Financial and tax scams are continuously evolving, and scammers work diligently to “improve” their tactics and find new ways to trick people out of thousands or millions of dollars every year. This is why it’s critical for both individuals and businesses to keep a close eye on their digital activity, keep strong security measures in place, and always be wary of suspicious, unsolicited contact from anyone, even though they claim to be legitimate.
Common Financial Scams
Many scams happen via phone or email, and while some may be easy to identify, other scam artists may be well-practiced and difficult to distinguish. Here are a few common scams that happen commonly:
- Charity scams that request donations for an illegitimate/fake charity
- Debt collection scams that request payment for debts you don’t owe or have already paid
- Banks that claim you have fraudulent or suspicious activity in your accounts and ask you to verify information
- IRS or other government agency scams
- Lottery or prize scams that claim you’ve won a prize and ask for money upfront for fees and taxes
- Identity theft/fraud scams that occur by gaining access to your sensitive financial information, online logins and passwords, etc.
How to Protect Yourself from Scams
First and foremost, make sure to be diligent about protecting your online information any time you use a website or mobile app. You can do so by turning on multi-factor authentication functions as well as using biometric capabilities like fingerprint sensors. You should also be regularly resetting your passwords and avoid sharing the same password across multiple accounts. Another precaution to take is to be wary of public wi-fi connections that you don’t trust, such as in airports, coffee shops, libraries, etc.
When it comes to email and phone scams, there are several things to look out for.
- Banks, financial institutions, and even the IRS will never email or call you requesting the verification of sensitive information. If they do, hang up and call back your bank to verify its legitimacy, and never send your personal information via email.
- Both emails and phone numbers can be easily faked to appear as if they are coming from your actual bank or another trustworthy organization. If they have reached out to you unprompted, be sure to triple check the source and legitimacy of any communication.
- Never click on any links that you don’t recognize or that direct you to another site that requests information.
- Never wire transfer money or make a payment to someone demanding immediate urgency, such as police action or other threats. Banks, financial institutions such as lenders, and the IRS almost always give you several warnings and a grace period to sort out unexpected situations.
If you feel like you have been or are the victim of a scam, report it to the authorities. You can do so by submitting an online complaint with the Federal Trade Commission, contacting the local authorities, reporting it to your state attorney general, or directly to the IRS if it is tax related.
If you have additional questions about financial scams or need more information on how to protect your bank accounts and credit cards, our team is happy to help. Give us a call at 800-526-9127.