are difficult to trace and recover.

6. Poor Grammar and Spelling

Many scam communications contain noticeable spelling or grammatical errors. This can indicate that the message is not from a reputable or professional source.

7. No Physical Address or Contact Information

Lack of verifiable contact details or a physical address for the organization can be a red flag. Legitimate companies usually provide clear contact information.

8. Requests to Keep the Interaction Secret

Scammers often ask you to keep the transaction or communication a secret, claiming that the offer is exclusive or that confidentiality is required.

9. Use of Emotional Manipulation

Scammers may use emotional tactics, such as claiming a relative is in trouble, feigning a romantic interest, or appealing to your compassion or fear to manipulate you into giving money or information.

10. Unverifiable Claims and Lack of Documentation

If an offer or investment opportunity lacks clear, official documentation, or the person cannot provide verifiable credentials or references, it is likely a scam.

COMMON FINANCIAL SCAMS

Scammers trick people out of their money or personal information. Staying vigilant and being aware of these schemes can help prevent becoming a victim.

1. Phishing Scams

• Description: Scammers use fake emails, text messages, or websites that appear to be from legitimate organizations (like banks, government agencies, or businesses) to trick you into revealing personal information, such as passwords, Social Security numbers, or credit card details.

• Example: You receive an email that looks like it's from your bank, asking you to click on a link and confirm your account information.

2. Tech Support Scams

• Description: Fraudsters pose as tech support agents from well-known companies (like Microsoft or Apple) and claim there is a problem with your computer that needs immediate fixing. They ask for remote access or payment for unnecessary services.

• Example: You receive a pop-up message or call saying your computer has a virus and you must pay for repairs.

3. Lottery and Sweepstakes Scams

• Description: Scammers claim you have won a large prize in a lottery or sweepstakes you never entered. They ask you to pay a fee or provide personal information to claim the prize.

• Example: You get a phone call or letter saying you won a lottery but must first pay taxes or fees upfront.

4. Romance Scams

• Description: Scammers create fake profiles on dating websites or social media to establish romantic relationships with victims. Once trust is built, they ask for money for various fabricated reasons.

• Example: An online "romantic interest" asks for money to help with an emergency, travel expenses, or medical bills.

5. Grandparent Scams

• Description: Scammers call pretending to be a grandchild or another relative in distress, asking for money to help with an emergency (like being in jail or needing medical treatment).

• Example: You receive a call from someone claiming to be your grandchild, asking for money urgently and pleading not to inform their parents.

6. Investment Scams

• Description: Fraudsters promise high returns with little or no risk to convince people to invest in fake schemes, such as Ponzi schemes, pyramid schemes, or unregistered securities.

• Example: You receive a call or email offering a "guaranteed" high-return investment opportunity with no risk, which turns out to be a scam.

7. Charity Scams

• Description: Scammers impersonate charitable organizations to solicit donations, often after natural disasters or tragic events.

• Example: You receive a call or email asking for donations to a charity you've never heard of or cannot verify.

8. Medicare and Health Insurance Scams

• Description: Scammers pretend to be Medicare or health insurance representatives to steal personal information or charge for fake medical services.

• Example: You receive a call claiming you need a new Medicare card and must provide personal information to receive it.

9. Online Shopping Scams

• Description: Scammers set up fake online stores or listings on legitimate marketplaces to sell non-existent or counterfeit products.

• Example: You purchase an item from an unfamiliar online store, and it never arrives, or you receive a counterfeit product.

10. Imposter Scams (Government or Utility)

• Description: Scammers impersonate government officials (such as IRS agents or Social Security Administration officers) or utility company employees to demand payments or personal information under threat of arrest or service disconnection.

• Example: You receive a call saying you owe back taxes and must pay immediately or face legal consequences.

11. Debt Collection Scams

• Description: Scammers pose as debt collectors or law enforcement officers, claiming you owe money on a debt that doesn’t exist or is not yours. They may use threats of arrest or lawsuits to scare you into paying.

