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How to protect your family from 9 common scams

Updated: Jan 7

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Financial scams come in various forms and can be challenging to detect. With so many kinds of scams that seem to always be changing, it can be tough to determine where to report each type. Gather emails, receipts, and phone numbers so you’re prepared to complete your report.


Visit the USA.gov Report Scams and Fraud for a comprehensive list of who to contact if you become a fraud or scam victim.


Our digital world has opened the door for scams to be an impulsive click away on our phones or laptops. Here are nine common financial scams and how to protect your family.

Phishing scams


These scams typically involve an email or message that appears to be from a legitimate source, such as a bank or financial institution, requesting personal information such as account numbers or passwords. Phishing scams are becoming increasingly sophisticated, but there are steps you can take to protect yourself from becoming a victim. Here are some tips:

Be wary of unsolicited emails: If you receive an email from an unknown sender or an unexpected email from a known sender, be cautious. Check the sender's email address and look for signs of phishing, such as spelling mistakes or an urgent call to action.

Do not click on suspicious links: Hover over links to check the URL and ensure they lead to a legitimate website before clicking. Avoid clicking on links that are misspelled or have unusual characters.

Verify the source: If you receive an email claiming to be from your bank or financial institution, call the customer service number on their official website to verify the authenticity of the email.


Keep your software updated: Keep your computer and anti-virus software up to date to prevent hackers from exploiting known vulnerabilities.

Use two-factor authentication: Two-factor authentication provides an additional layer of security by requiring a code and your password to log in to your accounts.


Be careful with your personal information: Never give out your personal information, such as passwords or social security numbers, to unknown individuals or organizations.


Stay informed: Stay informed about the latest phishing scams and be vigilant about protecting your personal and financial information.


Learn more at the FTC webpage dedicated to defending yourself against phishing scams.


Ponzi schemes


Ponzi schemes promise high returns on investment but use new investors' money to pay off earlier investors rather than generating profits from a legitimate business. Eventually, the scheme collapses, and the perpetrators disappear with investors' money. Ponzi schemes can be challenging to detect, as they often appear legitimate investment opportunities. However, here are some steps you can take to protect yourself from becoming a victim:


Do your research: Research the investment opportunity and the person or company offering it. Check their credentials and look for any red flags or warning signs.

Beware of promises of high returns: Be cautious of investment opportunities that promise high returns with little or no risk. If it sounds too good to be true, it probably is.


Ask for documentation: Ask for documentation to support the investment opportunity, such as a prospectus or financial statements. Review the documents carefully and seek advice from a financial professional if necessary.


Avoid pressure to invest: Be wary of high-pressure sales tactics and tactics that create a sense of urgency to invest quickly.

Don't invest everything: Never invest more money than you can afford to lose. Diversify your investments and avoid putting all your eggs in one basket.


Consult a financial professional: Consult with a financial professional or investment advisor before making investment decisions.

Report suspicious activity: If you suspect you may be a victim of a Ponzi scheme, report the activity to the authorities as soon as possible.


Investment fraud


Investment fraud involves offering false or misleading information to potential investors, such as promises of high returns on a low-risk investment. Investment fraud is a serious issue that can lead to significant financial losses.



Do your research: Research the investment opportunity and the person or company offering it. Check their credentials and look for any red flags or warning signs.

Verify the investment opportunity: Verify the investment opportunity with independent sources, such as the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA).


Be cautious of high returns: Be cautious of investment opportunities that promise high returns with little or no risk. If it sounds too good to be true, it probably is.

Beware of unsolicited offers: Be cautious of unsolicited offers, such as cold calls or emails, offering investment opportunities.

Review all documentation: Carefully review all documentation related to the investment opportunity, including prospectuses, financial statements, and contracts. Seek advice from a financial professional if necessary.

Avoid pressure to invest: Be wary of high-pressure sales tactics and tactics that create a sense of urgency to invest quickly.


Consult a financial professional: Consult with a financial professional or investment advisor before making investment decisions.

