How to Outsmart the Most Common Money Scams
Financial scams are on the rise, according to the FTC’s annual Sentinel Data Book report , but there are a few simple steps most people can take to stay out of the game.
In 2018, consumers reported 3 million fraud incidents to the FTC, 48 percent of which involved some form of fraud. The most common types of fraud were:
- Fraud with impostors , such as catching cats, impersonating government officials or close relatives, etc.
- Debt collection fraud
- Identity theft
The telephone was the most common communication method used by scammers to contact victims, while bank transfers were the main method of paying for the scam. Here are some tips on how to avoid money scams in 2019.
Hang up
The telephone was the most common means of communication used to defraud consumers.
There are countless phone scams to look out for, but here are some of the ones we have encountered.
It’s time to pay taxes, but remember that the IRS probably wo n’t call you . It’s the same with the Social Security Administration . If you get a call from any “government agency” demanding immediate payment or you will go to jail, hang up and call the FTC or the agency itself. This is not how the government acts. (This scam is especially important to pass on to non-English speaking people and the elderly.)
This is true for any type of strange message you receive on the phone, whether it’s a call or text (or email). As stated earlier , Lifehacker never trusts and does not respond to random reports that something went wrong with an account, that there is an urgent problem, or that personal information is requested. “If you receive a confusing message or phone call, hang up or ignore it and contact your bank or financial institution directly.”
And given the heat of the 2020 elections, keep in mind that politicians, campaigns and other famous figures are likely to be faked, as recent incidents involving Donald Trump supporters have shown. If you are going to donate to any cause or charity , donate through the official website, not through text or social media.
Prevent Credit Card Fraud
Of the various types of identity theft, credit card fraud was the most commonly reported. Lifehacker offers a wealth of resources on how to avoid stealing your personal information and what to do if your credit card is compromised .
Fraudsters opening new accounts were reported far more often than using existing credit accounts, so one of the most important measures is to freeze your credit reports at three major credit bureaus: Equifax, Experian, and TransUnion.
Following credit card fraud, the most commonly reported cases were tax and phone / utility scams (eg, someone opened a utility account in a different name).
In addition to freezing your accounts, consider turning on fraud alerts (your bank or card issuer should offer them) and get in the habit of checking your statements regularly.