You work hard for your money, so the last thing you want to do is lose it to racketeers running financial scams. Each year, Americans lose billions of dollars to money transfer scams. As criminals continue to come up with new schemes to steal people’s money, understanding and recognizing the signs of these scams is one of the best fraud prevention tools.
A money transfer scam is a form of fraud that involves tricking victims into sending money to scammers. There are dozens of different ways scammers can convince people to send them money, from emotional manipulation to promising unrealistic investment returns or blackmail. Common types of money transfer scams include:
Financial scams can range in sophistication but often involve communications from email addresses and phone numbers you don’t recognize but that may seem legitimate at first glance. These requests often press you to take immediate action and include demands for payment or prompts to follow a link or contact the sender on a specific number.
Romance scams manipulate the emotions of the victim by tricking them into believing they’ve found a romantic partner or love interest. Romance scams lean heavily on manipulation tactics and often include real photos of people to lure in victims. The fraudster may also use flattering language, attempt to advance the relationship quickly and make excuses for why they can’t meet in person. Romance scams culminate in requests for money, usually under the guise of an emergency, travel expenses or promising investment opportunities. The most obvious signs of romance scams are avoiding meeting in person or on a video call, incomplete or unrealistic dating profiles and requests for money.
Gift card scams are schemes where a fraudster convinces the victim to buy a gift card and share the card number and PIN. Criminals running gift card scams will often impersonate companies or individuals, persuading the victim to pay a bill, help someone or claim a “prize.” The scammer will then collect the gift card information and disappear. To protect yourself from gift card scams, don’t agree to pay a bill or buy something using a gift card, avoid sharing your gift card numbers or PIN with anyone else and never pay to win a prize.
Peer-to-peer payment scams utilize payment apps such as PayPal, Venmo and Zelle to rob unsuspecting victims. These scams can entice victims to send money through peer-to-peer payment platforms by claiming they made an overpayment or by impersonating a bank or the payment platform itself. To defend against peer-to-peer scams, never share your account information with anyone, avoid sending money to people you don’t know and ignore suspicious links or electronic communications from anyone claiming to be the payments provider. Instead, contact the provider directly using the information on the company website.
In a cryptocurrency scam, the fraudster will propose an investment opportunity or demand payment in the form of cryptocurrency. Common crypto scams include fake investment opportunities, phishing attacks and blackmail. Signs of cryptocurrency scams include investment advice offers from people you don’t know, demands for payment in cryptocurrency and out-of-the-blue messages from people claiming to be celebrities, companies, government agencies, family members or romantic interests.
In an unauthorized transaction scam, fraudsters transfer money from the victim’s account without their approval. Criminals may hack into the victim’s online account, deceive the account owner into sharing their banking information, or simply commit check fraud scams by using check alteration, forged checks and counterfeit checks. Unauthorized transactions might start small and seem insignificant but remember that criminals who have your information could be testing your account to see if it's active, and you don’t want to wait until they make larger purchases to take action.
In an overpayment scheme, criminals offer to buy an item for sale for more than the asking price. The fraudster will then send the “payment,” after which they’ll ask the seller to refund part of the overpayment. When the seller sends a portion of the money back and realizes the original payment never cleared, the scam is complete. Remember, if the offer seems too good to be true, it probably is.
Advance fee fraud can take many forms, all of which ask the victim to send a fee or deposit up front. Scammers often request these payments with promises to help victims recoup investment losses or take advantage of investment opportunities. Once the victim sends them money, the scammer disappears. For example, a fraudster might contact someone with an incredible investment opportunity in a new startup. The scammer says that they need an advance payment to process the paperwork for the investment, but once the victim pays the fee, the scammer makes off with the money.
Wire fraud involves stealing money by using electronic communications, such as email, calls and texts. Wire transfers scams are especially dangerous because, unlike a bank transfer, wire transfers are fast, usually irreversible and have no geographic limitations or transfer limits. In a wire fraud scam, bad actors may use phishing emails or fake family emergencies to convince their victims to send them money through a wire transfer. Scammers can also pose as a legitimate company or government agency, such as the IRS or a title company in a real estate transaction. They’ll then direct the victim to send them a wire transfer immediately to avoid a penalty or arrest, or even as part of a legitimate transaction, as in the case of real estate wire scams.
Financial frauds and scams can strike anyone at any time. If you think you’ve been the victim of a money transfer scam, contact your bank and local police office immediately to report the crime. You can also report the scam to the Federal Trade Commission (FTC) and your state attorney general. If your financial information was compromised, you’ll want to add a fraud alert to your credit report (which you can do by contacting Equifax, Experian or TransUnion), along with changing your online account passwords. Throughout the process, keep copies of any documents, letters or other information related to the scam. Early action is essential in cases of financial fraud, and the sooner you act, the more likely it is that the criminals will be caught and the funds recovered.
The importance of financial security can’t be overstated. These fraud prevention tips can help you fend off fraudsters and protect your money from miscreants.
Use a unique, strong password or passphrase for each account (and change it roughly every three months).
Though money transfer scams are on the rise, the good news is that you can protect your accounts by staying vigilant, exercising caution and familiarizing yourself with common financial scams. If something seems suspicious or sounds too good to be true, just walk away. And, as always, focus on fraud prevention by following secure banking best practices and avoiding sending money to strangers or responding to unsolicited requests or offers.
If you think you’ve been the victim of a financial scam, contact Seacoast Bank or visit any bank branch — we’re always here to help.
Topics: Protect Your Finances
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