How to Protect Yourself from Common Fraud Schemes

Fraud comes in many forms, but the rise of digital transactions and sophisticated scams has made it more critical than ever for consumers to be vigilant. One of the most prevalent forms of fraud today is check fraud, often combined with tactics designed to deceive victims into sending money or purchasing gift cards. Below are common schemes and practical ways consumers can protect themselves.

1. Unexpected Checks: “Were You Expecting This?”

If you receive a check unexpectedly, especially from someone you don’t know well or at all, this is a major red flag. Scammers often send fake checks as part of elaborate schemes. These checks may appear to be from a legitimate source, but they can bounce days or even weeks later after you’ve deposited them.

Protection Tip: Always verify the legitimacy of the check before depositing it. Contact the issuing party directly using contact information from an independent source (like the company’s official website) and not the details provided on the check itself.

2. The Request to Send Back Funds: A Classic Warning Sign

One hallmark of fraudulent check schemes is being asked to send part of the funds back. The scam works by sending you a fake check for a large amount of money. The scammer will then ask you to deposit the check and wire a portion of the funds back to them, often under the guise of payment for services, refunds, or prize winnings.

Protection Tip: If you’re asked to send money back after receiving a check, stop immediately. It’s a well-known sign of check fraud. Do not withdraw funds or engage further until you can confirm the source of the money is legitimate. Remember, even if a bank clears a check for deposit, it may still be fraudulent, and you could be liable for any losses.

3. Gift Cards: A Popular Tool for Scammers

A common scheme involves fraudsters asking victims to purchase gift cards (such as for Amazon, Google Play, or iTunes) and then provide them with the card numbers. They’ll claim the gift cards are for payment, a favor, or another urgent reason. Gift cards are difficult to trace and once the money is spent, it’s almost impossible to recover.

Protection Tip: Never provide gift card information to anyone who asks for it over the phone, by email, or text message, regardless of how convincing or urgent they seem. Legitimate companies and government agencies will never ask for payment in gift cards.

4. Coaching Victims to Deceive Financial Institutions

Scammers may go so far as to “coach” victims on what to tell their financial institution if questioned about a transaction. For example, they may instruct you to provide a false reason for withdrawing or transferring funds to avoid suspicion from your bank or credit union.

Protection Tip: If anyone advises you to lie or withhold information from your bank, you’re likely dealing with a scam. Be transparent with your financial institution and report any suspicious requests immediately. Banks are trained to recognize and prevent fraud, but they need accurate information from you to help protect your account.

5. Pressure Tactics and Fear of Missing Out (FOMO)

Many fraudsters use pressure tactics, creating a sense of urgency to push victims into making hasty decisions. This might involve threatening legal action, claiming that an account has been compromised, or presenting an “urgent” opportunity that requires immediate payment.

Protection Tip: Never make financial decisions under pressure. Always take time to verify the details of any transaction or communication you receive, especially if the request is for money or personal information. Contact the company or institution directly to confirm the authenticity of the request.

6. Too Good to Be True Offers

Scams often come disguised as lucrative opportunities, whether in the form of unexpected winnings, work-from-home offers, or unbelievable investment returns. Scammers prey on the desire for easy money, tricking victims into believing they’ve stumbled upon a golden opportunity.

Protection Tip: If an offer seems too good to be true, it probably is. Be cautious of unsolicited offers, especially those that promise large sums of money or high returns with little risk. Research the company or individual making the offer and consult trusted financial advisors before proceeding.

7. Fake Technical Support Scams

Another prevalent fraud involves scammers pretending to be from a well-known tech company, claiming your device or account has been compromised. They’ll ask you to provide personal information or access to your computer to “fix” the problem, often asking for payment via check, gift card, or wire transfer.

Protection Tip: Legitimate companies like Microsoft or Apple will never cold-call you to offer technical support. If you receive an unsolicited call or message claiming to be from tech support, hang up and contact the company directly through their verified customer support channels.

8. Phishing Emails and Texts

Phishing attacks are designed to trick you into giving up personal information like bank account details, social security numbers, or passwords. These messages often appear to come from a trusted source, such as your bank, but the link will direct you to a fake website designed to steal your information.

Protection Tip: Always verify the sender of any suspicious email or text before clicking on links or providing personal information. If you’re unsure, visit the company’s website directly by typing the URL into your browser rather than clicking on any links in the message.

9. Monitor Your Financial Accounts Regularly

One of the best ways to protect yourself from fraud is to keep a close eye on your bank accounts and credit card statements. Look for any unusual or unauthorized transactions, and report them to your bank immediately.

Protection Tip: Set up alerts with your bank for any transactions above a certain amount or any new activity on your account. This will help you catch fraudulent activity early and take immediate action to minimize losses.

10. Report Suspicious Activity Immediately

If you suspect you’ve been targeted by a fraud attempt or have fallen victim to one, it’s crucial to report the incident as soon as possible. Contact your bank or credit union, file a report with the Federal Trade Commission (FTC), and consider placing a fraud alert on your credit report.

Protection Tip: The sooner you report potential fraud, the better your chances of preventing further losses. Keep records of any suspicious communications or transactions and follow the advice of your financial institution to protect your accounts.

By staying informed and following these protective measures, consumers can reduce their risk of falling victim to fraud. Always remain cautious when dealing with unsolicited checks, financial requests, or offers that seem too good to be true. Fraudsters are constantly evolving their tactics, but vigilance and awareness can go a long way in safeguarding your financial well-being.