Because of their omnipresence in our society, you’ve probably read about financial scams over the years. It’s important to keep in mind, though, that criminals put a lot of effort into developing fresh ways to defraud victims. New devious tricks pop up all the time, and staying safe requires continuously educating yourself about the latest tactics fraudsters use to scam.
In this first of a two-part series by Balance, you’ll learn about scams increasing in frequency and get tips for stonewalling the perpetrators.
With humanitarian crises ongoing around the globe, heart-wrenching images fill the news and social media. Unfortunately, criminals see these images, too. Their response is to craft appeals to help refugees fleeing war, famine, climate catastrophes, etc. The fraudster may pose as either an individual or a charity. Common themes in their messaging are a brutally sad backstory and an URGENT need for money.
Helping those legitimately in need is a beautiful thing, and there are plenty of opportunities to do so. If a particular cause tugs at your heartstrings, take time to do research online about nonprofits and NGOs working in that area. Charity Navigator and GuideStar are great sites for determining which philanthropic organizations are worthy of your hard-earned money.
The idea of working for a startup company is seductive; it’s exciting to think about laboring for a new venture that might provide wealth beyond your wildest dreams. However, because new companies are harder to find information on, fraudsters often list fake, well-paid positions online with their "startup." Then they'll ask applicants to send money for training courses, work-from-home equipment, or other bogus expenses.
There can be costs associated with starting a new job, but none of them should be billed to you by the prospective employer. Ask the person handling the hiring how to pay any necessary expenses directly instead of using their company as a go-between. If they refuse, let them know you’re not interested in the position.
If you’ve ever forgotten your password for a website, you’ve probably used a verification code or one-time password to get back into your account. In this particular scam, the criminal knows your email and is trying to use it to log in to a site to change your password and seize control of your account. They contact you via phone or email, letting you know that you will soon receive a verification code and that you need to share it with them to confirm your account. Of course, they're really using that verification code to intrude into your login and potentially lock you out.
You may have been taught to stop, drop and roll as a part of childhood fire safety. For scam safety, it’s important to remember to stop, drop and call. If you find yourself in a situation where an unverified entity is asking you to share personal information, stop yourself from handing out any sensitive details immediately. Next, drop the communication, be it via phone or the internet. Lastly, call the financial institution or company the person claims to be representing—at a number you know to be legitimate—to ask if the query is necessary.
This example is one of the most nefarious types of dishonest dealing because it involves transactions that are technically legal. Take, for example, the case of a resort vacation package offered on social media (this should already be a red flag). The price seems like a total steal, and the pictures of the luxurious destination seal the deal. You gladly pay the low fee and begin planning your dream getaway. What you didn’t realize is that almost all the costs are buried in the tiny legal-looking language you didn’t bother to read because who does? A variation is the "free trial," which has many hidden costs and is almost impossible to cancel.
As a rule, avoid shopping for travel on social media as much as possible. While honest companies offer deals there, it’s also—to borrow a line from Star Wars—a “wretched hive of scum and villainy.”
Where there are investments with the potential for large returns, scammers will surely follow. Cryptocurrency certainly prove that, with the Federal Trade Commission revealing that at least $80 million of fake crypto was sold in 2021. Digital currencies are a relatively new offering, so there aren’t a lot of established guidelines for safe investing. Some investment “opportunities” have proven to be nothing more than modern Ponzi schemes.
As with any type of investment, it’s crucial to take the time to understand what you’re getting into. One of the great myths of investing—perpetuated by crypto hucksters—is that “fortune favors the bold.” The reality of successful investing is that fortune favors those who take the time to research the marketplace fully they're considering entering.
While the particulars of scams are constantly evolving, the basics of informational and financial security remain the same. By slowing the process down and ensuring you're communicating with the people and companies you’re supposed to, you can keep your data secure and your money where it’s supposed to be.Learn more about how NCD CU can help
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