7 Moves Savvy People Like You Make To Avoid Financial Fraud
Written by
Vance Cariaga
Edited by
Travis Woods
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Even if you have never lost money to financial fraud, chances are you’ve been targeted by scammers on multiple occasions. It might come in the form of an email or text message targeting you personally, or a widespread computer hack in which millions of financial accounts have been compromised — including yours.
Data from the Federal Trade Commission found that U.S. consumers reported losing more than $10 billion to fraud in 2023. That represented a new record for fraud losses and a gain of 14% from the prior year. Investment scams alone totaled more than $4.6 billion, according to the FTC. Imposter scams resulted in nearly $2.7 billion in losses.
One reason financial fraud is on the rise — and the reason it is expected to keep rising in coming years — is that scammers are making use of increasingly sophisticated tools and technology.
“Digital tools are making it easier than ever to target hard-working Americans, and we see the effects of that in the data we’re releasing today,” Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said in a February 2024 press release.
A recent GOBankingRates survey of 1,141 U.S. adults found that more than four in 10 of those polled have been victims of some type of fraud. For those who have been victims, here’s a breakdown of the type of fraud they experienced:
- Financial (stolen credit/debit card, bank account numbers or Social Security number): 76.43%
- Medical (stolen name and health insurance information): 17.62%
- Criminal (stolen license or other state-issued ID): 22.43%
- Synthetic (stolen birthdate, address or SSN): 16.25%
- Child identity (child’s name stolen to commit financial fraud): 5.03%
The best way to avoid financial fraud is to learn how scammers operate and then take steps to protect yourself. Here are seven moves savvy people make to avoid financial fraud, according to the Consumer Financial Protection Bureau.
- Keep your sensitive data secret. Don’t share numbers or passwords for your financial accounts, credit cards or Social Security account.
- Never pay upfront for a promised prize. It’s probably a scam if you’re told you must pay fees or taxes to receive a prize or other financial windfall.
- Vet sales pitches. After hearing a sales pitch, ask for information in writing and then read the fine print carefully.
- Be wary of deals that sound too good to be true. If someone offers you a deal that is much better than what’s being offered elsewhere for a similar good or service, it’s a red flag. If it sounds too good to be true, it probably is.
- Avoid deals that are only “good today” and that pressure you to act quickly. If you run into high-pressure sales tactics that don’t give you enough time to read a contract or get legal advice before signing, you’re better off walking away from it.
- Don’t click on links or scan QR codes. These can take you to scammers’ malicious websites or give them access to your device.
- Put your number on the National Do Not Call Registry. You can do this by visiting www.donotcall.gov or calling (888) 382-1222. When you block unwanted sales calls, you also block potential scams.
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