Preventing Financial Scams and Fraud

Preventing Financial Scams and Fraud

By Carrin Wester
Financial Advisor

Personal stories of financial scams impacting our friends, family and coworkers are commonplace today. According to a recent CNBC article, “in 2022 Americans reportedly lost almost $40 billion dollars to phone scams alone.”

Fraudsters are employing increasingly more sophisticated strategies, so it’s important to be vigilant and aware of the tactics they are using. Here are a few financial scams to look out for and tips to prevent falling victim to these scams.

Phishing Scams
These types of scams are typically initiated online or via text, where the scammer poses as a business that you know and trust. Phishing attempts can look authentic and seem believable, often using legitimate looking company logos and login links sent via email and other communication channels. After directing you to login to your account, scammers aim to steal your personal information or login credentials for your financial or social media accounts.

Tips to prevent fraud: Only click on links you trust. If someone sends a suspicious or unsolicited link, even if it is from a family member or friend, make sure you verify it before clicking on it. You can do this by calling the company or person directly. Always check the sender’s email address as it’s common to see misspellings and other errors in an email address, which can indicate fraudulent activity.

Imposter Scams
Imposter scams have become more common with the use of voice technology. Fraudsters can now call you, using a voice recording of someone you know, including your child or parent. Often, these calls are requests for money or gift cards, and are urgent in nature. For example, they may say they are in trouble and need a large amount of cash to get out of the situation. These voice recordings can sound almost exactly like the person they are impersonating.

Tips to prevent fraud: If you receive a believable call like this, you can ask a personal question that only you and the caller would be able to answer, to verify the identity of the caller.

Charity Scams
Be aware of charity scams around the holidays or during times of natural disaster. Fraudsters will try to trick you into thinking they are a legitimate charity organization in order to obtain money or personal information from you. Be wary of any charity reaching out to ask about a pledge you’ve already made or asking you to act quickly.

Tips to prevent fraud: Ask questions of the charity, and for them to provide their contact information and EIN (Employer Identification Number). Verify this information against what is listed on their website. When in doubt, don’t give any personal information out.

These are just a few of the most common scams you should be aware of. By continually educating yourself, you can help prevent becoming a victim of these situations and others. Stay up-to-date with common scams and prevention tips through the Consumer Financial Protection Bureau. And remember, even if you have the slightest doubt, it’s best to verify before you pass on any sensitive, personal information.

Carrin Wester is a registered financial advisor with an enthusiastic commitment to helping people achieve their financial wellbeing goals. She is committed to enhancing communication, service, and investment management with The Arlington Group’s clients.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. The Arlington Group Investment Consulting, LLC is a separate entity from WFAFN.