Posted by Income Taxes and Bookkeeping LLC

Top Financial Scams for 2022 & How to Avoid Them

Top Financial Scams for 2022 & How to Avoid Them

Some of these fraudsters want all your money in one transaction, and others want to gradually drain you over a long-term period. Here's how to avoid a financial scam.

Imagine your college-aged nephew calls, upset, scared, and begging you to send him money because he's stuck in some part of Mexico. You didn't even know he was outside the country. You hang up and try to contact his parents, but they are at work and not available. His voice didn't sound right, but he was scared. Because you are worried, you transfer the funds only to realize later in the day that he is perfectly fine and not in Mexico. This is one of these scammers' many methods to extort money from their victims.

Scams abound these days, all aimed at stealing your money, sometimes in the long run, sometimes in a single transaction. These are the last types of financial fraud to pay attention to.

Imposter Scams

According to the FTC (Federal Trade Commission's) Consumer Sentinel Network, fraud by fraudsters ranks number one in the grand scheme of scams. In 2021, impostor scams received $546.2 million from consumers. These scammers are looking for a business, government agency, or friend in need.

The biggest thing right now is an Amazon scam. You receive a message warning you of a large and potentially fraudulent purchase on your account: most of us will think someone hacked into our account and call back. This can result in various outcomes, including the scammer stealing your username and password after you log into your account for them, malware being downloaded onto your computer, or "tech support" being provided by remote access to the computer.

Sweepstakes or Lotteries

These are less common than impostor scams but still high level. You'll get a notification that you've won $1 million from a publisher's clearinghouse, and you just need to cover the cost of processing and taxes, and they'll send you the money. You will be required to send a check for $10,000.

The biggest red flag is that it's a scam any time someone asks you to pay something upfront to win. It is illegal to claim any type of payment upfront on lottery winnings or sweepstakes.

Online Romance 

This type of scam has been around for a long time, but they've evolved and grown. The report of this type of scam has tripled between 2016 and 2020. In 2020, these scams resulted in a loss of $304 million, up 50% from 2019, according to the Federal Trade Commission.

Scammers find you in dating apps, social media platforms, and online games. They request to be friends with you, to start a conversation, and to make you feel like they care, even if you're not looking for love.

Red flags: This person is believed to be living or working overseas or serving in the military overseas. They suggest logging into a private platform such as Google Hangouts. They confess their love quickly. They start asking for money to cover expenses like a plane ticket or emergency surgery.

Some victims have lost their life savings from this type of scam. The scammers are good at what they do, and it's usually the elderly who are the victims.

Think twice and hard before accepting a friend request from someone you don't know. Also, if their photo looks suspicious, do a reverse image search to see if it's associated with someone else. It can be a photo from a real estate ad.

Would you do me a favor?

Another form of deception by impostors is these scammers impersonate someone they know, such as the leader of the church. They send you text messages asking you to buy gift vouchers that they haven't had time to pick up, perhaps for a professional event or to receive a new family. They say they will refund you, but they need you to send photos of the front and back of the cards. Of course, you may want to help.

Result: The scammer withdraws the money from the card through the photos sent, and the money you paid is gone.

It's very difficult to always involve the inner skeptic, but we have to. In this case, verify the request by calling your religious leader or leader to confirm that the text was sent.

How to Avoid Scams

  • Change the way we talk about scams: Many people don't report scams or tell their families because they feel humiliated and ashamed of having "fallen into it." Assure them that they were victims of a financial crime and that it was not their fault. "Don't say 'how much money did you give him?' Say, "I'm sorry this happened; how much money was stolen from you?".

  • Create a rejected script: Write a standard reply to post next to your phone. "It can be as simple as 'I don't do business over the phone.'" Even if you don't do it out of habit, your parents or grandparents might do it out of reflex. Help them create a rejection script that they will use.

  • Discuss scams with your friends and family: Anyone can be a victim, but the elderly are particular and financially vulnerable targets. They may not be aware of the latest techniques. Talk about scams you've come across to help everyone stay alert.

  • Don't answer the phone: Let your voicemail do the work. Answering the phone tells the caller that your number is active, an "active number." The more you respond or interact, the more calls you will receive.

  • Don't click on links you receive in a text or email: When you receive phishing emails or messages, take a look at the source email address, it is always fake. To check for suspicious activity on your account, log into sites like Amazon or your credit card issuer to verify if it occurred. Or call your local UPS branch to see if you really have a package waiting.

  • End the communication: If you think you're the target of a romance scam, stop all communication, don't send money, and check with someone you trust to see if they think it is suspicious.



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