Keep your personal information secure: Be cautious of providing personal information, such as your Social Security number or bank account information, to unknown individuals or companies.


Report suspicious activity: If you suspect you may be a victim of investment fraud, report the activity to the authorities as soon as possible.


Cryptocurrency fraud is a growing form of investment fraud. You need to be cautious and vigilant when dealing with cryptocurrencies. Cryptocurrency fraud can take many forms, such as investment scams, fake initial coin offerings (ICOs), phishing attacks, and theft through hacking or Ponzi schemes.


Advance fee scams


In these scams, the victim is promised a large sum of money in exchange for paying an upfront fee. However, the promised payout never materializes, leaving the victim out of pocket. Advance fee scams involve a fraudster asking for an upfront payment or fee in exchange for a promised reward that does not exist. Here are some tips to help you avoid becoming a victim of an advance fee scam:


Be cautious of unsolicited offers: Be cautious of unsolicited offers that require an upfront payment or fee, such as lottery or inheritance scams.


Do your research: Research the company or individual offering the opportunity and check their credentials. Look for any red flags or warning signs.


Beware of promises of large rewards: Be cautious of promises of large rewards or returns that seem too good to be true.

Never pay upfront: Never pay an upfront fee or payment to receive a reward or service. Legitimate companies or individuals do not require upfront payments or fees.


Keep your personal information secure: Be cautious of providing personal information, such as your Social Security number or bank account information, to unknown individuals or companies.


Consult a financial professional: Consult with a financial professional or attorney before making any payments or investments.


Stay informed: Stay informed about the latest scams and be vigilant about protecting your personal and financial information.


Report suspicious activity: If you suspect you may be a victim of an advance fee scam, report the activity to the authorities as soon as possible.


Identity theft


Identity theft involves stealing personal information, such as credit card numbers, to make unauthorized purchases or access financial accounts. Identity theft is a serious crime that can significantly impact your finances and credit score.



Protect your personal information: Keep your personal information, such as your Social Security number, driver's license number, and credit card information, secure. Do not share this information unless you know the recipient and trust them.

Use strong passwords: Use strong and unique passwords for all your online accounts. Consider using a password manager to generate and store passwords securely.

Monitor your accounts: Regularly monitor your bank and credit card statements for suspicious activity. Check your credit reports regularly to detect any unauthorized accounts or inquiries.


Be cautious of unsolicited offers: Avoid unsolicited offers, such as emails or phone calls, requesting personal information, or offering free credit reports.


Shred sensitive documents: Shred any documents that contain sensitive information, such as bank statements, credit card offers, and receipts.


Use secure Wi-Fi: Use secure Wi-Fi networks and avoid conducting sensitive transactions on public Wi-Fi networks.

Keep your software up to date: Keep your computer and mobile device software up to date to prevent hackers from exploiting known vulnerabilities.


Enable two-factor authentication: Enable two-factor authentication for your online accounts to provide an additional layer of security.

Report suspicious activity: If you suspect you may be a victim of identity theft, report the activity to the authorities as soon as possible.

Credit repair scams


Scammers offer to repair a victim's credit score in exchange for payment but often provide little or no actual service. Credit repair scams are fraudulent activities that promise to fix your credit score but only take your money without delivering the promised results. Here are some tips to help you avoid becoming a victim of credit repair scams:


Do your research: Research the credit repair company and check their credentials. Look for any red flags or warning signs.

Beware of promises: Be cautious of credit repair companies that promise to remove negative information from your credit report or guarantee a specific credit score. No legitimate company can guarantee results.

Check your credit report: You can check your credit report for free once a year from each of the three major credit bureaus. Review your report for any errors or inaccuracies that may negatively affect your credit score.

Know your rights: Under the Credit Repair Organizations Act, credit repair companies must provide a written contract outlining the services to be performed and the terms and conditions of payment.

Be cautious of upfront payments: Legitimate credit repair companies will not ask for upfront payments before performing services.

Keep records: Keep records of all communications and transactions with the credit repair company, including copies of any contracts or agreements.

