The Ultimate Guide to Spotting Fraud

More times than I care to recall, I’ve had a front-row seat to seemingly every type of attempted financial fraud and scams under the sun. Thankfully, in most situations, clients have seen it coming, and the attempt just becomes a cautionary tale. Other times, I’ve seen fraudsters succeed.

Has fraud already happened to you? Read my blog on what you need to do. The goal of this article is to help prevent you from needing it. 

 

Basic Tips on Spotting Fraud Attempts:

1). The fraudster tries to create a sense of urgency or panic.  

“You MUST do this right now or there will be penalty!”

“Do you want arrested?”

“Do you want your license revoked??” 

2). The scammer tries to bully and manipulate you. The scammer may act impatient, try to confuse you, or make you feel stupid.

3). They ask you to do something that just feels… off. 

 

Types of Scams to Be Aware Of:

  1. 📞 Phone Scams:

  • How They Work: Scammers impersonate legitimate companies (banks, utilities, Amazon, the police) to demand payments or personal information. 
  • Red Flags: Unsolicited calls, threats of immediate action (like shutting off utilities), or requests for payment via gift cards or wire transfers. Fraudsters increasingly ask victims to buy gift cards, a tactic that is becoming more prevalent.
  • Tip: If the call is supposedly from a company you do business with, hang up and call the real company back at the number you know to confirm if it was really them. Even if the caller ID said it was that company, it might not be. Caller ID can be altered. 

  1. 📧 Email Hacking & Financial Fraud:

  • How They Work: Fraudsters hack into your email and pose as you, contacting financial professionals or loved ones to request money.
  • Red Flags: Unusual requests, changes in communication style, or instructions to wire money urgently.
  • Tip: RESET YOUR PASSWORD REGULARLY AND DON’T USE REPEAT PASSWORDS!

  1. 💘Dating and Romance/Investment Scams:

  • How They Work: Scammers build online relationships through a dating site or other kind of chat site or app, then pitch fake investments or cryptocurrency schemes.
  • Red Flags: Requests for money, investment opportunities, or resistance to meet in person. Guarantees of quick, high returns, pressure to act fast, or a lack of clear investment details.
  • Tip: Think about it—would a new online friend (whom you’ve never met in person) really care that much about your investments? If they are taking an interest in your financial activities or giving you suggestions… RUN.

  1. 🎣Phishing Scams:

  • How They Work: Fake emails, texts, or websites mimic legitimate institutions to steal login credentials or financial information.
  • Red Flags: Poor grammar, urgent calls to action, or suspicious links.
  • Tip: Save your most used websites in your “favorites” tab on your browser. That way, you don’t risk mistyping a website and landing on a fake copycat site.
  • Bonus Tip: Unless you are 100% sure you know who sent you an email, just never click on a link in an email or download an attachment. It is just never worth it.

  1. 🖥️ Tech Support Scams:

  • How They Work: Scammers pose as tech support, claiming issues with your computer, and steal information or install malware.
  • Red Flags: Unsolicited calls or pop-up messages, requests for remote access, or payment for unnecessary software.
  • Tip: These are the most classic scams. You will get a pop up alert saying you have a computer virus and you need to click on the pop up to clear it. The trick is almost ALWAYS that you don’t have a virus… yet. But if you click that “warning” you will have one!

  1. 🌍Charity Scams:

  • How They Work: Fake charities ask for donations, often during natural disasters or crises.
  • Red Flags: High-pressure tactics, lack of detailed information, or inability to provide proof of legitimacy.
  • Tip: Only donate to charities that you are familiar with and have done research on. You reach out to THEM when you want to donate.

  1. 🎟️Lottery and Prize Scams:

  • How They Work: You’re told you’ve won a prize but need to pay fees or taxes upfront to claim it.
  • Red Flags: Winning a contest you didn’t enter, requests for payment, or personal information before receiving the prize.
  • Tip: If It sounds too good to be true, it is.

  1. 📱 Social Media Scams:

  • How They Work: Scammers hack accounts or create fake profiles to solicit money or information.
  • Red Flags: Messages from friends asking for money or sharing suspicious links.
  • Tip: If you wonder, “Hmm. Why is my old locker neighbor from high school pitching me their new business venture” … they’re not. It’s a scam. And it’s most likely not them, but someone posing as them.

  1. 🏥Medicare or Health Insurance Scams:

  • How They Work: Especially targeted at seniors, scammers offer fake medical services or equipment to steal personal information.
  • Red Flags: Calls or visits from people claiming to be from Medicare, asking for your Medicare number or payment information.

 

I wish this was all the kinds of scams you will run into, but I know there are more. Just stay vigilant. You can open your heart to the world, but don’t open your wallet. Don’t think it won’t happen to you. I can’t emphasize it enough! I hear at least a dozen fraud stories a year from real clients. These are smart, savvy individuals, yet even they can’t dodge every scam attempt. 

A lot of us are people pleasers and don’t want to offend others. Therefore, we go along with these scams because we don’t want to appear rude or have it end up that it was actually legitimate. Put yourself first in these scenarios. If you need an excuse, say, ‘Sorry, my financial advisor told me not to participate in these kinds of exchanges.” I will be your excuse any day. 

Oh – and don’t forget to notify your local police of any fraud attempts!