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Avoiding Financial Scams

There are a plethora of financial scams and fraud attempts that exist. In fact, consumers reported losing more than $5.8 billion to fraud in 2021. Avoiding financial scams can seem difficult, but we’re here to help. It’s important to be aware of the types of scams you can encounter, how to identify a scam, and what you can do to protect yourself and your financial accounts.

Common types of scams

  • Imposter scams — These scammers attempt to get you to send money by impersonating someone you know or would typically trust, such as a local or federal government official.
  • Online shopping scams — Scammers set up illegitimate retailer websites that look like genuine stores. Sometimes you will receive the item you bought but it is a fake or knock-off, or you may receive nothing at all.
  • Lottery or sweepstakes scams — These will claim that you’ve won some type of prize, often by a federal government agency. They will ask you to make an upfront payment for fees and taxes to claim the prize.
  • Business or job opportunity scams — If a job opportunity sounds way too good to be true, it probably is. Some job scammers ask for bank account information to set up direct deposit or money transfer through a fake website, or they will send cashier’s checks that look like real ones, and the bank will later confirm the check is fake.
  • Debt settlement or collection scams — Collection scammers will pose as debt collectors and claim you owe money for a non-existing debt or one that has already been paid off. Settlement scammers offer a renegotiation or change of terms for an existing debt you have to a creditor or debt collector.

There are many more scams out there, but the most common ones fall within these categories. Scammers are constantly finding new ways to steal your money, so staying on top of the most frequently used scams will help you protect yourself.

How to tell if it’s a scam

Some scams are easy to recognize, but scammers become more sophisticated all the time and can pose in ways that make them seem extremely credible and legitimate. Here are the primary signs you should try to look for if you’re avoiding financial scams:

  • They claim to be from an organization you know, such as the bank, the IRS, a utility company, or even a charity. These organizations will never call or email you unexpectedly requesting your personal information.
  • They are alerting you of a problem. Some scams claim you are in trouble with the government, you owe money, there’s a virus on your computer, or there is an issue with one of your accounts. You may receive alerts like this under legitimate circumstances, but, again, you will never be asked to verify information on the spot.
  • You will be pressured to act immediately. Scammers don’t want you to have time to recognize their ploy, so they push it as an emergency. Real organizations will typically notify you of a time period in which you can resolve an issue — for example, if an automatic payment can’t be made due to insufficient funds, they will ask you to personally resolve the issue within a certain number of days.
  • You are asked to make a payment by money transfer, gift card, or depositing a check and sending money back to someone. If you are ever asked to make a payment that seems legitimate, call the organization to confirm (from their certified phone number, not one you may have been provided).

The best ways to avoid a scam

Lots of scams slip through the cracks, particularly those over the phone or by email, and you may be faced with one every now and then. However, there are ways you minimize the possibility of scams.

  • Block unwanted calls and text messages. In fact, many phone service providers now have a feature where phone numbers that seem fishy or have a history of spam reports will show up on caller ID as “potential scam” or will be sent to a spam folder.
  • Never give your personal or financial information to someone making a claim that you did not expect. If they are contacting you, you should not verify any information without validating the request.
  • Change your account passwords frequently. This includes bank or any other financial accounts, online shopping accounts, or sensitive accounts.
  • Be cautious about online transactions. Always make sure you have a secure internet connection and that the website itself is secure and trusted. For an extra layer of protection, permanently delete any personal information from autofill field generators.

If you ever suspect a scam, don’t act. When avoiding financial scams do not click any links or call any phone numbers associated with the request you receive. Do not verify any personal information, and immediately say something by reporting it to the Federal Trade Commission, the state attorney general, or the police. If you want to learn more about how to protect your financial information, call Republic Bank at 800-526-9127 and one of our expert team members will be happy to help!

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