From phone calls informing you that your car’s warranty is expired to emails from foreign princes asking for money, there are an abundance of financial scams out there that take advantage of millions of Americans. Last September, CNBC came out with an article saying, “Americans have lost $145 million to fraud related to Covid-19, according to Federal Trade Commission data.”1 That is a lot of money that people could otherwise be saving. In this blog post, we will go over 5 financial scams to look out for so that you and your loved ones don’t get hurt.
1. Phishing Emails or Text
Scammers will use emails or text messages to trick you into giving them your personal information such as your passwords, emails, or dates of birth. They do this by sending what looks like a legitimate email or text from a company you know and trust. With that information, they can access your bank accounts or other email addresses. A good way to protect yourself is to use security software on your computer, keep apps on your phone up to date for security, and use multi-factor authentication for logins.
2. Social Security & IRS Scam
The Federal Trade Commission has been receiving reports that people are pretending to be from the Social Security Administration or the IRS. These people are asking to verify your Social Security Number for a myriad of reasons from crimes linked to your number or unpaid taxes. Remember that the Social Security Administration and the IRS will never call you. They communicate almost exclusively via mail. Even if you happen to see their phone number, there can be a possibility that the computer is “spoofing” the number. "Spoofing" is the act of disguising a communication from an unknown source as being from a known, trusted source.
3. Lottery and Sweepstakes Scam
These scammers try to get your money or personal information through fake lotteries or sweepstakes contests. Many claim that you have won a prize but must pay a fee to collect it. Others require personal information to verify that you are the winner. There are many ways that they can reach you including mail, email, phone call, or text messages. We advise that you first ask yourself if you remember entering the particular contest. If you didn’t enter it, the prize notices are likely fake. If the scammer is using the name of an organization that runs real sweepstakes, research the company's contact information and contact the real company to verify if the prize is legitimate.
4. Pyramid Scheme/Multi-Level Marketing Program
These scams are ones that need constant flow of participants to keep their operations going. They usually market themselves to individuals as legitimate business. They utilize new recruits to invest in their products or services in order to pay those that have participated longer. Be wary for any opportunity that requires you to recruit others to increase your profits or make your investments back. Also make sure to research the business with the Better Business Bureau, your state attorney general, or state licensing agencies.
5. Investment Scams
These scams promise high returns without financial risk or come from social media influencers promising a “great investment buy." We recommend that you first look up the individual and see if they are licensed and registered to give advice. The website to see everyone registered in the financial industry is https://brokercheck.finra.org/ . By searching people’s names, you can see where they work and what licenses they have. As for the investments themselves, we suggest you do in depth research and contact your financial adviser before making any decisions.
We hope this helps you identify potential scams that can do harm to your financial life. If you have questions, schedule a meeting with Tori or Alex with the "Schedule A Meeting" tab on our website.
Sincerely,
Brandon
- https://www.cnbc.com/2020/09/22/americans-have-lost-145-million-to-fraud-linked-to-covid-19.html