Covid-19 wreaked havoc on our financial system, touching off a host of new and sophisticated scams. Many Americans are isolated from friends and family; some have lost their jobs and their lives. Collectively, we are hurting as a nation, and where’s there’s vulnerability, there are criminals ready and willing to take advantage.
The Federal Trade Commission, or FTC, reported over 2.2 million cases of fraud in 2020. This year, experts predict that number to increase. Covid-19 scams, unemployment/stimulus fraud, and Newsletter cons are just a few ways thieves seek to capitalize and steal your finances. For a complete list of current scams to watch out for, click here.
According to the FTC’s website, there are four common signs of a scam.
Scammers pretend to be from an organization you know – or they impersonate a person you trust:
Scammers will use technology to change phone numbers and hack into Social Media accounts, creating the illusion of familiarity and trust. As a good rule of thumb, follow your intuition and always ask questions. If a friend contacts you on Facebook with a financial offer, verify their identity by asking a personal question only the two of you know: what was the name of the family dog we had in high school? Or, give me the name of a friend we have in common? If your friend ignores you, or gives the wrong answer, walk away, report the profile to Facebook and let your friend know his/her account is compromised.
Legitimate companies like the IRS, Medicare, and Social Security will never call, email, or text people to ask for their information. If you receive a phone call that feels suspicious, trust your gut. Ask yourself, was I expecting this call? If you didn’t plan to give up any information, don’t give up any information.
Scammers will lure you with prizes or problems:
Due diligence is imperative in this new age of technology. Always do your research when it comes to a financial offer. The Better Business Bureau is a great resource. Not only can they verify the legitimacy of an organization, but they also show any complaints filed against it. Google is another great tool; you can search recent news articles and read customer reviews in real-time. Remember, if something sounds too good to be true, it usually is.
Scammers rush you into making quick decisions:
Thieves thrive off pressure and fear tactics, especially when dealing with vulnerable populations. An article in Forbes Magazine, entitled “Frauds Threatening Seniors with Jail Unless They Pay Proliferate s Elder Abuse Nears $3 Billion, written by Ted Knutson and published on January 16, 2019, warns,
Under the so-called “Impending Lawsuit Scam,” a crook calls a senior warning a warrant is out for their arrest and unless the person pays a fine, he or she will be arrested. To give the calls more credibility, scamsters will often spoof a call so caller-ID appears to show it is coming from a local sheriff or police department.
If you receive a call like this, remain calm. Takedown the person’s information, and let them know you will call them back. If they pressure you into acting before the call ends, hang up. Any legitimate organization will always give you time to decide – and none of them will threaten you with jail time. Report the caller immediately to the FTC.
Scammers want you to pay in a certain way:
At Schott Financial Management, we often receive faxes from fake government agencies in Nigeria, congratulating us about a long-lost relative who happened to leave us a large inheritance. The catch? We have to send them money to get our money. Sound fishy? You bet it is. Scammers will often request payments through the use of wire transfers; they may ask you for your bank account information or tell you to buy a gift card and send the serials number on the back. These are all red flags. Remember, you are not obligated to give away personal information to anyone, no matter who they pretend to be.
Knowledge is the best weapon against scams. The more awareness you have about your finances, the better equipped you’ll be to spot the piranhas before they enter the pool. If you are uncomfortable about technology, appoint someone you trust who can navigate the web and spot potential threats.
Additional Resources:
Better Business Bureau: https://www.bbb.org/
Federal Trade Commission (FTC): https://www.ftc.gov/
Fraud Predictions for 2021: https://www.securitymagazine.com/articles/94313-fraud-predictions-for-2021-and-beyond
The Ten Most Common Scams: https://nt.gov.au/law/crime/scams/ten-most-common-types-of-scams
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge, a Registered Investment Adviser. Schott Financial Management and Cambridge are not affiliated.
