How to Protect Yourself from a Financial or Credit Scam
Although we tend to post resources pertaining to mortgage loans and real estate industry news, we thought this was a great topic to go hand-in-hand with financial security.
What is a financial or credit scam?
As you probably already know, your financial information is very valuable and private. This information includes account numbers, passwords and security questions that - if in the wrong hands - can allow someone else to access your financial accounts. A financial or credit scam may request information such as an account number, a username and/or password to allow someone to access and empty your bank account or charge up your credit cards with purchases. It can also include a scam which requests that you pay a scammer money.
How does a phone scam work?
There are several different versions of phone scams (and new ones are being created all the time!) but the general characteristics of a phone scam include:
- Someone calls you (the phone number may be set to private or blocked on caller ID)
- The scammer delivers the "threat" that requires you to act.
- "The police have a warrant to arrest you for a debt." - This kind of scam often comes from people who claim to be the police, a debt collector or the IRS. Please know that none of these agencies will threaten you over the phone. If you owe taxes, etc., you will receive a letter in the mail.
- "Your account has been compromised, we need to verify your information." - This kind of scam will request that you give them personal information such as social security number, birth date, mailing address, account numbers and passwords. If you are concerned about a problem with your account it is best to call the 800 number on the back of your credit card or on your statement. This allows you to verify who you are talking to.
- "I'm your relative and need money now." - This kind of scam preys on your desire to help a loved one. Most often the scammer will pose as a grandchild, niece or nephew or friend who claims to have recently traveled out of the country. They will claim they have been arrested, had an accident or have a medical problem and need money right away. The scammer often advises that they don't want any other family members to know about their problem to keep you from verifying their story.
- The scammer asks for personal information such as:
- Social Security Number
- Birth date
- Account numbers
- Answers to security questions
- Or the scammer asks for money in forms such as:
How does an email or malware scam work?
In similar fashion, an email or malware scam is looking for the same personal/financial information as the phone scammers or they want you to pay them right away. They can be hard to spot because scammers will include letterhead and information that sounds legitimate however there are a few ways you can protect yourself.
- Email Scams often include:
- General salutations such as "Dear Sir" or "Hello Cardmember" - Most legitimate credit card companies will use your name in all email correspondence.
- Requests to verify information and re-set passwords - This is call Phishing. Just like real fishing, the scammers are trying to bait you to get the information they need to commit identity theft or steal your money.
- Links that look legitimate but lead to a different site - For example: an email asking you to re-set your password might ask you to click a link that looks like www.DiscoverCard.com however when you hover over the link, the real address it goes to is www.IwantYourDiscoverCard.com. Obviously when you click on the link, the site might look like the real website but in fact the form they want you to complete will steal your password, not reset it.
- Phrases that are not grammatically correct - Because there are scammers from overseas, often emails may have sentences that are not worded properly. For example, an email might read, "We are very concern that your account was been compromised." instead of reading, "We are very concerned that your account has been compromised."
- Malware Scams are high tech scams that work by infecting your computer with malicious software. This can allow a scammer to take control of your computer or phone and demand that you pay a ransom to regain control of your device. Payments are usually made via wire transfer or bitcoin which makes it impossible to trace. Scammers may also take the threat to a more serious level by threatening to upload illicit material like child pornography if the ransom is not paid. The best way to keep from becoming a victim of malware scams is to:
- Install virus protection software
- Back up your computer often so you can restore back to your settings before the infection
- Install security updates as they become available
- Make sure you only open attachments from people you know
- Be ware of downloading programs or apps from unknown sources
What should I do if I am a victim of a scam?
If you have been targeted and fell victim to a financial or credit scam, please contact the authorities right away. You should also alert your bank and the credit bureaus that you are a victim. In some cases, this can stop further damage and loss of funds. You should also contact the proper law enforcement agencies to report the crime.
It's important to understand that scammers use fear to get what they want. They use what you fear most to create confusion and push you to make quick (and disastrous) decisions. While senior citizens are often targeted, anyone can become a victim of this crime. Most people who look back on the scam say things like, "It didn't feel right," or "My gut instinct was that something was wrong." Listen to that little voice in the back of your mind when something seems off, take a breath and slow down. Ask questions and when in doubt - hang up the phone or don't click. We don't want you to become a victim!
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All information provided in this publication is for informational and educational purposes only, and in no way, is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Midwest Equity Mortgage, LLC does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Midwest Equity Mortgage, LLC do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.