If you’ve been a victim of financial fraud, you’re not alone. Scams are more common than you might think! Beware of financial scams! Keep your attention always.
If there is any activity or financial transaction involved, there is almost certainly some kind of fraud associated with it. According to the Federal Consumer Sentinel Network Data Book 2019 Trade Commission (FTC). It gave 3.2 million consumer-reported cases of identity theft, scams, and cell and phone service issues that resulted in a total of $1.9 billion in fraud losses.
That translates to almost one hit per $100 citizens! Being aware of commonly used cash fraud cases today will help you identify the warning signs of fraud. Here are some scams you should identify to avoid being a victim or, if you have been, how to get out of the situation.
Financial Scams You Should Avoid Falling
Unemployment benefit
Unemployment insurance fraud is a big problem, especially in times of economic uncertainty and unemployment. For example, after the COVID-19 pandemic, tens of millions of workers turned to unemployment insurance for financial assistance.
The predictable $600-a-week federal unemployment insurance — plus state unemployment benefits — has made weekly payments a bigger target for fraud than ever. According to the FBI, the scammers filed fraudulent unemployment suits with stolen identities. Scammers have purchased personally identifiable information (PII) online that has been stolen from past data breaches, computer hacking, email phishing scams, and a host of other sources.
With your information – which usually doesn’t require more than your full name, social security number and current address – a scammer can apply for unemployment insurance in your name and have the money transferred to your bank account.
how not to be deceived
The first complaint is a notice from the State Employment Service. You can contact yourself or your employer directly for more information on how to apply for unemployment insurance. You may also notice unauthorized transactions on your bank or credit card statements related to unemployment or unsolicited claims for benefits.
Suspicious activity can occur when an employment agency contacts you about an application that has not been submitted. Beware of financial scams! Keep your attention always.
How to act if you were the victim
If you or your employer are contacted by your local employment office, never ignore them – whether by phone, mail or email. Do not provide any information to the person who contacted you – it could be the phishing scammer for more information.
Instead, do an independent online search for the employment office’s phone number. Please contact the number listed on the official website to trace the call. Please let us know that you have been contacted by the office about a claim that you believe is fraudulent.
Unemployed offices often have departments to investigate fraud. Once involved, there is little more to do than continue reporting all new suspicious activity related to the false allegation.
- Income tax refund
The income tax return system has grown in recent years, but has become more widespread in the years when deadlines for tax returns have been extended. Thieves receive your identifying information and then file an income tax return with a large refund that goes straight to the scammer’s account.
Thieves can do this because they enter the process at the beginning of the year, like February. Extending filing deadlines gives tax refund scammers more time to complete the theft.
How not to fall for this scam
Unfortunately, you generally won’t discover this scam until you file your own tax return and the IRS contacts you about a discrepancy. For example, you may have reported your actual information on your tax form 1040, but the IRS will find that your return was filed months earlier and a refund of $X was paid.
Notifying the IRS isn’t a bad thing either – it means they’ve noticed the discrepancy and getting them involved as soon as possible is the best thing to do.
What to do if you were a victim
As confusing as this problem is, it is actually one of the easiest scams to work with. That’s because it’s very common for the IRS to have an entire department dedicated to resolving these issues. All you have to do is contact the IRS and start the process – unless they have already contacted you in writing.
When you have an investigation to initiate the discrepancy, please contact us in writing via certified mail with return receipt requested. Due to the filing discrepancy caused by this scheme, the IRS may refuse your income tax return if you attempt to file it electronically. In this situation, you can file IRS Form 14039 Identity Theft Statement with your income tax return.
- IRS arrest or lawsuit
This may not be the exact text you’ll see, but it’s a common scam. The scammer usually communicates over the phone as a recorded message, requiring you to call a phone number and make an immediate payment to avoid criminal prosecution.
Some people simply obey and pay to deal with other threats or perceived problems with the IRS to avoid. It is a common fear that thieves will take advantage of it.
How not to fall for this scam, beware of financial scams!
Beware of suspicious orders. According to the IRS, never:
- Contact the taxpayer via email, text message or social media to request personal or financial information – after all, you already have this information.
- Call the taxpayer with threats of lawsuits or arrests.
- Call, email or text to request taxpayer identity protection PINs.
If you see any of the warning signs above, you’re probably facing a scam.
What to do if you were a victim, beware of financial scams! Keep your attention always.
The best strategy when you encounter this type of call: hang up immediately. This doesn’t mean scammers don’t call you back or try to reach you through a different phone number. But that ends that private conversation.
Whatever you do, do not give any information to a live person or call the phone numbers provided. Fraudsters want to get your personal information, and every conversation that takes place increases your risk of inadvertently disclosing it. Beware of financial scams! Keep your attention always.
- Phishing
If you own a computer, you are likely to be the target of a phishing scam. In this scam, a scammer sends you an email disguised as a financial institution or other authorized agency. The message will have a link in the email asking you to provide personal information.
If you click on the link, you risk exposing your computer to a virus, malware, or becoming a persuasive and fake website that asks for sensitive information such as your social security number, financial account numbers, and more.
The scammer used the fake email to give himself access to your computer or a financial account belonging to you.
How not to fall for this scam
No matter how convincing an email may seem, never click on the links in the message. This is the most basic rule, but not always the easiest.
Scammers can create nearly exact replicas of emails or even web pages for a bank or other legitimate business. One tip is the sender’s email address – if you look closely, it’s not from the company’s legitimate domain name (the name after @ in an email address). Example: You may receive a real looking email from Charles Schwab. In this case, you can assume that the sender’s email address is, for example, customersupport @ charlesschwab.com.
What to do if you were a victim
Do not click on suspicious email links. It doesn’t need your social security number, bank account number or any other personal information because – if it were really legitimate – your information is already stored. If you accidentally click a link or provide information, please contact us immediately at your actual financial institution to notify them of the incident. They will freeze your account and will likely issue you a new account number.
Conclusion
By looking for the most obvious warning signs and employing professional services for added protection, you can avoid the worst that scammers throw at you.
As seen above, scammers look for people who are in a vulnerable position because these people are more willing to take greater risks when they are desperate. One of the ways people can be more vulnerable to scams is when they need money.
