You might think you’re savvy enough to not get duped, but more and more people are falling victim to bank scams, identity theft, online fraud and similar crimes. Identity fraud hit an all-time high in 2017, according to a report from Javelin Strategy & Research: $16.8 billion was taken from 16.7 million victims last year. Arm yourself with information against scammers, so you can know what to avoid and how to protect yourself.
Click through to learn about some of the biggest money scams of all time, and find out what to avoid so you don’t become a victim.
Scam No. 1: Phony Debt Collectors
This money scam involves phone callers claiming you owe money for a non-existent bill. The caller demands immediate payment, often using the name of a large company — like Visa or Mastercard — with which you have legitimate dealings.
They might have your personal information, obtained via identity theft, so don’t assume they’re legitimate just because they know details like your address and Social Security number.
Avoid providing personal information over the phone, especially if you aren’t the one who initiated the call.
Learn how to find out if you really have debt in collections.
Scam No. 2: Bogus Tech Support
The elderly are particularly susceptible to this type of fraud, as are people who aren’t familiar with computers — and they get lured in by fake tech support. The scammer might call you, or you might see a pop-up warning about viruses instructing you to call.
“It appears to come from a well-known company,” said Ron Long, head of Regulatory Affairs and Elder Client Initiatives at Wells Fargo Advisors. “The service provider might request to access your computer, allowing them to see everything on it. In some cases, they might even ask for your credit card number, claiming they need it to fix your computer, when likely they have installed the malware and pocketed the cash.”
Get tech support only from trusted, official sources.
Scam No. 3: Untrustworthy Home Repairs
Home repair scams happen when workers take a deposit for work and disappear, or perform a substandard job. These money scams also involve quoting a cheap price up front, then demanding hundreds or thousands of additional dollars when the work is done. They might show up at your door randomly — or might target you specifically if your spouse recently died, as they check probate court records.
Do careful research to make sure the people you’re hiring for home repairs are reputable and have a good track record.
Save Without Getting Scammed: How You Can Get These 6 Expensive Services for Less
Scam No. 4: Magazine Sales Scams
Magazine sales calls at your door or over the phone might be a ruse to get your credit card or bank information, trick you into paying for a non-existent subscription, or lock you into an overpriced long-term subscription. Traveling sales crews might even steal from your home if you let them inside.
Avoid this scam by shopping around for subscription prices and ordering directly from the publisher.
Scam No. 5: Fake Lottery or Sweepstakes Winnings
It’s exciting to think you’ve won millions of dollars like the lucky Publisher’s Clearinghouse winners you see on TV. Unfortunately, that phone call claiming you’re a big sweepstakes winner is probably a money scam.
“With these money scams, a con artist will call the victim and say they won a huge sum of money but have to pay a fee to facilitate the earnings,” said Justin Lavelle, Chief Communications Director at Been Verified. “Once the scammer receives the wired money, they disappear.”
Bottom line: Never pay money in order to receive a prize.
Scam No. 6: ‘Catfishing’ or Phony Romance Scams
Lonely widowers, divorcees or singletons might look for love online. Seth Ruden, senior fraud consultant at ACI Worldwide, said that opens these romantic hopefuls up to romance scams, which he calls “one of the most novel social engineering typologies out there.”
“Typical of a romance scam is a charming individual developing a long-term long-distance relationship with their victim,” Ruden said. They do this before requesting a large sum of money to help with an emergency, travel or other empathy-inducing incidents.” The scammer then milks as much money as possible — and finally disappears.
Don’t let emotions override common sense; be wary of giving money to anyone you don’t know well.
Scam No. 7: The Grandparent Scam
If you have grandchildren, your first instinct is to help them if they’re in trouble.
“This scam preys on that generosity and love a grandparent often has for their family,” said Long. “Knowing that many grandparents and grandchildren only connect a few times a year, the perpetrator will call and impersonate a grandchild, requesting emergency funds. He’ll say he lost his wallet, has been in an accident, or is in jail and needs a bond, explicitly asking the victim to not tell his mom and dad. The impersonator gives the grandparent directions to wire money — typically somewhere that requires no identification to collect.”
Don’t wire money to anyone you can’t confirm is the actual person you think you’re sending funds to.
Scam No. 8: Fraudulent Charity Solicitations
Scammers on the phone or at your door might pretend to be linked to your local police or firefighters or claim to collect for veterans’ organizations to make you believe that giving them money supports a worthy cause. In reality, charities might get only a small percentage of your donation — or receive nothing at all — because the solicitors keep all of the funds.
Research charities through Charity Navigator or Charity Watch before donating any money.
Scam No. 9: Medical and Medicare Fraud
Telemarketers run scams offering unneeded medical devices for which they bill Medicare and doctor’s offices — sometimes pressuring patients to authorize equipment they don’t need.
Callers also misrepresent their products, like those who claim to offer a free medical alert system — bundled with hefty monthly monitoring fees.
