When you pick up a phone call, answer an email, or check your mailbox, the last thing you want is to become the unsuspecting victim of a financial scam. Scammers are clever, and they’re finding more and more ways to trick you into giving up your money, account details, or personal information. As clever as they might be, there are still plenty of ways to outsmart them, and you can start by knowing what scams are the most popular and how to avoid them:

Phishing  

Phishing is one of the most common scams we’re facing today. Think back to your emails and text messages: did you notice anything off about that bank text claiming you need to click on a link and reset your compromised account? That’s because phishing scams involve a criminal posing as a trusted source – like your bank – and asking you to click a link or download an attachment. Usually, the scammer will claim that this action is urgent as a way to trick you into acting without a second thought. The reality is that this scam is designed to steal your personal information so scammers can access your bank account or install malware on your device that can do the same.

The next time you come across a potential phishing scam, take a moment to think about the red flags. Are there misspellings in the email? Has this email or phone number contacted you before? When you hover over a link, does the URL match the one included in the message? Instead of taking immediate action, be sure to contact the person or company that a scammer claims to be using a verified email or phone number. This way you’ll be able to confirm if the person is who they say they are or if you’re being lured in by a phish.

Fake Websites

No two URLs are the same – and some can be dangerous. In some cases, fraudsters might set up legitimate-looking websites for fake banking institutions and lure unsuspecting users in with the promise of low fees, interest rates, or other deals that are too good to pass up. Other times, the fraudster creates a copy of a real banking website to pose as a well-known institution. In this situation, customers may be told that there’s something wrong with their account and are encouraged to login to the fake website. In either case, the fraudster’s goal is to trick consumers into giving up their username and passcode, account details, or sensitive personal information. In the end, the criminal can then use this information to steal money from your account or steal your identity.

So, be sure to think twice before clicking on a URL. Always double check that the URL is secure by making sure it starts with https:// and that the padlock next to the URL is locked. Better yet, if you’re suspicious of a link to your bank’s website, use your trusted search engine and navigate to the website yourself so you can be sure you’re looking at the true webpage, not a fake.

Check Overpayment Scams

If you have a side hustle selling on websites such as eBay or Facebook Marketplace, then this is one scam you definitely want to look out for. The check overpayment scam specifically targets online vendors and sellers. It starts when a buyer purchases something you’re selling with a check for more than the amount owed. They’ll then ask you to wire the difference. The catch is that the check they paid with is actually counterfeit, and as a result, you’ll end up owing your bank a returned check fee. Not to mention, you’ll also be out the difference you refunded and the product that the scammer “bought.”

To avoid the check overpayment scam, take the extra step of determining whether an interested buyer is who they say they are by verifying their name, address, and phone number. And, as exciting as making a sale might be, don’t rush to cash a check and immediately wire money from it. If you notice any red flags about a buyer’s payment, it doesn’t hurt to take precaution and contact your bank about your concerns.

Scam Calls

A robotic voice just called saying, “We’ve been trying to reach you about your car’s extended warranty.” Sound familiar? Scam calls come in all shapes and forms, from posing as car dealerships, government officials, your bank, or representatives claiming that you’ve won the lottery. Scam calls can also be tricky to detect. In fact, scammers can even spoof your local area code so that the caller ID looks legitimate. No matter the script, these calls are designed to get you to take urgent action such as reading off your credit card details to verify your “compromised” bank account, sharing sensitive information so you can claim a prize, or sending prepaid gift cards to avoid prison time for supposed debt.

The best-case scenario is to ignore these calls entirely or hang up once you notice that something is off. If you receive a voicemail from an unknown number, don’t take any action just yet or call the number back – no matter how urgent the caller may make it seem. Instead, be sure to verify the legitimacy of the call by independently reaching out to a verified phone number for the institution that a scammer is posing as. And remember, if an offer seems too good to be true, then it probably is. Real banks and federal agencies will not ask for your sensitive information over the phone, and if you haven’t entered any sweepstakes then you probably haven’t won anything.

Charity Scams

Similar to scam calls are charity scams, where scammers will call and ask for donations to either false charities or real charities that they’re posing as. This scam is designed to take advantage of a victim’s good intentions. You might think you’re doing a good thing by giving money to a cause you care about but, unfortunately, you’ve just given your bank account or debit card information to a scammer. Next thing you know, a scammer has full access to your checking account and can steal from your funds or steal your identity.

