Staying educated about scams and frauds can help you avoid becoming a victim
It seems like every time you turn on the news, there’s a new report of a scam making the rounds. Scams are designed to defraud you by either obtaining your personal or financial information, or by obtaining your money or other assets – and new scams are constantly surfacing.
Staying educated about current scams can help you avoid becoming a victim. The FTC’s Scam Alerts web page and the FBI’s Common Fraud Schemes web page are excellent resources for information about the latest scams.
There are a variety of types of scams—we’ve outlined several below. For tips on how to avoid being a victim of scams or fraud, check out our Best Practices section.
Common types of scams include:
Phishing – Phishing is a technique that uses deceptive emails, pop-up messages, text messages, or messages via social media designed to trick you into providing personal information to scammers. The messages often appear to be from legitimate businesses and may contain urgent statements to get you to act quickly and click on a link, provide account information, or change your password. Don’t click that link! Doing so will direct you to a phony website – and any information you provide could be used to fraudulently access your accounts, make purchases, steal your identity, or more.
Pharming is a more sophisticated type of phishing that occurs when a malicious program or virus has been installed on your computer or when someone has taken advantage of vulnerabilities in your Internet server. When this happens, your web browser will redirect you from a legitimate website to a fraudulent one – and it all happens behind the scenes, without your knowledge. Like phishing, the goal of pharming is to get you to provide personal information on fraudulent websites so that information can be stolen.
Telemarketing Scams – Telemarketing calls aren’t just an annoyance, they’re a common method scammers use to con you out of your money. Phone scammers are great at pitching convincing stories – and they’ll tell you just about anything to get you to trust them. Though it can be tough to tell if a telemarketing call is a scam, some commons themes include:
- IRS Scams – Especially common during tax time, scammers call posing as an employee of the Internal Revenue Service, demanding payment for hundreds or thousands of dollars in taxes. They often make threats, such as arrest, if payments aren’t promptly made. According to IRS.gov, the IRS will never:
- Call to demand immediate payment, nor will they call about taxes owed without first having mailed you a bill
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe
- Require you to use a specific payment method for your taxes, such as a prepaid debit card
- Ask for credit or debit card numbers over the phone
- Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying
- Sweepstakes scams – Beware, it’s probably a scam if a caller claims you’ve won a sweepstakes, prize or lottery and then asks you to pay money up front for taxes, fees, shipping & handling, etc.
- Other common telemarketing scam themes include:
- Offers to lower your credit card rate
- Free or low-cost travel packages
- Extended car warranties
- Free trial offers
- Urgent charitable donation requests
- Advance fee or payday loans
Invoice solicitations – Some illegitimate businesses send you solicitations that look like invoices to try to get you to order from them or switch your services to them – don’t be victimized! Scammers hope unsuspecting individuals are fooled by the look of the invoice and indeed mail in money, thinking they may have placed an order and forgotten about it. Even though it often says "not an invoice" somewhere on the material, it's often in the fine print and thus overlooked.
Advance fee loans, credit card offers – If you have ever been denied a loan you tried to obtain through normal sources, you may be tempted to take advantage of an advance fee loan scheme. In this scheme, a con artist offers you a "guaranteed" loan or credit card offer for a fee paid in advance. The scammer claims to be able to obtain a loan or credit card for you from a legitimate lending institution, but in the end you lose your money and don't get the loan. Keep in mind that legitimate lenders do not guarantee loans or credit cards before you apply.
Nigerian scams – Nigerian scams begin with a letter or email offering you a large share of money if you can help the sender transfer money out of their country. In order to receive your share of the money offered, you are asked to pay advance fees or provide your bank account details to help the scammers get their money transferred. Once you pay the requested fees, the scammers often come up with reasons for additional, more expensive fees.
End result? They get your money, your bank account information, or both, and they never send the large share of money they promised. If they have your bank account information, they can impersonate you in order to drain your account or get you locked out of your own account.
Lottery scams – If you’ve received an email, fax, or letter claiming you’ve just won a lottery – often an “international” lottery – you’ve likely received an attempt at a lottery scam. The letters inform you that you’ve won, but ask you to pay money up front (for taxes, processing fees, or insurance). You might even be asked for your bank account information which might then be used to steal your identity or empty your accounts.
PLEASE NOTE: All information on our security resources pages is provided as a convenience to customers and non-customers alike. Our Online Privacy & Terms apply to all information posted. In case you are the victim of a financial or other crime involving any of the security issues discussed here, contact law enforcement and other pertinent authorities and organizations IMMEDIATELY. Never send out your personal information by unencrypted email.