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5 Financial Frauds to Watch Out For

5 Financial Frauds to Watch Out For

Fraud Week falls in November, and we’re here to help you stay one step ahead. Did you know nearly 30% of Americans fell victim to fraud in the past year? With the rise of digital transactions and online communication, fraudsters are constantly coming up with new ways to target unsuspecting individuals. It is important to stay vigilant and keep your accounts secure. Protecting your finances is crucial to securing your future, and at Blakely Financial, your financial safety is our priority. From phishing scams to tax fraud, here are the top five financial frauds to watch out for and tips on how to avoid them. 

Phishing Scams

Phishing scams are one of the most common types of fraud, where scammers pretend to be a legitimate entity, such as your bank, a government agency, or even friends and family. They typically send out emails, texts, or social media messages designed to look real, asking for sensitive information like your Social Security number, credit card details, or login credentials. There are many types of phishing scams including:

  • Email Phishing: Emails appearing to be from a legitimate company but contain links to fake websites.
  • Smishing: Text messages often urging you to click a link or respond.
  • Vishing: Voice phishing, where scammers call you pretending to be from a legitimate institution.
  • Spear Phishing: Targeted phishing attacks aimed specifically at you, often using information about you to appear more convincing.

To avoid falling victim to phishing scams, always verify the sender’s email or phone number. If you receive an unexpected message from a company or other institution, contact them directly through their official website or phone number to confirm. 

Identity Theft

Identity theft occurs when fraudsters steal your personal information, such as your Social Security number, driver’s license, or bank account details, to open accounts or make purchases in your name. This can lead to significant financial losses and a damaged credit score, as well as the hassle of resolving other issues it creates. 

Avoid this financial fraud by regularly monitoring your credit report and bank statements. Check for any unfamiliar accounts or charges and report them immediately if found. You are entitled to a free credit report from each of the three major bureaus annually, and more information on how to get these reports can be found on the FTC website. Setting up fraud alerts or credit freezes can also add an extra layer of protection to your finances!

Investment Scams

Investment scams often promise extremely high returns with little to no risk. With this type of financial fraud, scammers may offer exclusive opportunities, insider information, or “guaranteed” profits to lure you into investing. Unfortunately these “too good to be true” investments often are, and can lead to significant financial losses.

To steer clear of investment scams, be sure to research any investment opportunity thoroughly before committing. Check with trusted financial sources, such as your financial advisor, or verify with the SEC’s Investment Adviser Public Disclosure website to ensure the company and representatives are registered and have a clean track record. Remember, if it sounds too good to be true, it probably is.

Credit Card Fraud

Credit card fraud occurs when unauthorized charges are made on your card or when a scammer opens a new credit card in your name. This can damage your credit score and lead to unexpected financial liability. With more people using credit cards for online purchases, credit card fraud has become increasingly common.

To limit your chances of credit card fraud, check your credit card statements monthly and report anything suspicious to your bank or card issuer immediately. Many banks and credit card companies offer fraud alerts or allow you to monitor transactions in real time through their apps, making it easier to catch fraudulent charges early. 

Tax Fraud

Tax fraud involves scammers posing as the IRS or other tax authorities to obtain sensitive information or payments from you. They may threaten legal action or claim you owe back taxes, urging you to pay immediately through unconventional methods like gift cards or wire transfers. The IRS has a clear policy that they never contact taxpayers by phone or demand immediate payment. 

Tax fraud is relatively simple to avoid as the IRS typically communicates by mail and will never call, text, or email to demand payment or ask for your personal information. If you receive a suspicious message claiming to be from the IRS, ignore it and report it to the IRS through their fraud reporting site

Fraud Awareness Week serves as a reminder to stay vigilant and informed about the evolving tactics used by scammers. Protecting yourself from financial fraud requires awareness, diligence, and quick action when something seems off. At Blakely Financial, we’re dedicated to helping you keep your finances secure. If you have any questions about securing your finances or want to learn more about fraud prevention, reach out to our team today. Together, we can work to build a safe and secure financial foundation.

 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.