How to Spot a Financial Scam During Uncertain Times

We're working on something new for you—it's a podcast! Guiding You Forward is a chance to get the professional financial advice you've been searching for. You'll find interviews with a variety of knowledgeable experts, real-world strategies to manage your money and practical advice on everything finance related. Our latest episode dives in to scams and fraud:

• Types of scams and fraud

• What to look for

• How to protect yourself

In recent months, the world has been faced with challenges that we’ve never seen or experienced in our lifetime. It’s no wonder we’re feeling confused. This confusion is likely spilling over to the state of our finances.

Consequently, those who aim to perpetrate fraud will try to exploit our anxiety and desire for answers. How? Fraudsters are creating increasingly sophisticated scams in an attempt to steal consumers’ personal information and assets.

That’s why it’s important, now more than ever, to learn about the types of scams that are out there and how to recognize them.

Who can be a victim of fraud?

The short answer is anyone. Many people think that only the elderly or those with money to spare can fall victim to financial scams. Actually, teenagers are being targeted more and more because of their inexperience. All scammers need is someone with an active bank account—they don’t care how much is in it.

These thieves reach out to potential marks via email, phone, social media or even in person. Social media scams have seen the biggest surge in recent years.
 

Two tips to help you recognize fraud:

1. If anyone wants to send you money and then asks you to send it to someone else, it’s FRAUD.

2. If anyone asks for your username and password, it’s FRAUD.
    

What are the most popular types of fraud?

Scammers will exploit anything and everything to get what they want. Many scams fall under the “money mule” category. A fraudster will convince someone to exchange bad money (counterfeit or illegally obtained) for good or legitimate money. Here are some money mule scams to watch out for:

• You’ve won a prize/grant/loan—Usually through an email, text or social media direct message, you are notified that you’ve won something—all you have to do is click the link or open an attachment. During times of government assistance, like COVID-19 or natural disasters, it’s not uncommon to see offers to get your stimulus check sooner. Don’t fall for it!

• We have a job for you—Job hunting scams are always around but, since so many companies have been forced to lay off workers during this pandemic, they are more prevalent than ever. Be wary of any company saying they will send you money and then asking you to send that money to someone else. For example:

  • You may think you’re applying for a payroll processing job. However, the company is asking that you use your own bank account. They will direct deposit money into your account for payroll and then ask you to send the money out to the “employees.”

  • You’ve been hired to be a secret shopper. Your “employer” sends money to your account and asks you to secret shop with money transfer apps like Venmo, Apple Cash or Square Cash, or wire services like Western Union.

     

• Have you met the one?—Millions of people turn to online dating apps or social media sites to meet their sweetheart. But instead of finding romance, many find a scammer trying to trick them into sending money. Never send money or gifts to a love interest you haven’t met in person.

   

Other scams will try to play to your emotion. Fraudsters use deception to manipulate people into participating in social engineering. SOS scams are a type of social engineering which involve a scammer convincing someone of a critical, urgent need. Here are a few examples to be aware of:

• Urgent information—Fraudsters contact you by email, text or phone claiming to be a health official or expert providing information about an emergency like coronavirus. Often, the emails contain links or attachments with malware, or they direct the individual to a malicious website where personal information or login credentials are collected.

• Donation scams—Whether it’s to help a community recover from disaster, a specific family member with medical hardships or some other plea for support, always check out the charity directly before making a donation.

• Non-delivery scams—You may come upon an offer, through social media, email or text, for certain products that seem to be scarce. In these types of scams, a product is ordered, paid for ahead of time and never received.

• Grandma scams—Someone, often an elderly family member, gets a phone call supposedly from a grandchild. The scammer tells the person that they have been arrested in a foreign country and needs money urgently to get home. They are counting on this person reacting quickly and sending the money without checking the facts of the situation.
   

What can I do to prevent fraud?

Be alert—Be on the lookout for fraud in all its forms—emails, social media posts and direct messages, phone calls and texts. Before you click on any links or open any attachments, do the following:

• Check the email address of the sender. It may look familiar if you glance at it quickly but, if you look closer, you may see something that isn’t right.

• Hover over the links to see the full address. Malicious links often send you to a webpage that looks similar to one you’re familiar with but, in reality, has additional fields requesting personal information.

• Confirm the identity of the sender via an alternative source—contact the company directly through their website.

• Look for poor grammar and spelling in emails, texts and social media posts or messages. Urgent language, fake logos and little or no contact information are also warning signs.

• Want more tips to avoid fraud? Go to usa.gov.

   

Research before donating—Verify the entity requesting money by checking with the Better Business Bureau, reading reviews and doing additional research. Keep in mind that legitimate charities don’t accept cryptocurrency or require their donors to give gift cards.

Don’t fall for obscure online retailers—In this uncertain environment where everyday items can be difficult to find, you may wonder why you’re seeing so many ads on social media or in your inbox for those very products. Before you buy, make sure to research the company thoroughly.

Practice restraint when it comes to claims that you “must act now”—No matter how dramatic the ad, email or the person on the phone seems, resist the urge to send money immediately. Take time to confirm the identity of anyone contacting you or offer to call back on a phone number that you know to be genuine. Fact check by running it by someone you trust. And never send wire transfers, money orders, checks or gift cards without doing your due diligence.

How can Mountain America help?

If you have a question about the legitimacy of a company, Mountain America Credit Union is here to help. Feel free to forward the email or direct message to phishing@macu.com and we can take a look at it for you.

Remember, if anyone wants to send you money and then asks you to send it to someone else, it’s FRAUD. If anyone asks for your username and password, it’s FRAUD.

If you think you may have been a victim of fraud, contact your nearest branch, our service center or the Federal Trade Commission immediately.