Broker Check

Avoiding the top 10 financial scams

April 05, 2019

According to there are many scams currently which you need to be aware of. The following is a rundown of the most prevalent and some common sense tips to avoid this ongoing danger.

Debt collection scams are number one on the list. The majority of these complaints come from actual debt collectors but, collections agency must operate within the Fair Debt Collection Practices Act. If they don’t, you can file a complaint so you need to understand your rights if this happens. There is a long list of things which debt collectors may or may not do. Follow these steps if you are contacted by a debt collector; verify the debt with the original lender and confirm they have authorized this agency to collect from you. Once you have verified the legitimacy, contact the collection agency and then you should be able to work out a repayment arrangement. If this was not legitimate, report the situation to Federal Trade Commission and It is easier to not over extend yourself into debt to begin with but, life happens.

Fake government officials may attempt to contact you through email, phone or letters. The most common is that the IRA or FBI instructs you to wire money using Western Union or Moneygram somewhere which those funds will then disappear forever more. Government agencies will never request this action especially to an overseas banking institution, so do not send it! The IRS will always notify you by letter. If you question the legitimacy of such a notice, take it to your tax professional, a senior advocate or another trusted individual to verify before taking any action. As for the FBI scam, I have been called and informed that I have four serious offenses (yes not one but four!) and a warrant for my immediate arrest will be issued if I don’t send money. I am not sure how the FBI would contact a person of interest but, my guess is it will not do so by requesting money.

Identity theft, phishing and pharming. I was surprised this was not at the very top of the list! It certainly concerns every individual and business in today’s electronic culture. Identity theft is exactly as it sounds, stealing your identity using social security numbers, driver’s license, etc. to open credit accounts in your name spending money which will fall back on your credit record and history. Best way to avoid this is to check your accounts on a regular basis, set up credit protection services, and run your personal credit from the three credit reporting bureau’s and verify the accuracy of those reports. Phishing and Pharming normally happens through email communication. The scam is to get you to click and follow a link which will compromise your information in some way. It may be an attempt to copy an address book or even more nefarious to plant some type of malware on your on computer which will benefit the scammer in some way. That could be information to sell for identity theft or even ransomware. Cyber criminals are getting better at making these look legitimate so if you receive an email from a bank, credit card or similar institution which you are unsure of, contact that entity with a local number or another number that is not listed on the email. Verify prior to clicking on anything which you are not certain.

Phone scams, will they never end? This issue is indicative of how slow our bureaucracy is to legislate and ineffective to protect consumers against this practice. We all remember the so called Do Not Call lists. Well they are still in effect yet completely ineffective. So many people now only use mobile phones and for a short period were not attacked with telemarketers and phone scammers. In the past I answered unknown numbers if it came from a local number, not anymore. Most of these calls are harmless if you just hang up. If it is important, they will leave a message which you can discern later. However, the calls scaring grandparents stating that their grandchild is in jail and you need to send money immediately can tug on emotional heart strings and cause financial harm quickly. If this happens ask them information about the callers’ identity and organization and that you will call them right back after you verify the information through another source but never from the caller. Normally they do not want to give you any information other than how to send them money and will almost certainly not wait for a call back. These criminals have been known to go through garbage and look at discarded birthday cards so they may know the names of your grandchildren! If they would only put as much effort into legitimate endeavors.

Loan scams, credit fixers, sweepstakes prizes, internet merchandise schemes round off the most common scams. In a perfect world this would not be a concern but the world is not. Even the credit bureau(s) can be and have been hacked. Even if you try not to participate in the electronic culture, you cannot avoid it. The tooth paste is already out of the tube. In real estate they always state that it is about location, location, location. Well to avoid scams the most important thing to remember is to Verify! Verify! Verify! Until we talk again be vigilant and be well.

Registered Representative offering securities and advisory services through Independent Financial Group, LLC (IFG), a registered broker-dealer and investment advisor. Member FINRA/SIPC. Dedicated Financial & Insurance Services and IFG are unaffiliated entities