The Rise of Financial Scams, and How to Protect Yourself
When it comes to financial markets and investment strategies, we term these as our “zone of genius” here at Truman Wealth. We’re here to help you build – and keep – your wealth. And a big part of that means understanding how to protect what you have.
But with technology developing at an ever-increasing speed, so too are financial scams. Every year we are seeing fraudulent criminals grow more and more sophisticated – and sadly, more successful. In fact, in America alone more than $10 billion was lost to fraud in 2023, marking a 14% increase from 2022. Of this, more than $4.6 billion was lost to investment scams – more than any other category. This represents a staggering 21% increase over 2022.
The second highest reported loss came from imposter scams. This is where people may falsely claim to be a romantic interest, the government, a relative in distress, a well-known business or a technical support expert etc. Last year alone, these fraudsters scammed their way into nearly $2.7 billion.
And trust me, we are not ones to fearmonger here on the Truman team… in fact, anyone who knows us will tell you that we lean heavily towards the optimistic, definitely glass half full outlook on life, but we also believe that knowledge is power, and prevention is better than cure. So with this in mind, how can we help you protect yourself, your parents and loved ones as the rise in scams increases, and their deceptive tactics grow ever more artful?
Knowledge is Power
When it comes to avoiding the scam artists, there really is no better tool at your disposal than knowledge. Educating yourself on common scams and fraudster methods is essential to knowing what to look out for. Seven key signs of a scam to beware of are:
#1. Scammers pretend to be from a familiar organization or agency
For example this could be the IRS, Medicare, or the Social Security Administration. They may email attachments with official-looking logos, seals, signatures, or pictures of employee credentials. They also use technology to change the phone number that appears on your caller ID. So the name and number you see might not be real.
#2. Scammers mention a problem or a prize
They may say your Social Security number was involved in a crime or that you’re in trouble with the government. Or you owe money. Or someone in your family had an emergency. Or that there’s a virus on your computer. Some scammers say there’s a problem with one of your accounts and that you need to verify some information. Others will say you won money but have to pay a fee to get it.
#3. Scammers ask for your personal information
Scammers often pose as banks, health care providers and government officials asking for identifying personal or financial information. Anytime someone asks you for this information, be suspicious. Never give out your details.
#4. Scammers pressure you to act immediately
One of the most popular scamming methods is contacting you by phone and telling you that you owe a tax bill and demanding payment (Please note, the IRS will never contact you by phone and will only contact you exclusively via mail).
They may threaten you with arrest or legal action. They might say your computer is about to be corrupted. Scammers want you to act before you have time to think. If you’re on the phone, they might tell you not to hang up so you can’t check out their story.
#5. Scammers are specific about how they want you to pay
They might tell you to pay using a gift card, prepaid debit card, cryptocurrency, wire or money transfer, payment app or by mailing cash. They may also tell you to transfer your money to a “safe” account. Some will send you a check (that will later turn out to be fake), then tell you to deposit it and send them money.
#6. Scammers tell you to keep it “secret”
By asking you to keep a transaction secret, scammers know you won’t have to respond to questions from family and friends who might see through the scam. Check with someone you trust before acting.
#7. Scammers make it sound too good to be true
If it seems too good to be true, it probably is! Above all, use this simple mantra to help you detect and avoid scams. It’s always better to be cautious than to be a victim.
How to Protect Yourself from Scammers
Pause and Reflect
Fraudsters prey on fear and urgency, hoping to trigger a knee-jerk emotional reaction from victims. The best way to protect yourself against imposter scams is by taking a moment to pause and reflect, then verify that the communication is genuine.
If you get an email or text message from a company you do business with and you think it’s real, it’s still best not to click on any links. Resist the pressure to act immediately. Honest businesses will give you time to make a decision. Anyone who pressures you to pay or give them your personal information is a scammer.
Always Initiate Your Own Contact
If you get a text, alert, pop up, email or anything that conveys urgency; stop and don’t click on it. Instead, contact them using a website you know is trustworthy. Or look up their phone number. Don’t call a number they gave you or the number from your caller ID.
NEVER Give Out Personal Information
Don’t give your personal, business or financial information in response to a request that you didn’t expect. Genuine organizations won’t call, email, or text to ask for your personal information, like your Social Security, bank account, or credit card numbers.
Build In Extra Protection
Learn how to protect your data with this security to-do list. Add in additional layers of protections at financial institutions, such as someone who has to be called if you withdraw over a certain dollar amount – banks have to record withdrawals of more than $10,000 of cash, but they don’t stop them from happening. If you’re a business owner, consider taking out cyber liability insurance.
Have a Support Network
Call someone you trust immediately – a family member, friend, or your financial advisor. Looping in someone else who cares about you is the best way to protect yourself against getting scammed.
Block Unwanted Calls and Text Messages
A useful protective measure to take, or help set up for your elderly loved ones or friends, is to block unwanted calls and to filter unwanted text messages.
How to Report a Suspected Scam
The key when it comes to reporting a scam, is to act fast. The quicker you can take action, the better chance you have of securing your information, or reversing any payments you might have made.
If you were scammed or think you saw a scam, tell the FTC at ReportFraud.ftc.gov. When you report a scam, the FTC can use the information to build cases against scammers, spot trends, educate the public, and share data about what is happening in your community.
If you gave personal information, go to IdentityTheft.gov to see what steps to take, including how to monitor your credit. Report Social Security-related scams to the SSA Office of the Inspector General (OIG). You can report a Social Security scam here, and visit www.ssa.gov/scam for more information.
If a fraudster is claiming you owe taxes, but you have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.
If you have already sent money to a scam artist, contact the company through which you made the payment – be that an app, wire transfer, bank transfer, cryptocurrency, cash or check. Explain what has happened, and see if the payment can be stopped or reversed.
A Professional Support Team Can Help
It’s not easy navigating a complex modern world, especially for older generations. New developments and ever-changing technology can leave you feeling confused, and vulnerable. That’s when working with a financial expert can really help. We’re here to help provide confidence and security, and serve as a sounding board you can always rely on. As fiduciaries, we are legally bound to always work to protect YOUR best interests, not our own. It’s a core ethic we take incredibly seriously.
If you’d like to chat with us about how we can help you protect your assets or those of a parent or loved one, please do get in touch. The first step towards building protection against financial fraud starts here.
