Tom Fridrich, JD, CLU, ChFC®, Senior Wealth Planner
Whether perpetrated over the phone, via text, by email or online, financial fraud is a crime that unfortunately just keeps growing. Earlier this year, the FTC reported that it received 2.8 million reports of fraud from consumers in 2021, with losses estimated at $5.8 billion – a hefty 70% increase over 2020.
Why do so many people fall victim to fraud? For starters, scammers are always coming up with new ways to attack, making it difficult to pin down exactly what to look out for. They’re also experts at manipulation, using their victims’ emotions against them.
But there are tell-tale signs that, if you are vigilant, you can pick up on to help keep your hard-earned money safe. Here are a few tips to help you spot and avoid money scams.
- Only open emails from senders you know and trust. Phishing is one of the most common methods to fool people into giving out their information or downloading malicious software onto their computer. If you don’t recognize who the sender is on an email, don’t open it or click on any links. Simply delete the email or report it as spam.
- Seems too good to be true? It probably is. No, there are no Nigerian princes looking to gift you millions of dollars if you only front them a little money to start. If you find yourself getting pulled in on a get-rich-quick deal, talk to your financial advisor first to get their perspective.
- Be wary of duplicate friend requests. If you get a friend request from someone you’re already connected with on social media, it’s probably a scammer. Either ignore the request completely or reach out to your friend via another channel to check whether they sent the request (and let them know that they might have fallen victim to hackers). Whatever you do, don’t click accept, or you might open yourself up to hackers.
- Check it before you click it. Web tools such as Bitly and TinyURL can be used to shorten longer web addresses, usually for legitimate purposes (for example, to make a web address easier to remember). The problem is, the shortened URL looks nothing like the original, so it’s easy for scammers to disguise links to bad sites. There are many tools available online, such as checkshorturl.com, that you can use to expand these links to see where they lead.
- Verify apps before downloading. iTunes and Google Play have vigorous standards that apps must pass before being allowed on their platforms. As a rule, only download an app from those stores. For added protection, always check the app’s ratings first just to be sure it’s safe.
- Never give out personal information or account details over the phone. Phone scammers may try to tell you they work for the government, law enforcement or a financial institution to try to trick you into giving them vital information. Always remember that if one of these people were to actually call you, they should already have your information on hand, so there’s no need to verify in that manner.
- Monitor your accounts. You should regularly check all your financial accounts for strange transactions. If you see something, report it immediately to your bank or financial institution so they can investigate the issue. They may also decide to place a temporary hold on your account to prevent any further fraudulent charges.
What to do if you’ve been scammed
The first line of defense is to stay vigilant and only give out information to those you know and trust. But if you think you might have fallen prey to a fraudster, alert your financial professional right away. Additional resources you may find helpful include the AARP Fraud Helpline (877-908-3360) and the FTC online fraud reporting tool.