Protect Yourself from Financial Scams: 9 Strategies
Data breaches, identity theft, phishing attacks—financial scams are far too common.
In 2020, consumers lost over $3.3 billion to fraud, compared to just $1.8 billion in 2019. And if this data from the Federal Trade Commission (FTC) is any indication, it’s become more than ever important to protect yourself from financial scams.
But how? Year after year, fraudsters introduce thousands of scams in an attempt to steal strangers’ money. Last year alone, U.S. consumers filed 2.1 million fraud reports with the FTC. Technological innovations give cybercriminals new tools with which to steal unsuspecting people’s financial info.
Yet with these nine strategies, you can avoid falling victim to a financial scam:
1. Never wire money to a stranger.
Did someone reach out and ask you to wire them money? Well, think again.
And while you’re at it, avoid sending money with a prepaid debit card or gift card—both of which are about as traceable as cash. If someone reaches out and requests a payment via wire transfer or card, you should absolutely proceed with caution. Ask them why they’re reaching out, and if you so much as think they might be a legitimate source, ask for proof of identity. Also, consider suggesting an alternative payment method for an added layer of protection.
2. Resist the urge to open suspicious links or attachments.
Do you read your junk mail? How about seemingly urgent emails that may or may not be authentic?
A word of warning: If you receive an email from a stranger requesting that you open an attachment or link, you’ll almost certainly want to check in with the source (or simply press that “delete” button). Even if the email looks like it came from your bank, it’s very likely a common financial scam known as pharming. If you’re truly concerned it could be legitimate, reach out to the source directly by phone. Above all else, leave those links alone until you’re sure they’re real—and don’t pay up until you know for sure.
3. Make sure all online purchases are secure.
Most people shop online nowadays. And while the practice is more common than ever, you’ll still want to take a secure approach.
The best way to do this is to—you guessed it—make sure your online purchases are secure. Start by looking for the “https” in your URL (the s stands for “secure”), followed by the lock icon in your address bar. (You can guess what that stands for.) To go the extra mile, you can see what the Better Business Bureau has to say about the company. From there, go to the business’s URL, and confirm there’s a brick-and-mortar address and working phone number listed on their site.
4. Double-check your social media privacy settings.
We don’t want to scare you. We do, however, want to be realistic. And the truth is that many fraudsters get information on their targets from social media.
The moral of the story is this: Check your privacy settings across all your online accounts. Make sure you aren’t oversharing, or that you aren’t giving away more personal information than you ought to be revealing. You’ll also want to make sure your interactions with friends and family are more or less untraceable, which will keep malicious people from posing as someone you know.
5. Don’t share your social security number via email.
Your social security number is yours and yours alone.
Granted, you’ll be asked to share it every once in a while. You won’t however, be asked to provide it via email from a suspicious address or website. Legitimate businesses almost never ask for this information, and it’s highly unlikely they would ever request it via email. If you receive something demanding that nine-digit figure, know that it’s almost certainly a scam. In other words, keep it to yourself!
6. Or any of your financial details, for that matter.
Know what we just said about your social security number? The same thing applies to your financial information.
From your credit card number to your bank account details, be discreet. Keep your sensitive financial info private—especially with people or businesses you don’t actually know. While some scammers may claim to be from a legitimate retailer, financial institution, or government body, these are almost certainly phishing scammers hoping to trick you into giving away your money. (In other words, don’t do it!)
7. Update your passwords.
Remember the year 2000, when everyone and their mother created passwords along the lines of “abc123” or “password1”?
Fast-forward a couple decades, and these combinations likely seem pretty ridiculous. Already, it’s super-easy for hackers to crack passwords that consist of easy numbers or a beloved pet name. As a rule of thumb, you should update your passwords on a regular basis—with each one featuring both lower and uppercase letters, numbers, and special characters. Bonus points if you opt for eight-character or even longer combinations.
8. Research charities before making a donation.
Donating to charity is all well and good—so long as the charity in question isn’t a scam artist in disguise.
Here’s the deal: If you receive a call or email solicitation for donations, do some research before you grab your wallet. Some scammers go all out and actually create fake charities in order to steal innocent people’s credit card info. So, see to it that you only make legitimate donations by taking a step back—and, ideally, by searching for actual tax-exempt organizations on the Internal Revenue Service (IRS) website.
9. Resist the urge to act immediately.
You know the saying “think before you act”? Well, scammers want you to act before you think.
We’re here to tell you—don’t do it. If you’re on the phone, don’t be afraid to hang up. If you’re reading a bogus email, don’t hesitate to drag the message to your trash folder.
Some scammers will make empty threats—to arrest you, to take away your car or business license or anything else they might think of—if you don’t comply with their wishes, which is all the more reason not to give them your money.
With that, proceed with caution if ever you think you’re dealing with a scammer. And note that in light of the 2020 scam spike, the FTC introduced a new platform called ReportFraud.ftc.gov, which lets the public file reports directly on the agency’s website. The FTC uses many of these reports as a starting point for police investigations—going so far as to share this information with 2,800 law enforcement users nationwide.
Curious about the scam reports from this past year? A full breakdown for 2020 is available directly on the FTC’s data analysis website. Hopefully, these insights will shed some light on how common financial scams have become—giving you a leg up in protecting yourself from falling victim to them.
With the above tools in your arsenal, you can keep fraudsters away and truly protect your financial info.
Have questions or comments about protecting yourself from financial scams? Interested in learning more about the security services available at our firm? Please contact us to book your complimentary consultation, and someone from the Umbrella team will get back to you shortly.