So, how do I know when to trust a charity? Always do your research and go with a charity that you know and trust. Be sure to donate through legitimate donation channels such as the charity’s headquarters or a verified website. Additionally, always be cautious when talking on the phone with a stranger and never give out your personal information through a call or through email.

Online Lending Scams

In another case of scammers making offers that are too good to be true, there’s the online lending scam. This is usually targeted at those who are having trouble acquiring bank loans. Scammers use victims’ frustrations to their advantage by sending emails or creating fake websites that offer easy access to lending programs. Victims are then asked to provide their sensitive personal information under the guise of a loan application. Other times, victims are asked to send a “good-faith” payment before obtaining their loan. But, of course, the loan is only a ruse and instead you’ve given the scammer access to your banking credentials, your identity, or your money.

Once again, don’t trust an offer that seems too good to be true. Do your research before acting by checking reviews and ratings to verify if the institution offering you a loan is legitimate.

Employment Scams

Speaking of scams that take advantage of peoples’ frustrations, let’s discuss the employment scam. This one is especially geared toward young adults or those having trouble finding a job. In many of these scams, a fraudster will reach out to offer you a job and, in exchange, request personal information for your job application or money for “training,” “equipment,” or “up-front fees.” As you’ve likely guessed by now, these job offers are just a ploy. In the end, you could be out any cash you paid or, worse, you may have given away information that the criminal can use to steal your identity.

Know that a legitimate employer will never ask you to cover the cost of training or company equipment. They also won’t ask for any sensitive personal information such as your bank credentials or social security number during the application process. If a company begins asking for money or these personal details, then it’s best to look for a job opportunity elsewhere.

Check-Cashing Scams

While it’s kind to help out a stranger, this is one situation where doing so could be costly.

In the check-cashing scam, a person will approach you outside of your bank or financial institution and ask for your help in cashing a check. Usually, they will claim that they don’t have an account at this bank but need the money right away. Their goal is for you to deposit the check in your own account and give them the funds. Of course, these checks are fakes, leaving you out of hundreds or thousands of dollars.

As with charity scams, this scheme is designed to prey on your good intentions. No matter how much you want to help, it’s important that you never deposit a check on behalf of someone else.

Unsolicited Check Fraud

Picture this: you go to check your mailbox and find a surprise rebate check or a refund for overpayment. At first glance, you might be excited over earning some free money. In truth, this is likely a case of unsolicited check fraud. Instead of a boost to your funds, these checks might include fine print that tricks you into authorizing memberships, loans, or other long-term commitments.

Always be sure to thoroughly inspect any checks you receive and pay attention to any fine print on the front or back. Keep in mind that if you weren’t expecting a check in the mail, receiving one is a red flag that something is not right.

Check Washing

As you’ve likely noticed, check fraud is still on the rise. In addition to the previous two schemes, check washing is a growing issue that could cost you. With this scam, criminals will steal checks from your mailbox, or a post office drop box. They then use a chemical process, called “washing,” to remove the ink and create a blank check. Next thing you know, this check is being filled out and used by criminals to commit financial fraud.

The best practice for avoiding check washing is to avoid mailing checks. Consider switching to electronic bill pay or, if you do need to mail a check, be sure to drop off the envelop directly at the post office or at the in-lobby drop box. As always, take care to monitor your bank accounts regularly so you can quickly spot any suspicious activity and alert your bank.

What to Do if You’re a Victim

If you’ve accidentally fallen victim to one of these financial scams, it’s important to act quickly:

  • Contact your financial institution as soon as you notice suspicious activity on your account. This way, your bank or credit union can freeze your card and close your account to prevent scammers from taking advantage of them.
  • Change your passwords right away to keep scammers out of your accounts. It’s always a good practice to create passwords that are at least 8 characters in length, with a mix of uppercase and lowercase letters, numbers, and symbols. You can even set up multi-factor authentication to add an extra layer of security to your accounts.
  • File a police report if necessary. This can help you to dispute any unauthorized actions with your bank and also aid in stopping a scammer from committing further criminal activities.
  • Notify the Federal Trade Commission, as the FTC can investigate the scam and help prevent others from falling victim to it as well. The FTC can also help you create an identity theft recovery plan so you can get back on track after a scam throws you off course.