5 Signs of a Scam

Awareness can go a long way toward protecting you against scams. If you have heard about a particular scam, you are 80% less likely to engage, and if you do engage, you are 40% less likely to fall victim, according to research by the Financial Industry Regulatory Authority.

The challenge, though, is keeping up with the latest schemes because scammers are always coming up with new ways to con people out of their money or personal information. That’s why it’s important to be able to recognize the red flags, regardless of the latest tactics or stories scammers are using. 

All scams have telltale signs. Here are five of the most common to be aware of if you receive an unsolicited phone call, text message or email.

[ See: Anatomy of a $50,000 Scam ]

Scammers claim to be with organizations you know

Scammers want to gain your trust, so they often claim to be with a well-known business, organization or government agency. Best Buy’s Geek Squad, Amazon, PayPal, Microsoft and Publishers Clearing House top the Federal Trade Commission’s list of most-impersonated companies. The U.S. Postal Service is the most-impersonated organization—often through delivery notification text messages, according to the Better Business Bureau.

And the government agencies that scammers claim to be with include the IRS, Medicare and Social Security Administration. Be aware that these agencies initiate contact by mail (unless you have opted in to receive other forms of communication from them). So, a call, text, or email that appears to be from a government agency is usually a scam.

What to do: If you get an unsolicited call, be wary. Stay safe by hanging up and contacting the business, organization or agency directly by looking up its number. If you receive a text or email, don’t click on any links in the message. 

Scammers pressure you to act now

Scammers often say there is a problem that requires your immediate attention—your account has been compromised, there’s a virus on your computer, or you’re being audited by the IRS. Alternatively, they might claim that you’ve won a sweepstakes or are owed a refund and must act quickly to get your money. 

By telling you there is a problem or a prize, scammers attempt to create a sense of urgency so you don’t have time to evaluate the situation. 

What to do: Don’t rush to respond. Forward suspicious emails or text messages to a family member or friend to get a second opinion. Ask callers for time to make a decision. Legitimate organizations won’t force you to take action on the spot.

Scammers ask for unusual forms of payment

Scammers will ask you to make payments with a wire transfer, gift card, prepaid card, cryptocurrency or payment app such as Zelle. These forms of payment are difficult to trace and can make it nearly impossible to get your money back, which is why scammers like them. 

Scammers also send you a check, ask you to deposit it and send some of the money back to them. When this happens, the checks are fake, but victims don’t discover this until it’s too late.

What to do: If you’re being told to pay in a specific, unusual way, it’s a scam. Government agencies and legitimate businesses won’t demand wire transfers or payments with gift cards, cryptocurrency or payment apps. 

Scammers ask for your personal information

Scammers can steal your identity and do a lot of damage if they have your personal information. They can do this by claiming to be with your bank, your utility company or a government agency and asking you to verify your identity. So if you get a call, email or text out of the blue asking for your name, birthdate, Social Security number or account number, it’s a scam. 

What to do: Don’t respond to requests for your personal information if you get an unsolicited call, email or text. Contact the company or organization directly by looking its number up online (rather than clicking on any links in texts or emails or calling a number provided to you). 

Scammers demand secrecy or make threats

It’s a red flag if you’re being told that you’re in trouble with the law but can’t tell anyone what is going on or contact an attorney. Demanding secrecy is a common tactic scammers use to prevent victims from talking to someone who might help them realize they are being scammed.

Scammers also use threats to scare people into cooperating. Be aware that government agencies won’t threaten you, according to the FTC. And debt collectors can’t harass you or threaten to arrest or hurt you.

What to do: If someone is demanding secrecy or threatening you, disengage. Then reach out to someone you trust to get a second opinion about the situation.If someone is telling you not to hang up, you could even drive to the police department while staying on the phone to get help from law enforcement.

For more help identifying the red flags of scams, download Carefull’s free Is It a Scam? guide.

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