It can be tough to know who to trust these days — fraud is everywhere. That’s why it’s important to know how to spot a scam and what to do if you may have fallen for one. The following list isn’t comprehensive, but it should prepare you for some of the worst types of fraud out there.
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Tax-based scams can be especially frustrating for victims. As with several other scams, tax scams impose a sense of urgency that makes you more likely to jump to a decision. Instead of getting caught up in the false pressure, take a moment and think things through.
If you receive a phone call from someone threatening government action if you don’t immediately wire money for a “student tax” or other tax you’ve never heard of, hang up. If you want additional information, follow up with the IRS and re-familiarize yourself with their operating procedures.
The IRS will never call your personal phone to demand money, and they always provide alternative means to pay legitimate tax bills when they’re due.
In most cases, the intent of Census-related fraud is to secure personal information, up to and including access to financial accounts. Regrettably, Census fraud can be difficult to detect.
The official U.S. Census occurs every 10 years, but smaller surveys happen all the time to help the government track how tax revenue gets spent, among other things. If you receive an official-looking survey in the mail, it’s not necessarily a scam. You will need to look closer.
A real Census survey will include a postage-paid envelope. It will also provide the option to respond online, so make sure the address reads https://respond.census.gov. Some questions on the official Census forms may be personal in nature, and that’s to be expected. However, the official U.S. Census will never ask you to furnish your Social Security number, and you will not get any compensation to complete the survey.
If you have additional concerns, you can determine the legitimacy of any Census-related communication by calling the Census office closest to your home.
This is a common story: A stranger — either through email or in person — will promise you a large return on a meager investment. They will use high-pressure tactics to convince you to get in on the investment, including made-up time limits that make you believe you have to act fast or you will miss out. Legitimate investors understand and respect the fact that heavy investment decisions take time to consider. Don’t let anybody pressure you into making a financial decision you haven’t verified or are not comfortable with.
Charity scams can be particularly troublesome because they take advantage of your desire to help others and turn your good intentions into financial trouble. Notable types include natural disaster-related nonprofits and fly-by-night charities that spring up around the holiday season. Don’t let your compassionate nature make you a target. Do your research before donating to any charitable organization.
Next time someone tries to rally your pocketbook to their cause, ask them some simple questions. What’s the name of their organization, and how long have they been in operation? In plain language, what is their mission? What do they hope to accomplish and how can your money help them do it?
If they don’t have straightforward answers to these questions or have a poorly designed web presence — or none at all — it may be a scam. You can take advantage of additional resources to be sure, including Charity Navigator and Guide Star.
The theft of your child’s identity being stolen is a real worry for parents. Fraud of this type requires your child’s Social Security number, which you may give out more often than you realize. For instance, you likely provide your child’s Social Security number for things like health insurance forms, travel documents (such as a passport), or tax forms.
All parents should familiarize themselves with the warning signs of child identity theft. For instance, if your family has applied for benefits for a child and your application is denied on the grounds that payments are already being disbursed, you may already be affected. Limiting access to your child’s personally identifiable information is key to avoiding this type of fraud.
Keep a close eye on forms your child brings home from school — some of them may ask for information about your child. Fully understand how your school, and any other institutions they interact with, will use this information. Look for the phrase “opt out” and take advantage of it if you’re uncomfortable providing the requested information. Your record-keeping skills may be unimpeachable, but not everybody else’s are.
Additionally, be sure to inquire about your child’s credit report, if you haven’t already, when they turn 16. If one exists and it has errors, this is your chance to fix it before they make credit inquiries of their own for student or auto loans.
Another common scam is centered around advance fees. These scams often target college students and see fraudsters promising, among other things, lower rates on student loans. Taking advantage of these or other too-good-to-be-true offers usually requires you to pay an up-front fee to “secure” your place.
Here’s one way to tell if you’re being targeted by a less-than-honest loan company: their phone number. If you see a number beginning with 900, it’s a number you must pay a toll to connect with. No legitimate loan company will ask you to call a 900 number.
While 900 numbers are a red flag, keep in mind that not all scammers will use a 900 number. Many fraudsters will also use 800 numbers that look legitimate or are very close to an actual company’s phone number to trick you.
Just as it has made life easier, technology has presented us with new risks. These include unsolicited telephone calls promising “free trials” or “can’t-miss” investments using urgent language. Another technology-related scam includes claims your computer is “infected” with malware and offers to help “clean” it if you agree to download software or provide account passwords.
Skimmers are another way scammers use technology to their advantage. These small devices are typically found at ATMs, pay-at-the-pump gas stations, and even at retail point-of-sale machines. The devices collect data from your cards so the scammers can use the information for their own gain. If you see anything unusual or something that looks out of place, do not swipe your card. Instead, inform management immediately.
There are countless ways that scammers will try to gain access to your bank account or financial information. Because of this, it’s important to be vigilant at all times.
Common banking scams range from scammers giving you an unsolicited check that authorizes a purchase or loan application in your name when cashed, to free trials that come with an automatic debit to your account.
In general, be wary of emails requesting personal or account information, and do not provide your login credentials to anybody who asks — these are classic signs of banking fraud.
Knowing which behaviors make you a target for scams is the hardest part of the battle. From there, it’s a matter of exercising caution where your finances are concerned. If you take nothing for granted and know which questions to ask, you can keep your personal and financial information safe — and help your family do the same.
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