Every year, about 90% of consumers either fall for or encounter online scams. And while many consumers are sophisticated enough to avoid some of the most common scams, it doesn't take much for a crafty hacker to steal your money.
Read below for the 15 most common financial scams — and how to avoid falling prey to them.
If you ever get a phone call or email from the IRS saying you owe them money, ignore it. The IRS will not contact you over the phone, no matter how much money you might owe.
If you are worried about the IRS, you can log onto your official account www.IRS.gov, or call the official hotline at (844) 545-5640.
If you ever get a phone call from someone saying they’re from your bank or credit-card provider, you should verify all the information before acting on it. Even if the caller ID looks official, you should never just take their word for it.
Find the official phone number for your bank or credit card provider, which is usually on your card or your most recent statement. Call that number, and ask them if there are any issues. If there are, they’ll be able to help you.
Email has made our lives a lot easier. However, it’s also opened people up to potential scams. Email scams — also known as phishing — can occur if you get an email from what seems to be your bank, credit card provider or other financial institution. They will say that you need to log in to fix an account error. But instead of going to the real website, you’ll go to a cloned site, input your account details and inadvertently give scammers access to your finances.
If you’re selling something on Facebook Marketplace or Craigslist, watch out for scams. Fake buyers will say they’re interested in an item and ask if they can send you money via wire transfer. And while the money may seem to come through, it will later be rescinded — after you’ve sold the item.
When selling anything, make sure to accept only cash. And better yet, go to a bank so you can have the cash checked by a teller to make sure that it is not counterfeit.
If you’re ever contacted by phone, email or text from your bank, beware. It’s often a scammer who is just trying to steal your account information. Always call them back on an independent number from the back of your debit card or monthly statement.
This one is a recent twist on a classic: A senior will get a phone call from someone pretending to be a relative, often a child or grandchild. That person will say that they need bail money — and fast. They’ll also say not to contact any other relatives because they’re too embarrassed. The scammer might even say their voice sounds different because they got their nose broken or have a cold.
There’s nothing better than finding out that you’ve won some money. Unfortunately, promises of money can also be a sign of a scammer. Here’s how it works. The scammer will say that you’ve won the lottery, a large prize or a sweepstakes. But to get the money or prize, you’ll have to send them your financial details or a deposit. Remember, a legitimate sweepstakes will never require that you send money first.
If you see an invoice from PayPal or another online vendor in your email, don't rush to pay it. This is another popular online scam. Before paying any invoice, make sure to verify that you actually owe the money. Also, never click on a link from one of those payment sites. Instead, you should log on to the website directly in a new browser window.
Paying with a check seems old-fashioned these days — and for good reason. If you get a check, you can’t instantly verify that the account is active or that there are enough funds in their account. And sometimes scammers will try to pay with a check for more than the amount. They’ll ask for change in cash or via a wire transfer. And then it’s too late once you discover that the check is no good.
If you ever hear of anyone promising you an investment guarantee, run the other away. There is no guarantee in investing. While sometimes these promises come from advisers with hidden fees, other times they come from scammers who will simply take your money and run. If you need financial planning help, always look for a CFP who acts as a fiduciary.
If you get an online bill request, be careful before paying it. Scammers can easily copy a company’s letterhead to make you think you’re getting a legitimate bill. Always open the company’s link in a new window and log on there.
After a major disaster strikes, people will often review requests from legitimate charities. However, many scammers impersonate charities and take money meant for deserving individuals and families. Before donating money, double check that you’re giving it to a real organization. Use sites like Charity Navigator to verify the request.
If you’re not computer savvy, you may be happy to get a call, email or text from tech support saying they can fix a problem for free. But they’ll require access to your device to do so. This is often a way for them to steal your account information and lock you out of your own computer.
This scam is possibly the oldest on the internet. You’ll receive an email from a stranger, often purporting to be a wealthy individual from another country. They’ll say that they need some money to get back on their feet — and that they'll pay you back much more than what they borrowed. But the money unfortunately never comes.
Have you ever typed in the wrong URL and found a website that’s eerily similar to what you were looking for? Savvy scammers will copy a website’s look and feel and make you think you’re shopping at a legitimate store. But when you place an order, the items will never arrive.
There are a number of signs to watch out for to avoid getting scammed while shopping online, including missing contact information, an unsecured site (the website url starts with "http" instead of "https"), and unprotected payment methods.
