Fraud prevention tips

Scammers are sneaky and sly. They don’t discriminate. They target everyone, from youngsters to retirees, from individuals to businesses. No one is immune to fraud.

Learn how to protect yourself. This tip sheet1 provides you with some of the common characteristics of fraud, along with some examples. Ideally, you’ll read this before sending money to someone you don’t know, responding to an urgent request from someone you do know, paying taxes with Bitcoin or iTunes cards, or paying to collect on lottery winnings or an inheritance.

Red Flags

Learn to recognize the signs that something is amiss.

Transfer method

Many scams involve a request to wire money electronically using a money transfer service, like MoneyGram and Western Union, or using cryptocurrency, such as Bitcoin. Once the money is sent, it’s usually impossible to get it back.

Sounds too good to be true

Everybody loves unexpected money, a large windfall from an unknown relative or winning a contest. But promises of an overseas inheritance or winnings from contests you don’t remember entering may signal that the offer isn’t quite what it seems. These types of scams often require some sort of payment or tax up-front before the funds can be released.

Urgency and secrecy

Urgent requests with a need for secrecy are the hallmarks of a scam. Fraudsters will encourage immediate action so that you don’t have time to think rationally or to investigate the legitimacy of the request. Take your time and speak with a trusted contact.

Personal information request

Fraudsters may ask potential victims to provide more personal or financial information than would be required for a legitimate transaction or discussion, such as PINs, passwords, Social Security numbers, driver’s license numbers, and passport numbers.

Spelling mistakes

Be skeptical of emails, messages or website addresses that contain misspelled common words, grammatical errors that make the message difficult to read, or expressions that are used incorrectly or sound odd.

Romance scams

Who’s behind the keyboard?

Keep your guard up and look out for potential scammers who will try to lower your defenses by appealing to your romantic and compassionate side. They operate on popular, legitimate dating sites as well as on fake ones.

On a dating site, a scammer might send you a few messages and an appealing photo of themselves, or of someone they claim to be. Once you’re charmed, they’ll start asking you to send money. They may say they have a very sick family member or a desperate situation that only you can help with. Once you give them money, they’ll request more for a variety of hardships they’ve recently experienced. Once you’ve exhausted all funds available to you, the fraudster may request that you deposit checks on their behalf. The checks will be cashed based on your good relationship with the bank; however, after you’ve sent the money to the fraudster, the checks will be returned and you’ll now owe the bank.

These types of scams can ruin the victim financially, emotionally and physically.

TipDon’t send money to someone you’ve never met.

Emergency scams

Caring grandparents, don’t act too quickly!

Emergency frauds usually target loving grandparents, taking advantage of their emotions to rob them of their money. The typical scam starts with a grandparent receiving a phone call from someone claiming to be their grandchild. The “grandchild” goes on to say they’re in trouble: common misfortunes include having been in a car accident, getting jailed, or trouble returning home from a foreign country — and they need money immediately.

The caller will ask you questions, getting you to reveal personal information. They’ll also swear you to secrecy, saying they’re embarrassed and don’t want other family members to find out what’s happened. One variation of this ploy features 2 people on the phone, 1 pretending to be a grandchild and the other a police officer or lawyer. In other cases, the scammer will pretend to be an old neighbor or a family friend in trouble.

TipBefore sending any money, call your grandchild, neighbor or friend at a number that you already have — not one provided by the caller — to confirm the story. Don’t be shy in discussing the situation with a trusted friend or family member before sending any money.

Tax scams

Got a call or email from the IRS? Make sure it’s real.

Internal Revenue Service (IRS) impersonators might contact you via telephone call or email, or in-person, to demand payment for taxes owed. Impersonators may also ask for bank account or credit card information to “process payment.” You can report this type of scam to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484Opens your phone app., or visit their website.

Tip
The IRS will never:

  • Call to demand payment via prepaid debit card, gift card or wire transfer
  • Demand payment without the opportunity to question or appeal the amount
  • Threaten you with law enforcement arrest for not paying