FINANCIAL FRAUDS YOU SHOULD BE AWARE TO AVOID

Emily Andrews, Marketing Communications Specialist at RecordsFinder.

 

Financial fraud is the use of deception, misleading tactics, or outright theft to steal from another person or obtain sensitive data to steal from them or cause them financial harm. Financial fraud can occur from a variety of methods. Every year, millions of people are victimized in this manner.

Below, we discuss the 10 most common financial scams and what you can do to protect yourself.

 

10 Common Scams You Should Avoid

Here are the 10 most common financial scams to be aware of:

1.Credit and Debit Card Fraud

Credit or debit card fraud occurs when a person gets a hold of your credit or debit card information in order to make unauthorized purchases or cash advances. In some situations, the thief gets access to your account and takes it over so that you are not made aware of the fraudulent activity.

Emily Andrews

2.Identity Theft

Identity theft occurs when a person obtains your confidential information like your date of birth and social security number and uses it to obtain credit, accounts, or other things of value in your name. In some situations, the criminal may work under your name, amassing tax debt, or even commit crimes. It can be incredibly difficult to disconnect yourself from unauthorized purchases and to reclaim your financial identity.

3.Phishing

Phishing scams seek to obtain personal information such as your social security number, password, or bank account information. The scammer may pose as your bank and send you a message through text or email, asking you to “update” or “verify” your information. Scammers often use fake emails, phone numbers, and websites that appear to be legitimate in order to obtain access to accounts and personal information. However, the links they send are often infected with viruses that steal information from your device or take you to a website to store your personal information and then sell it to others.

4.Fake Checks

In some scams, a scammer may contact you and ask for assistance cashing checks. They may promise to give you a portion of the money if you deposit them into your account. Once you deposit them and transfer funds to them, the check will usually bounce or show up as a forgery, leaving you with no deposit, plus insufficient fund fees. This scam can take on many forms. The scammer might give you checks because they claim they have hired you for a job, that you won a sweepstakes, or that you won a “free” vacation. Sometimes, they say they paid you too much and need to go through this process to “refund” you.

5. Virtual Threats

A particularly concerning type of financial fraud is a virtual threat in which a scammer gets sensitive information, such as suggestive photos or your company’s trade secrets by infecting your device and then threatening to release the information unless you pay an expensive ransom. In other situations, the scammer may lock you out of your own device or network until you pay the ransom.

6. Lottery Scams

The lottery scam is one of the oldest types of scams out there. In this scam, the fraudster claims you have won the lottery or another prize but that you have to pay a fee to collect it, money to ship it, or customs fees.

7. Fake Charities

In fake charity scams, the fraudster pretends to represent a real charity or sets up a fake organization and then solicits donations for the charity. This type of scam often follows natural disasters or other tragedies.

8. Mortgage Scams

Mortgage scams occur when a third party obtains a mortgage using your personal information. Other mortgage scams are perpetrated by lenders who sell mortgages or other loans by using deceptive practices or high-pressure sales techniques.

9. COVID-19 Scams

COVID-19 has inspired many additional scams, which may involve scammers:

  • Pretending to be CDC or other professionals to request sensitive information
  • Selling fake at-home coronavirus tests or treatments
  • Charging for vaccinations
  • Selling fake cures
  • Creating fake vaccine verification apps to steal information
  • Selling vaccine certificates or passports

10. Employment Scams

COVID-19 has also inspired employment scams with so many people being laid off and working from home. These scams may involve scammers posing as employers to obtain sensitive information, charge for training materials or certifications, or who send fake checks to “employees.”

 

How to Protect Yourself from Such Scams

The best way to protect yourself from a scam is to identify it as a scam before you are hooked. Here are some clues from the Texas Attorney General and Federal Trade Commission of a potential scam:

  • They contact you
  • They dangle something enticing, like money or a prize
  • There is some type of problem, such as you owe money to the government, your grandchild is in jail, or there is a virus on your computer
  • You are pressured to act immediately so you don’t have time to check on their claims
  • They ask for your personal information, such as your date of birth, social security number, or bank account number
  • You are instructed to pay first for something like shipping charges, custom fees, or other upfront fees
  • They claim to be from an organization you trust, such as the IRS, Medicare, a charity, or the CDC
  • You are told to wire money, send gift cards, or pay in some other untraditional way

Other ways that you can avoid potential scams include:

  • Block calls, text messages and emails from scammers
  • Check public records for anyone who contacts you
  • Don’t give out personal information to someone who calls, texts, or emails you
  • Don’t send money to someone you don’t know via wire transfer service or gift card
  • Don’t click on links in emails or text messages
  • Check on the caller’s claims by contacting the business or organization directly

 

What to Do When You’re a Victim of a Scam

If you are the victim of a scam, contact local authorities and report the events as a crime. Also, report it to the Federal Trade Commission. Take whatever steps you can to minimize the damage, such as stopping checks, closing your account, or putting a freeze on your credit.

 

Conclusion

Financial fraud results in billions of losses every year. But, by following the steps outlined above and taking immediate action if you become a victim of such a fraud, you can minimize the impact.

 

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