Avoid giving personal information: Be cautious of providing personal information, such as your Social Security number or bank account information, to unknown individuals or companies.

Report suspicious activity: If you suspect you may be a victim of a credit repair scam, report the activity to the authorities as soon as possible.


Charity scams


These scams prey on people's generosity by posing as legitimate charities and requesting donations. Charity scams are fraudulent activities that exploit people's desire to help those in need. Here are some tips to help you avoid becoming a victim of charity scams:


Research the charity: Research the charity and check its credentials. Look for any red flags or warning signs.

Verify the charity: Verify its legitimacy by checking its registration with your state's charity registration office or the IRS's Tax Exempt Organization Search.

Avoid pressure: Avoid charities that pressure you to donate immediately, especially if they ask for cash, wire transfers, or gift cards.


Check for transparency: Check the charity's transparency and accountability by reviewing their financial statements, annual reports, and other information they provide.


Be cautious of similar names: Be cautious of charities with names similar to well-known organizations, as they may be using the name to deceive donors.


Do not give personal information: Do not give personal information, such as your Social Security number or bank account information, to unknown charities.


Do not give in to emotional appeals: Do not give in to emotional appeals that use heart-wrenching stories to solicit donations.


Verify donation receipts: Verify that you receive a donation receipt from the charity, which you can use for tax purposes.


Report suspicious activity: If you suspect you may be a victim of a charity scam, report the activity to the authorities as soon as possible.

Work-from-home scams


These scams offer a job that allows the victim to work from home and earn a high income, but often require an upfront payment or involve work that is not legitimate. Work-from-home scams are fraudulent activities that promise to provide work-from-home opportunities but only take your money or personal information without delivering the promised results.



Do your research: Research the company and check its credentials. Look for any red flags or warning signs.

Beware of promises: Be cautious of work-from-home opportunities that promise to make you rich overnight or guarantee a specific income.

Check for a physical address: Legitimate companies will have a physical address you can verify.

Be cautious of upfront payments: Be cautious of work-from-home opportunities that require upfront payments before providing any services.

Avoid providing personal information: Avoid providing personal information, such as your Social Security number or bank account information, to unknown individuals or companies.

Verify contact information: Verify the company's contact information, such as their phone number and email address.

Keep records: Keep records of all communications and transactions with the company, including copies of any contracts or agreements.

Avoid unsolicited job offers: Be cautious of unsolicited job offers from unknown sources or sent via email or social media.

Research the job offer: Research the job offer and the company by checking reviews and feedback from previous employees or customers.

Report suspicious activity: If you suspect you may be a victim of a work-from-home scam, report the activity to the authorities as soon as possible.

Timeshare scams


Timeshare scams are fraudulent activities that promise to provide attractive vacation properties or investment opportunities but only take your money without delivering the promised results. Here are some tips to help you avoid becoming a victim of timeshare scams:

Research the company: Research the timeshare company and check its credentials. Look for any red flags or warning signs.


Beware of high-pressure sales tactics: Be cautious of high-pressure sales tactics that use limited-time offers or gifts to pressure you into making a quick decision.


Read the contract: Read the timeshare contract carefully and make sure you understand all the terms and conditions before signing.

Be cautious of upfront payments: Be cautious of timeshare companies that require upfront payments before providing any services.


Verify the property: Verify the property by checking its location, amenities, and condition before purchasing.


Check for transparency: Check the timeshare company's transparency and accountability by reviewing its financial statements, annual reports, and other information they provide.


Be cautious of resale offers: Be cautious of timeshare resale offers that promise to help you sell your timeshare but require upfront fees or payments.


Consider the costs: Consider the costs associated with owning a timeshare, such as maintenance fees, taxes, and other expenses.


Avoid unsolicited offers: Be cautious of unsolicited offers from unknown sources or sent via email or social media.

Report suspicious activity: If you suspect you may be a victim of a timeshare scam, report the activity to the authorities as soon as possible.


Can you spot the scam?


Test your ability to spot the latest scam using the NY Times flip board.


 

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