Recognizing the Most Common Scams

Rachel Statzell • October 25, 2023

Recognizing Scams...

As we always say, education is imperative when it comes to protecting yourself against fraud and scams. We have compiled a comprehensive list of scams and tips to help you learn more about the tactics scammers use to get your money.

How Do You Recognize a Scam?

There are four main ways to tell if someone is trying to scam you. This is by  no means a definitive list, however if something feels off about the conversation you are having, stop right away and do not give out any personal information. 

     1. A scam almost always begins with an inpersonation, someone pretending to be a person they are not. This person will pose as law enforcement, government, or any other person of power. They will make themselves sound as official as possible to lure you in. 

     2. There will always be a prize or problem involved in the conversation. Something is wrong with your account, you are deliquent on something, or wanted by the law. On the flip side you may have won a drawing or sweepstakes and are being called to cash in your winnings. 

     3. After the problem or prize has been established, there is very often a push for immediate action. The scammer will present a sense of urgency for you to act right away. Maybe it is so you don't lose your prize, or maybe it is to prevent a warrant for your arrest, or to help a desperate loved one. This immense pressure will override your sense of reason and cause you to make decisions that are reasonably not in your best interests when viewed from hindsight. 

     4. Lastly, there are usually specific conditions to the scammers request. This is most commonly presented in how your payment is received. If there is a very specific request for funds to be transferred via an unusual method, this is a big red flag that you may be being scammed. 

Types of Payments Scammers Ask For...

One of the tactics that scammers use is applying pressure for payment in very specific ways. These ways are preferred because they are less traceable and often can not be undone. 


Wire Transfers - An bank to bank transfer that can be done quickly and cannot be undone. 


Gift Cards - Scammers will request you use your money to buy gift cards for them. These are as good as cash and allow anonymity for the spender, and the funds can not be recouperated. 


 Person to Person Networks - Every day fraudsters are finding loopholes in the cashless society. Networks like CashApp, Venmo, and Zelle are convenient, but very risky. Fraud protections on usually low with these apps, and anyone can create an account to receive money (and they don't even need a bank account or card to do so).


Cryptocurrencies - The newest practice is for scammers to ask you to purchase cryptocurrencies like Bitcoin with your money, and then send it to them. Cryptocurrency is not backed by the federal government, and only exists digitally. Handing over Crypto to a fraudster is essentially throwing money away. It can't be tracked or refunded, so be wary when paying in this manner. 


Glossary of Scams...

There are so many scenarios fraudsters use to get to your money. Here are a few of the most popular ones. 


Advance Fee scams are situations where you are contacted and promised a large sum of money, a trip, or another prize, but first you must pay a fee. Be wary when something you didn't ask for falls in your lap, but you must first pay to get it.


Check Cashing fraud happens when a scammer sends you a check, promising you can keep the funds, minus a portion that you need to return to them. The instances where this can happen vary widely, but it is important to know that if someone offers to pay you to cash a check for them, it is almost certainly a scam.


Email/Phishing scams come in so many forms. Phishing is when a scammer will contact you via email, text, or phone and pretend to know personal information about you. They may pose as a relative, government or law enforcement official. They use information that is easily found on the internet and trick you into thinking they are official. They will request money using most of the tactics we have outlined.


Gift Card scams along with phishing usually target the vulnerable population. You will get notification that a bill is overdue, or there is some outstanding warrant, and you must pay for it, but use gift cards. Frausters will have you go out and purchase gift cards and give them the numbers. There is no bill or fine due, you're out the money, and the scam is complete. 


Romance scams (much like many of the scams out there) end up encorporating several methods of defrauding you of your hard earned cash. You meet someone online, and they seem wonderful. You can get to know them anywhere from days to months to even years before they strike. They will ask for money, or send you a chek (presumably as a gift or to help you out) where they need some of it back. You trust them because you think you know them. Turns out, you don't. That person on the other end of the phone is scamming you. 


Smishing is short for "SMS Phishing". This is a type of phishing where you are sent a text, usually with a message that you owe money, or even coming from your financial institution stating there is an alert on your account. There is a link to click. Do not click the link. This is fraud. 


Spoofing is a tactic that is combined with other scam methods to increase credibility for the scammer. The phone number that shows up on caller ID will be local, or even have a name attached to it that seems legitimate. This entices you to answer the phone, which is the first step to them achieving their goal. 



The Bottom Line...

The bottom line to all things fraud is, if it doesn't make sense, don't do it. If the pieces don't fit together, and the information you're getting from the person on the other end puzzles you, STOP. Call your financial institution or another trusted financial advisor and see if you were put at risk. Research all claims made over the phone, in email, or over text. Look into overdue bills, fines, or alleged prizes. Doing so will save you many headaches in the future.