Chances are that all or most of your financial dealings are with legitimate actors working in good faith. There are, however, some less scrupulous individuals and organizations that will abuse your trust for monetary gain. Consumer financial scams can be surprisingly clever at times and can potentially spell ruin for your finances. An important part of smart money management is identifying and avoiding scams. Below are four common tactics used by scammers and how to avoid them.
In this digital age, a lot of financial crime is perpetrated online. One of the most common financial scams is called phishing. This is when a scammer attempts to solicit sensitive information such as bank account credentials by posing as a trustworthy entity.
For example, you may receive an urgent email from your bank indicating that they have noticed a possible fraudulent charge. In the email is a link to see details about the incident. You click the link and enter your username and password. Unfortunately, there is no fraudulent charge and the link didn’t go to your bank’s website. Instead, it went to another website set up by the phisher that simply looks like the bank site.
Avoiding Phishing Emails
In general, you should avoid clicking links in emails, especially if you need to log into the website. Instead, navigate directly to the website and log in there. Additionally, always check the URL in your browser and look at the email address that you received the alert from. If you are unsure, try calling your financial institution to ask about an alert.
Tax season is a time of anxiety for a lot of people. Some scammers exploit this by tricking victims into thinking that they owe taxes. The scammer may call you and say that you owe money to the IRS. He or she may offer a way to pay off the amount (possibly at a reduced rate) if you act now. Of course, you are really paying the scammer and not your taxes.
Avoiding Tax Scams
Always be skeptical if someone calls you about taxes. The IRS doesn’t typically call taxpayers and they never collect over the phone. Also, be mindful of the payment method. Again, the IRS won’t be asking you to wire money to them or send Bitcoin. Pause for a moment if you get a call about taxes. You can also simply hang up and call the IRS directly to inquire whether there is a real issue.
Check Overpayment Scams
With these financial scams, the criminal sends you a check for a transaction. However, he or she makes the check out to you for too much money. To make up for this, the scammer will ask you to pay back the extra or give the surplus to someone else (a relative or friend of his or hers). Then, the check bounces and you are out the money you paid back. This scam exploits the slow timeframe of bouncing checks to trick victims.
Avoiding Check Scams
If someone overpays you, be very skeptical of the transaction, especially if it is by a lot of money. Instead, ask the payer to cancel the check and send a new one. If it is a legitimate sender, he or she will do this. Additionally, checks are a less-than-ideal way to accept payments. Consider using an alternative such as a wire transfer. These other options are much easier for money management as well.
Family Emergency Scams
In utilizing these kinds of financial scams, the criminal will play on your emotions and contact you to say that a loved one is in an emergency. The scammer will ask for some money to help with the situation. This is a very common scam used to target grandparents or other elderly family members. It leverages the victim’s emotions and a sense of urgency to mask the fact that the whole story is fake.
Avoiding Family Emergency Scams
The simple solution to this scam is to contact the family member directly. Chances are that he or she is completely okay. Another option is to ask for additional details. The scammer may say that the person has been injured or arrested. You can get the name of where they are and contact the hospital or police station directly. As with many other scams, slowing the pace down a little will give you a chance to think clearly.
Get Help Dealing with Financial Struggles
Even those of us who are most careful with our money management can find ourselves in trouble due to a scam. While some schemes are obvious, others are very clever and subtle. If you ever find yourself having trouble with your finances due to a scam or any other reason, Financial Rescue LLC may be able to help with debt and tax relief solutions. Contact us today to learn more.