Avoid purchasing medical products over the phone; do research to verify the legitimacy of these offers and whether you need the items.
Are You Guilty? 7 Ways You’re Accidentally Committing Tax Fraud
Scam No. 10: Craigslist Sales Scams
Sales sites such as Craigslist, OfferUp and Facebook Marketplace offer thrifty people the opportunity to turn their trash into some cash. Sadly, many who turn to Craigslist and other sites to sell furnishings and household goods encounter online fraud. Scammers claiming to be in another state or country offer to purchase an item, then send a fraudulent check and get you to wire part of the money back for supposed shipping charges before it bounces.
Prevent this by dealing with local buyers only.
Scam No. 11: Part-Time Job Scams
Some scams target stay-at-home moms and people hoping to supplement Social Security benefits with part-time work by advertising non-existent jobs and sending fraudulent checks.
For example, the secret shopper scam asks victims to cash the check and use the funds to wire money to test Western Union’s customer service. The check bounces and the victim is then liable for the money, which went to the scammer or an accomplice.
Don’t wire money to anyone you don’t personally know, and don’t cash checks from strangers, either.
Scam No. 12: Phishing Phone Calls and Emails
Scammers try to fool victims into giving their credit card numbers over the phone or online under a variety of pretexts. For example, they claim to be able to lower the victim’s interest rate, then charge the credit card without performing any services or use it for their own fraudulent purposes.
You can avoid falling victim to this scam by never giving out your credit card number over the phone.
Scam No. 13: Prescription Drug Scams
People looking to save money on expensive prescriptions can fall for fraudulent websites claiming to sell their necessary medications online for less. At best, you waste your money on ineffective pills — and at worst you could get ill from taking an unknown substance.
Only purchase medication from legitimate sources — research the company or website that’s offering you a deal, to make sure it’s not fraudulent.
Scam No. 14: Fake IRS Calls
This scam operates on the pretense of someone claiming they’re from the IRS telling a senior that they owe back taxes.
“The caller then informs the citizen that if they do not pay, the police will come to their home and arrest them,” said Patrick Simasko, elder law attorney and wealth preservation specialist at Simasko Law. “The caller will then ask for money and demand that the payment is in the form of gift cards.”
Never provide payment — in any form — over the phone, especially from anyone claiming to be with the IRS. “First and foremost the IRS never calls — and they will never ask for a tax payment with gift cards,” Simasko said.
Learn: How to Spot IRS Scams
Scam No. 15: Debt Collectors Demanding Payment for Deceased Relatives’ Debt
People who lose a spouse or other close relative might be targeted by debt collectors demanding payment of the deceased person’s bills.
What they don’t say is that spouses and relatives often aren’t personally responsible for those debts. Typically, those debts are the estate’s obligation — with a few exceptions.
Avoid this scam by understanding your rights and legal obligations.
Scam No. 16: The ‘Yes’ Scam
Saying “yes” to a phone caller after a seemingly innocent question like “Is this so-and-so?” or “Can you hear me?” can lead to money scams, according to Wade Rasmussen, president of Amerifund.
“The scammer will record the victim’s answer and use the recorded voice-print of the victim saying ‘yes,’ to authorize fraudulent activity,” Rasmussen said. “Answer such questions from phone numbers you don’t recognize by repeating the affirming question in your answer, instead of saying yes. For example, answer the questions with ‘I can hear you’ or ‘Who might I ask is calling?'”
Scam No. 17: Emails Containing Malware
Ruden said people might receive emails that look like they are from legitimate senders — like a package delivery company — and have links on them that resemble notifications sent by the legitimate entity.
“If you didn’t order anything, the email might be sent by an imposter looking to infect your computer with malware,” he said. “Look for evidence in the webpage address or for bad grammar in the text body to confirm the illegitimacy of the source.”
Scam No. 18: Cryptocurrency Money Scams
People who want to supplement their savings might want to explore the cryptocurrency market, but Steve Razinski of I’ve Tried That, a resource for information on scams, warned that doing so makes them vulnerable to money scams.
The scammers claim that “a secret new algorithm has been released that will guarantee it can pick winning trades or ‘the next Bitcoin’ with 99.9 percent accuracy,” said Razinski . “It’s all a ploy to get you to deposit $500 into an overseas brokerage,” he said. “The software, if it even loads, usually performs worse than a coin flip.”
Exercise extreme caution when dealing with cryptocurrency, and research any new methods you find — or that find you — to confirm their legitimacy.
About the Author
Barb Nefer has been writing professionally for nearly 30 years, cutting her teeth as a news writer for the Daily Southtown in Chicago. She’s a doctor of psychology, and her eclectic expertise includes personal finance, psychology, travel and the pet industry. Her work reflects that diversity, with pieces appearing in places like About.com, CBS Local, Yahoo.com, WebPsychology, and Animal Wellness magazine.