Key Takeaways:
Online scams are growing more sophisticated, so protecting your finances now requires constant awareness, skepticism, and proactive security habits.
Common red flags include urgent requests for money, threats of account suspension, or payment demands via gift cards or wire transfers.
To stay safe, never share personal details from unsolicited messages, verify all links and contacts independently, and report fraud to the FTC.
It wasn't that long ago when our money and assets were safe, at least there was a high degree of perceived safety.
Investment accounts were secured by SIPC insurance. The same could be said about FDIC-insured bank accounts. And, if you spotted a fraudulent charge on your credit card, all that was required was a quick phone call to the number on the back of your card, and it was removed.
Sure, there were fraudsters and scammers, but potential access to your personal finances was much more limited.
Those same SIPC, FDIC, and credit card protections remain in place today. Unfortunately, the advent of the Internet, social media, and a global reach has led to a proliferation of scams that can quickly deliver a knockout blow to your savings.
While you need not be in a perpetual state of readiness, a healthy level of vigilance and skepticism can go a long way. It will protect your savings and prevent you from becoming a victim of fraud.
4 Tips to Spot a Scam
How can you avoid becoming a victim? The Federal Trade Commission offers these 4 tips on how to spot a scam:
- Scammers PRETEND to be from an organization you know. They may claim to be from the Social Security Administration, the IRS, a bank, a well-known company such as PayPal, Netflix, or Amazon, or even your local utility company. Never give someone your password, bank information, PIN, social security number, or personal identifying information. Never settle a debt or problem over the phone from an unexpected call that came your way. Many solicitors are scammers looking for money. If you pay these criminals, they will come back in a short period of time, claiming another discrepancy was found and another payment is needed.
- Scammers say there's a PROBLEM or a PRIZE. You've won a big prize, just a good faith down payment to receive your winnings. If you do, you'll never see that money again.
- Scammers PRESSURE you to act immediately. Whether a scammer or salesperson, pressure to act immediately is a red flag. Hang up the phone. You are in control. Don't cede that control to someone else.
- Scammers tell you to PAY in a specific way. They may insist you send money through a money transfer company or put money on a gift card. Then, they will ask you to give them the number on the back of the gift card. Or, someone will send you a check, request you to deposit it, and ask you to send them some of the money. That check will bounce after you've delivered the cash to the scammer.
Major scams targeting older Americans
Older adults lost $600 million to fraud in 2020, when the pandemic fueled spikes in almost all top categories of fraud, according to federal officials, as reported by the American Association of Retired Persons.
Whether it is Zoom phishing emails, Covid-19 vax card scams, phony online websites, or romance scams, please be wary when you venture online or on social media sites. Recently, the AARP highlighted some of the avenues fraudsters use to take your money.
For example, “You receive an email, text, or social media message with the Zoom logo, telling you to click on a link because your account is suspended or you missed a meeting,” says Katherine Hutt, national spokesperson for the Better Business Bureau. “Clicking can allow criminals to download malicious software onto your computer.”
Others will exploit what might be called the flavor of the month or topic of the day. Recently, the government said it will offer free COVID-19 test kits. You can obtain yours at covidtests.gov/. The site takes you directly to special.usps.com/testkits to order.
But criminals attempt to impersonate these sites by adding a few letters or a word like “free” within the link. The link appears legit, but it’s not. The fraudulent site will encourage you to divulge personal information.
While we won’t touch on every scam, we wanted to highlight romance scams, which led the way in 2020.
According to AARP, the scam works like this: You place your profile on an online dating site, and a potential partner entices you with his or her charm, intelligence, and good looks. But you don’t live in the same city or state. Though you become attached, you never seem to be able to meet this person. Eventually, an emergency, business crisis, or some type of problem “unexpectedly” surfaces, and you are asked to send money.
Give them cash, and they will continue to prey on you until you figure it out. It seems obvious, but never underestimate how easily you can be tricked when love and your emotions are in play.
Federal Trade Commission Tips to Avoid Being Defrauded
Avoid being defrauded by following several commonsense tips offered by the Federal Trade Commission.
- Block unwanted calls and text messages
- Don't give your personal or financial information in response to a request that you didn't expect. Legitimate organizations won't call, e-mail, or text to ask for your personal information.
- Do not click on any links, even if you get an email or text message from a company you do business with, and you think it is real. Instead, contact them using a website you know is trustworthy. Don't call the number they provide or the number from your caller ID.
- Resist the pressure to act immediately. Legitimate businesses will give you time to make a decision.
- Know how scammers tell you to pay. Never pay someone who insists you pay with a gift card, by using a money transfer service, or by setting up a PayPal account. Additionally, never deposit a check and send money back to someone.
- Stop and talk to someone you trust.
Finally, avoid the temptation of telling a scammer what you think of him or her. In researching this article, I came across those who regretted such action. Yes, they may have been an ocean away from the scammer, but that didn’t prevent a vindictive fraudster from placing the victim’s phone number on numerous fake ads or overwhelming them with robocalls.
Remember, they are sophisticated criminals who have access to the latest technology.
If, unfortunately, you find you have become a victim, you can report the incident to the FTC at https://reportfraud.ftc.gov/#/
Just remember: Delete suspicious emails, ignore suspicious texts, hang up, and don’t argue with scammers
I trust you’ve found this review to be educational and helpful. If you have any questions or would like to discuss our wealth management services, please feel free to contact us.
As always, I’m honored and humbled that you have given me the opportunity to serve as your financial advisor.
John Gigliello, CFP®
John Gigliello, CFP®, is a fee-based fiduciary financial planner in Albany, NY, serving individuals age 50+ with comprehensive planning and investment management, centered around proactive and advanced tax planning. John earned a Certificate in Financial Planning from Boston University and, more recently, successfully completed the rigorous CFP® Certification examination to become a CERTIFIED FINANCIAL PLANNER™. John earned the Accredited Investment Fiduciary® Designation from the Center for Fiduciary Studies®, the standards-setting body for Fi360. The AIF® designation signifies specialized knowledge of fiduciary responsibility and the ability to implement policies and procedures that meet a defined standard of care. John currently serves on the Albany County Investment Advisory Board, having been appointed by a unanimous vote of the County Legislature in January 2019. In this position, John advises the county on a strategy for making the best use of money available for investment.