I know what you’re thinking, “I won’t fall for any of those financial scams I hear about because they are so obvious.” While that may have been true in the past, scammers are continually improving their craft and devising more sophisticated scams. Just as social media employs engineers to increase our use of social media, scammers continue to find new and better ways to prey on consumers. In fact, according to the Federal Trade Commission, people lost nearly $8.8 billion dollars to financial scams in 2022. This is a 30% increase over 2021 and the numbers will likely continue to grow.
Here are the top frauds of 2022 and ways to avoid becoming a victim.
In this scenario, an individual pretends to be a relative or business associate in some form of distress or your financial advisor in need of information to prevent some harm to your account. They say they need money immediately or they need your bank or investment account information to ensure your account is safe. To prevent this type of fraud, either delete the email or text or hang up on the caller. If you think this might be a legitimate issue, ask the scammer something only the individual they are pretending to be would know and never provide any of your personal financial information. If the imposter claims to be your financial institution, don’t respond to the request. Instead, call your bank on a known number to determine if the request is real.
Online Shopping Fraud
This happens when scammers spoof a legitimate shopping website or create a fictitious shopping site where you may pay for merchandise, but then you never receive it. To prevent this type of fraud, only shop at reputable companies and ensure the website you are on is the company’s actual website.
Prize, Sweepstakes or Lottery Scam
This scam happens when you are told you have won a prize, sweepstakes or lottery; however, to receive your prize, you must send payment for taxes, processing fees or cover some other expense. The scammer may request that you purchase gift cards and then ask that you read the card’s PIN number to the scammer as payment. Or they may ask you to write a check or provide your personal bank account information. The telltale sign that this is a scam is the request for payment before you can collect your winnings. Any legitimate prize will come to you without you having to pay for it. Examples of this scam are fake Publisher’s Clearinghouse prizes and the Nigerian (or other country) lotteries.
Generally, fraudsters offer a seminar that will teach you how to make money quickly and easily or with an investment that promises high returns for little to no risk. It usually involves high pressure sales tactics whereby you must “act now” or you will miss the deal. As we know, all investments involve risk and learning how to invest in different assets takes time and effort. To determine if the investment is a scam, use the old adage, if it sounds too good to be true, it probably is. If you are still interested in pursuing it, ask a third party financial advisor or investigate the investment using materials from unaffiliated parties and proceed with caution.
Business/Job Opportunity Scams
These are often presented as an opportunity to work from home and “be your own boss.” This scam takes a few forms, but generally you are hired for a job and then requested to accept checks and then transfer the funds to someone else. For the service, you get to keep a portion of the funds. The check you receive, however, is fraudulent and the scammer hopes you send the funds before learning that the deposited check has bounced. To avoid this scam, research the potential employer or discuss the job with someone you trust. Also, remember, no legitimate business will ask you to deposit a check and then transfer proceeds on behalf of the business.
If you are unsure if a call, text, email or website is a scam, please do not hesitate to contact your FineMark financial professional (using their known phone number or email address). We have seen many variations of scams and continue to assist clients in navigating these unfortunate and difficult experiences.
2023 First Quarter Review and Commentary
By Read Sawczyn
Senior Vice President & Private Wealth Advisor, Trust
Articles In This Issue:
2023 First Quarter Review and Commentary
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