In observance of International Fraud Awareness Week, which takes place every November, it’s important to be aware of the different types of fraud and the ways in which you can protect yourself and your family members from financial fraud. While some are more susceptible to these schemes than others, it is important for everyone to remain vigilant when it comes to protecting their finances.
At Landmark National Bank, we are here to help you stay on top of your financial assets and protect yourself from fraudulent schemes designed to take advantage of you and your family. Continue reading to learn more about the most common types of financial fraud and tips for avoiding them.
Common Types of Fraud
Before you can learn how to protect yourself, you must first understand the signs of fraud and the different types of fraud that you or your family members may be subjected to. The four main types of financial fraud to be aware of include:
- Identity theft
- Elder fraud
- Advance fee fraud
Identity theft is the most common type of fraud. Almost six million people were victims of identity theft in the year 2021. This happens when someone steals another person’s identity, including their name, credit card information, and Social Security number. This stolen information is used to commit fraud and other crimes, including applying for credit, filing taxes, getting medical treatments, and even going shopping. Becoming a victim of identity theft has a lot of repercussions, including a real hit to your credit score.
Another very common type of financial fraud is phishing. While phishing can lead to identity theft, it is a much more specific process for stealing one’s personal information. This type of fraud begins with an email that could appear as though it is from a reputable company. It may even come from your financial institution.
You may see words such as “immediate attention required” throughout the email prompting you to click a link that will redirect you to another website. The page you are redirected to will either be a phony website or the actual company’s website. In the first situation, you may be asked to update your personal information including your name, address, and Social Security number. If the second situation happens, a pop-up window will appear for the purposes of harvesting your information. Either way, you could become a victim of identity theft if you click on suspicious links.
The older generation tends to be the most vulnerable to financial scams due to inexperience with technology and scammers assuming older adults have plenty of money in the bank. There are five common ways scammers try to commit elder fraud. These include:
- Government impersonation scams. This involves the scammer impersonating a government program such as the IRS, Medicare, or Social Security and threatening arrest due to unpaid taxes. From there, they ask for the person’s Social Security number and begin committing fraud.
- Sweepstakes and lottery scams. These scams involve someone calling an older adult and claiming they won the lottery or some kind of sweepstakes. However, in order to receive their “winnings,” the older adult must send money or gift cards to the scammer to cover fictitious “transaction fees” or similar nonexistent expenses.
- Phone scams. A common robocall involves the person on the other end asking, “Can you hear me?” until the person they called says, “Yes,” and then they hang up. From there, they can use the person’s affirmative response as a way to authorize unwanted credit card charges.
- Tech support scams. A pop-up or blank screen will appear on a computer claiming the computer is broken and needs to be fixed. When the older adult calls the number that appears, the person on the other end of the phone will either request remote access or a fee in order to fix the problem. With remote access, the scammer can gain personal information in order to begin committing fraud.
- The grandparent scam. This last type of scam plays on the older adult’s emotions by calling and pretending to be a grandchild to the person. From there, they will demand money or other personal information.
Most of these scams occur over the phone with the person making the call requesting personal information from the person they are trying to steal from. However, older adults are still at high risk of becoming victims of phishing and other types of identity theft.
Advance Fee Fraud
Advance Fee Fraud is a scam that involves someone demanding an up-front payment in exchange for a number of services. Some things that may be promised in exchange for the money include products, services, and exclusive deals. They may also claim that they need your help obtaining money from a country that is in political turmoil or that they want to help police catch thieves and are raising money to do so.
Whatever their reason is for needing the money, the one common thing is that the scammer never fulfills the promise and is never heard from again. Victims are almost never able to retrieve their money from the scammer since personal information is never exchanged.
How To Avoid Financial Fraud
It’s easy to worry about how vulnerable you and your family members may be to financial fraud. The good news is that there are several steps you can take in order to avoid falling victim to the above scams.
First, it’s important to avoid giving out personal information over the phone if you receive a call from an unknown number. Always double-check any number that calls you and contact your financial institution if you are unsure. You can always call the institution yourself by looking up their number online if you think there is a possibility they could be legitimate.
You should also never open and/or click on a link from an unknown source. It is especially important to train younger kids and grandparents who don’t have as much experience with technology to not click on suspicious links. Lastly, keep on top of your finances by checking statements frequently. Some banks and credit card companies even have an app you can download to your phone to allow you easy access to bank statements and transaction information. If you see suspicious activity, contact your financial institution immediately.
Protect Your Finances at Landmark National Bank
At Landmark National Bank, we want to help you protect your finances. If you’d like more information on avoiding scams or just need some advice when it comes to your financial security, check out our blog. Contact us today and our skilled advisers can set you up for success with personal checking and savings accounts. Find your local branch to begin banking with Landmark National Bank today!