5 Tips for avoiding financial scams

Are you financial scam-savvy?  Read these 5 tips for avoiding financial scams, and you will be

You’re a smart person, not likely to fall for the tricks of a scammer wanting to bilk you out of your hard-earned money, right? Then it might surprise you to know that one in 10 adults in the United States lost money in telephone scams in 2016, for a total of $9.5 billion 1 And countless more people around the globe were scammed online or in-person.

If you think it’s just the elderly or the unaware who are susceptible to these sophisticated tricks, think again. Social media scams typically target Millennials, who’ve been online their whole lives, and tax scams often target experienced business people.

So how can you avoid being a statistic? Arm yourself with knowledge, pay attention when a scam is reported in the news and approach potential financial transactions with a sense of skepticism – especially if they involve someone you don’t know.

There is an overwhelming amount of ways scammers try – and often succeed – to trick people out of their money. Scammers work hard at coming up with new tactics and techniques all the time, while still relying on the tried-and-true methods of the past. You might have been the recipient of a scammer’s phone call, an email, a social media message or an in-person knock on the door. And scams can vary widely, including the promise of a winning a great vacation or vehicle, purported business opportunities, pleas from a supposed loved one or a stranger in need, and threats regarding your tax payments or health insurance.

The main things to keep in mind are: if you’re being offered something of great value for free, it’s probably not; and if you’re unsure whether a person or a cause is legitimate, just hang up or walk away. Then call your bank, health insurance provider or tax agency to make an inquiry of your own.

Here are five simple tips for avoiding scams in all their guises:

  1. Listen to your gut instinct
    If you feel that the person contacting you isn’t who they say they are, or isn’t representing a legitimate cause, trust yourself. Ask the person for their employee number or a supervisor’s name and phone number. Many of these lines of inquiry will stop a scammer in their tracks.
  2. Stay on top of your accounts
    Review your credit card and bank statements at least every month to ensure that unauthorized transactions aren’t taking place. Better yet, use online banking to check your balances weekly and ensure everything is in order. If you see a transaction you can’t identify, report it.
  3. Never, ever wire money to a stranger
    You might be offered the chance to get in on the ground floor of a no-fail business or the opportunity to help a supposedly down-on-his-luck sultan, who will richly reward you for a loan. You might be asked to send money to a long-lost niece. Don’t do it. More than likely, it’s a scam.
  4.  Keep your financial information private
    Never provide financial details to someone you don’t know, in person, online or over the phone. A reputable financial institution won’t ask for your bank account number, but rather a banking password, a code word or something similar.
  5.  Just don’t click there
    Links in emails from unknown senders can be spam triggers or infect your computer with malware or ransomware. Don’t click on a link unless you’re sure that it’s from a trusted source.

If you believe you’ve been contacted by a scammer, get in touch with the organization he or she is trying to impersonate – like your bank, a certain charity or the tax authorities. Let them know about the scam so that they can alert others about it.

Lastly, some people feel embarrassed if they end up getting taken advantage of. It’s natural that they may feel that way, but they shouldn’t. Scammers can be very sophisticated and very determined. If you see that you’ve been scammed, report it right away (to one of the U.S. agencies listed here or to the Canadian Anti-Fraud Centre)  and try to learn from the situation. Don’t be fooled again!

Disclaimer:

The information provided in this article is for information purposes only and does not constitute professional advice to be relied upon. Foresters Financial does not provide investment, tax or legal advice.

Sources

  1. https://www.marketwatch.com/story/heres-how-much-phone-scams-cost-americans-last-year-2017-04-19

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Nancy Carr

Nancy Carr lives and works in Toronto as a freelance writer and editor. She’s a former business reporter who enjoys writing about personal finance and real estate, as well as health, travel and family matters. You can reach her on Twitter (@NancyCarrComms) or LinkedIn.