Financial scams cost Americans over $10 billion in 2023, according to the FTC. The scams are getting better. Not better for you. Better at fooling you. AI-generated voices that sound like your family members. Spoofed phone numbers that match your bank’s real number. Phishing emails that are grammatically flawless. The old “Nigerian prince” template has been replaced by convincing imitations of companies you actually use.
The most common scams right now
Impersonation scams. Someone calls pretending to be from your bank, the IRS, Social Security Administration, or a tech company. They claim there’s a problem with your account, you owe taxes, your Social Security number has been compromised, or your computer has a virus. They need you to “verify” information (which means give them your information), make a payment (usually via gift card, wire transfer, or cryptocurrency), or download remote access software.
Your bank will never call you and ask for your full account number, PIN, or password. The IRS communicates through mail, not phone calls. No legitimate organization asks for payment via gift cards.
Phishing emails and texts. Messages that look like they come from Amazon, your bank, Netflix, or the USPS. They contain a link to a fake website that looks identical to the real one. You enter your login credentials and the scammer captures them.
Check the sender’s email address carefully. A message from “[email protected]” is not from Amazon. Don’t click links in unexpected emails. Go to the company’s website directly by typing the address in your browser.
Investment scams. “Guaranteed” returns, cryptocurrency “opportunities” from someone you met on social media, forex trading schemes. Anything promising high returns with no risk is a scam. Every legitimate investment involves risk. If someone guarantees returns, they’re lying.
Romance scams. Common on dating apps and social media. The scammer builds a relationship over weeks or months, then asks for money. Medical emergency, travel costs, investment opportunity. The amounts escalate over time. According to the FTC, romance scams had the highest median loss per victim of any scam category in 2023.
Red flags that apply to almost every scam
Urgency. “Act now or your account will be closed.” “You’ll be arrested if you don’t pay immediately.” “This offer expires in one hour.” Legitimate organizations don’t pressure you into immediate action. If someone is rushing you, they don’t want you to think. That’s the point.
Unusual payment methods. Wire transfers, cryptocurrency, gift cards, payment apps to someone you’ve never met. These methods are chosen because they’re hard or impossible to reverse. If someone asks you to pay in gift cards, it’s a scam. No exception.
Unsolicited contact. You didn’t ask to be contacted. They called you, emailed you, or messaged you first. Legitimate companies don’t cold-call you to report problems with your account. They send letters or secure messages through their app.
Requests for personal information. Social Security number, bank account number, credit card number, passwords, PINs. No company you already do business with needs you to “confirm” this information over the phone or email. They already have it.
Too good to be true offers. A job that pays $5,000 per week for simple work. An investment that returns 30% guaranteed. A prize from a contest you didn’t enter. If it sounds too good, it is.
What to do if you think you’ve been scammed
Contact your bank immediately. If you gave out account or card information, freeze the accounts. Request new cards. Change your passwords. The faster you act, the more likely the bank can reverse unauthorized transactions.
Report it. File a complaint with the FTC at ReportFraud.ftc.gov. If it involved a wire transfer, contact your bank’s fraud department. If it involved cryptocurrency, file with the FBI’s Internet Crime Complaint Center (IC3).
Place a fraud alert on your credit reports. Contact one of the three bureaus (Equifax, Experian, TransUnion) and they’re required to notify the other two. A fraud alert makes it harder for someone to open accounts in your name.
Consider a credit freeze. A freeze prevents anyone (including you) from opening new credit accounts until you lift it. It’s free to place and lift at all three bureaus. If your Social Security number was compromised, a freeze is the strongest protection available.
Ongoing protection
Use two-factor authentication on every financial account. Even if someone gets your password, they can’t log in without the second factor (usually a code sent to your phone).
Use unique passwords for every financial account. A password manager (Bitwarden is free, 1Password and LastPass are popular paid options) generates and stores unique passwords so you don’t have to remember them.
Check your credit reports at least once a year at AnnualCreditReport.com. Look for accounts you didn’t open. If you find any, dispute them and consider a freeze.
Be skeptical of any unsolicited communication that involves money, personal information, or urgency. The 30-second pause to verify whether a message is real has prevented more scam losses than any technology ever built.