What should I know about financial fraud and scams?

Contents

• What are common financial scams?
• What are my rights and responsibilities?

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What are common financial scams?

Financial fraud is when someone takes your money through dishonest or illegal methods. It is estimated that telemarketing fraud costs Americans $40 billion a year and Georgians about $500 million a year. In addition to telemarketing fraud, there are scams and swindles connected to home repairs, contests and sweepstakes, charity drives, investment offers, insurance, and health care. Many of these scams are targeted to older adults. In Georgia, the Department of Law's Consumer Protection Unit and the Secretary of State's office provide protection for Georgia consumers against telemarketing and other types of consumer fraud.

 

One of the best ways to protect yourself against scams is to arm yourself with information. Keeping up on the latest schemes will help you spot a thief and keep your assets safe. The Federal Trade Commission keeps an up-to-date database of financial fraud schemes, so if someone is asking you for money or information, check there first to see if you might be a target. According to the FTC, these are the most common types of financial scams:

 

Imposter scams. When someone contacts you asking for money or information, investigate before you act. Scammers might pose as a government official, someone you know, some you’ve met online, or someone telling you you’ve won a prize. If the person asks you to wire money for any reason-- to help someone in danger, to pay taxes or fees, to tide a relative over until their next paycheck-- they are likely trying to scam you out of money. Common imposter scams include:

• Tech support scams. A person calls out of the blue, saying they are from tech support and will need remote access to your computer to fix a virus on your computer. 

• IRS scams. Someone calls claiming to be from the IRS, claiming you owe taxes. The real IRS will not contact you by phone.

• Benefit scams. You get a robocall or phone call saying your Social Security or other benefits are going to be suspended. The real Social Security Administration will never call to threaten your benefit or ask you to send money.

• Online dating. You connect with someone online and then they ask you for money. Scammers will often spend a long time building trust before they ask for money for an emergency-- surgery, a plane ticket, etc. 

• Grandkid/relative scams. A person saying they are your grandkid, relative or a friend of a relative claims to be in trouble and need money. Sometimes the scammer will say that your loved one has been hurt or kidnapped. The number may appear to be from your loved one and the request may be convincing. This is often a scam. Hang up, call the number or another close family member to check on the claim. 

 

Health Care scams. Anytime someone calls claiming to be from a government agency, asking for information, be wary. Scammers might pose as Medicare or insurance officials, and ask for your Medicare number, Social Security number or insurance information. Hang up, and call Medicare or the company directly.

 

Prize scams. If you get a notification that you’ve won a prize, but that you need to pay a fee, taxes or customs to receive that prize, you are likely being scammed. Do not give out your credit card or bank information, or wire money to anyone who tells you that you’ve won something.

 

Home repair scams. If an individual approaches you about making repairs to your home and asks to be paid in cash or by wire transfer before any work begins, you should be suspicious. Ask for references and do not allow any work until you have a signed contract.

 

Money mule scams. If anyone asks to send you money and then wants you to send that money to another person, do not do it. This might be a money mule scam, where thieves are looking for innocent people to help move stolen money.

 

Work-from-home. Be wary of any work-from-home opportunity that requires you to pay money to earn money. This is often a scam.

 

Charity scams. If someone comes to your door, calls you or stops you on the street asking for money for charity, be cautious. If you are pressured to give money right away, say no, hang up or walk away.  A legitimate charity will give you information and allow you to make a decision later.

 

Phishing scams. You get an email asking you to verify your bank account, debit card number, Social Security number or password. DO NOT REPLY, even if it seems to be from a place you do business with.

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What are my rights and responsibilities?

You always have the right to hang up, delete an email, or walk away from someone asking you for money or information. You have the right to take the time to check out references, call back, or ask for identification. 

 

If you are a victim of a scam, you have the right to report the crime to the police. Even though financial fraud is illegal it often goes unreported. You are responsible for making reports to the correct agencies and keeping track of any information about the scam. 

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Contents

• How can I avoid scams?
• What can I do if I'm the victim of financial fraud?

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How can I avoid scams?

Financial fraud is a crime and as the victim of a crime it is never your fault. You cannot avoid being targeted by a scammer, but educating yourself on the latest scams can help you spot them. Taking these steps will make you less likely to lose money in a scam.

• Do not send money or give out personal information without investigating first. This is true even if the request seems like it is coming from a family member, the government, or someone else you trust.

  • Know that caller ID can be easily faked. Email addresses and social media can be easily hacked. Contact the person you think you are communicating with through another method.

  • Anyone who actually needs something from you will allow you to hang up and call back legitimate number.

  • If you hear from someone you haven’t talked to in a long time, out-of-the-blue, and they ask you for money, you are likely being scammed.

• Investigate online. Search for the company or situation and the word scam (ex. Social Security scam or grandchild money scam). You will be amazed how often the same scams are repeated over and over. 

• Always check references.

• Before you give money or information, talk to someone you trust first. Scammers get money by pressuring victims to act right away. 

• Hang up on robocalls. Robocalls trying to sell you something are illegal and are often a scam.

• Do not send money or pay for a service through a reloadable card, gift card or by wiring money. Legitimate businesses or government offices WILL NOT ask you to pay this way. If possible, use your credit card. Credit cards have built in fraud protection.

• Be very careful about someone who asks you to pay upfront without a contract. Many times scammers promising debt relief, credit and loan offers, mortgage assistance, or help starting a business will ask for money and then disappear.

• Do not deposit a check for someone and then give them money.

• If an offer or price seems too good to be true, be cautious. 

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What can I do if I’m the victim of financial fraud?

The reality is that it can be very hard to recover your money if you’ve been the victim of a financial scam. However, you should report the fraud to:

• Your local law enforcement agency. Report the fraud to the police. It is likely you are not the first victim and the more people that report the fraud, the more likely it will be that the scammers will be caught. At the very least, you must have a police report in order to file an insurance claim.

• A federal agency. If your complaint is with a business, report the fraud to the Federal Trade Commission. The FTC looks at patterns of fraud and warns other consumers of the latest schemes. Find out where to report other types of scams on USA.gov.

• Insurance or credit card companies. If your property was stolen or if your credit or debit card was used to pay a scammer, you may be able to recover some of that money through your insurance or credit card company.

 

Contact the credit bureaus. If you gave out any personal information, you might want to put a fraud alert or credit freeze on your report to prevent anyone from opening a credit account in your name.

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