• Example: You receive a call or letter demanding immediate payment for a debt you don’t recognize, with threats of legal action if you don’t comply.

12. Rental Scams

• Description: Scammers create fake rental listings online or hijack real ones, asking for deposits or rent payments upfront before the victim has seen the property or verified its legitimacy.

• Example: You find a great rental deal online, but the "landlord" asks for a security deposit or first month’s rent to be wired before you can view the property or sign a lease.

13. Employment Scams

• Description: Fraudsters offer fake job opportunities, often requiring upfront fees for training, supplies, or background checks, or requesting sensitive personal information for identity theft.

• Example: You receive a job offer for a position you never applied for, but they ask you to pay for a background check or provide personal information before you can start.

14. Timeshare Resale Scams

• Description: Scammers target timeshare owners, claiming they can help sell their timeshare for an upfront fee. After the fee is paid, the scammer disappears, and the timeshare is never sold.

• Example: You are contacted by someone claiming to have a buyer for your timeshare but need to pay a fee for closing costs or legal services upfront.

15. Fake Check Scams

• Description: Scammers send you a counterfeit check (often for more than the amount owed), asking you to deposit it and wire back the difference. The check eventually bounces, and you’re left responsible for the full amount.

• Example: You receive a check as part of a job or a sale, and the sender asks you to deposit it and send back a portion via wire transfer or gift card before the check clears.

HOW TO PROTECT YOURSELF

1. Trust but Verify:
If a caller claims to be from your bank, ask for their name and a callback number. Then, contact the bank directly using the phone number listed on their official website or other trusted sources. This allows you to verify whether the caller is a legitimate employee and request to speak with them directly.

2. Be Cautious of Phishing Emails:
Scammers can send emails that look almost identical to legitimate ones. Be very careful before clicking on any links. Check the sender's email address for mistakes, like using “irs.com” instead of the correct “irs.gov”.

3. Do Not Share Personal Financial Information:
Never give out your personal financial details or passwords over the phone, regardless of who the caller claims to be or what they say. Remember, you have the right to protect your privacy.

4. Beware of Urgent and Fearful Tactics:
If a caller pressures you with urgency or tries to scare you about losing money, it’s likely a scam. Scammers use fear to cloud your judgment. If you start feeling fearful or anxious, tell the caller you need to hang up — and then do so. Take a deep breath, review what just happened, and reach out to a friend, family member, or financial advisor for support. Talking it through with someone else can help you think clearly again.

5. Keep Love and Money Separate:
During the dating phase, avoid mixing love and money. If your online date shares too much personal information too quickly or asks for financial help — like needing money for an emergency or a family member’s surgery — this is a red flag. Even if the relationship seems genuine, it’s wise to keep money out of it, as these situations are often scams.

REPORT TO AUTHORITY

1. Call local police

2. Report the scam to the Federal Trade Commission

3. AARP Fraud Watch Network

AARP provides a comprehensive guide to avoiding scams, along with a helpline (877-908-3360) for advice and support.

Website: AARP Fraud Watch Network

4. Federal Trade Commission (FTC)

The FTC offers information on common scams targeting older adults and tips on how to protect personal information.

Website: FTC Consumer Information

5. National Council on Aging (NCOA)

The NCOA provides a detailed list of the top 10 financial scams targeting seniors and advice on how to avoid them.

Website: NCOA Senior Scams

6. Consumer Financial Protection Bureau (CFPB)

The CFPB offers resources to help older adults navigate financial challenges and avoid scams.

Website: CFPB Resources for Older Adults

7. Better Business Bureau (BBB)

The BBB Scam Tracker allows users to report scams and see what scams are happening in their area.

Website: BBB Scam Tracker

8. Identity Theft Resource Center (ITRC)

ITRC provides advice on protecting personal information and what to do if you suspect identity theft.

Website: ITRC Resources