Don't Get Hooked By These Financial Scams
Learn the best ways to safeguard your personal information—and your money.
Scammers have wasted no time in capitalizing on the suffering of the Ukrainian people. Scams have proliferated online in the days following the Russian invasion of Ukraine, including individuals claiming to be victims stranded in Ukraine as well as fake charities with elaborate webpages. Many of the fraudsters request donations in cryptocurrency.
Of course, there are countless individuals and charitable groups in dire need of assistance but it can be difficult to untangle the truth from the scams—particularly when the requests originate on social media. More than a quarter of people who reported fraud in 2021 said that the scam started with a social media ad, post, or direct message.*
Remember these guidelines:
Try to keep personal information private on social media and use privacy settings to limit who can see your posts.
If something seems fishy, hit the brakes. Wait until your emotions have settled and research what's going on. Fraudsters use tight deadlines to try to force you into a rash decision.
Never give away your passcode or password to anyone else.
Never call back a number in a message asking for sensitive information, like in the example above. Don't follow a link in an unsolicited email or text message either. Go to the website of the company or organization, or call their main phone number, and get in touch with them through direct channels.
When in doubt, do an internet search for the company or organization involved, followed by the word "scam."
Remember that requests for payment in cryptocurrency, gift cards, or bank wires are red flags for scams.
If you think you've been a victim of ID theft, report it to the Federal Trade Commission (FTC) and potentially affected account institutions. Put a freeze on your credit files if you don't plan to borrow money soon—or place a fraud alert on your credit reports. The freeze prevents any new credit from being approved, but you can freeze and unfreeze your credit file for free, e.g., temporarily while applying for new credit. The fraud alert notifies lenders and creditors that they should take extra steps to verify your identity before extending credit.
Contact one of the 3 credit bureaus to request a fraud alert or credit freeze (Equifax at 800-525-6285, Experian at 888-397-3742, or TransUnion at 800-680-7289).
Find out what to watch for and what to do if you think you're a victim of financial fraud in these common scams.
1. Fake charities
You are solicited by email, phone, or in person to contribute to an organization that sounds like a good cause but is actually a scam. Or a friend may share a link on social media. Such schemes may be general in nature, often using a name very similar to a well-known charity, or they may be more targeted, attempting to prey on people who are victims of a war or natural disaster or known to have a personal interest in a particular disease or social cause. These days, charity scams are also being circulated through social media posts on sites like Facebook, Twitter, WhatsApp, and LinkedIn.
Protect yourself:
Before contributing, research the charity through the Better Business Bureau's (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
Visit known charity websites by manually typing the URLs in a browser.
2. Social media scams
Personal pictures and posts shared on social media give scammers a buffet of personal information that can be used against you. Romance scams are a big one. Two other schemes recently flagged by the FTC include investment fraud and online shopping fraud. Both offer deals that are too good to be true and they often start on social media. In online shopping fraud, you may see an ad for an expensive item at bargain basement prices. After the order is placed you may get something you didn't order or you may not receive anything at all. Investment scams can be harder to spot. Scammers have hacked social media accounts of celebrities to tell people to send cryptocurrency to them with a promise to send double or triple the amount back in return. Similarly, some scammers set up fake websites to convince people that they're investing in cryptocurrency but victims who "invest" are never able to get any of their money back. Additionally, there are fake cryptocurrency apps that may try to imitate real crypto companies. Investment scams can originate from fake ads as well.
Protect yourself:
Always be skeptical of unsolicited offers to invest.
If something seems too good to be true, it definitely is. Run away from anyone who claims you can make big gains with no risk.
Verify the source of any emails purporting to be from an investment company. As usual, don't follow links in emails. Instead look up the company and contact them directly.
Instead of clicking on an ad and following the link, look up the company and go to the site directly.
If you're considering a company you've never done business with before, do a search on the internet for the company name along with the word scam or complaints.
If you are a victim of a social media or internet scam, file a complaint with the FBI’s Internet Crime Complaint Center and call your local FBI field office.
3. Tech support/Remote access scam
You may get a call alerting you to a problem with your computer, or a message may pop up on the screen saying your computer is infected with a virus. If you follow the instructions of the caller or the screen message, your computer may be taken hostage and your personal information stolen. You are then asked to pay a fee to restore access to your computer or data.
Protect yourself:
Prevention is the best medicine. Don't click pop-up ads or attachments from unknown senders. Avoid clicking links in emails. Visit known websites by manually typing the URLs in a browser.
No reputable institution will ever call you and request remote computer access. If you get a call requesting this, hang up.
If you receive a pop-up warning on your computer, do not call the number. Real security warnings never ask you to call a phone number.
Do not allow anyone to control your computer remotely and never give passwords and security codes to anyone on the phone.
If you think your computer has a problem, update your security software and run a scan. If you’re seeking technical support, go to a company you know and trust.
Back up your data regularly. That way, you can reboot and regain control of your computer by cleaning your hard drive and reinstalling your operating system.
If you have an account with Fidelity, consider taking action to protect your accounts (Log In Required) including signing up for 2-factor authentication.
For accounts outside Fidelity, sign up for the highest levels of security offered.
4. Tax refund fraud
A criminal, having illegally obtained your Social Security number, files a fraudulent tax return in your name and collects a refund. When you submit your legitimate tax return, it is rejected because the IRS has already processed a return with your Social Security number. In some cases, you may receive a notice prior to filing your return that the IRS has received a suspicious return using your identity.
Protect yourself:
File your return early, reducing the likelihood that a criminal would have previously filed a fraudulent return.
If your return is rejected because of a duplicate filing under your Social Security number, submit Form 14039, Identity Theft Affidavit, to the IRS.
Remember, the IRS will contact you through the US Postal Service, not a phone call.
Do not return a call from someone claiming to be with the IRS.
Visit Identity Theft Central for information about tax-related identity theft and data security protection from the IRS. It can make sense to review the identity theft information provided by your state as well.
Continue to pay your taxes and file your legitimate tax return, although you may have to submit a paper return rather than an electronic one. Attach Form 14039, Identity Theft Affidavit, when filing your return.
5. Employment or health care fraud
A person uses your identity to obtain a job or receive health care services. You may get a letter from the IRS after filing your taxes saying that you appear to have underreported your income. Or, in the health care version of the scheme, you get a bill for medical exams, procedures, and prescription drugs that you never received. The pandemic has provided scammers with opportunities for fraud, and the Office of the Inspector General in Health & Human Services has issued a fraud alert outlining how to protect yourself from COVID-19 related health care scams.
Protect yourself:
If you suspect you are a victim of taxpayer identity theft, immediately contact the IRS and file Form 14039, Identity Theft Affidavit.
Never surrender Social Security, Medicare, or health insurance numbers to anyone you don't know and trust.
If you believe someone has signed up for health insurance in your name, call the Health Insurance Marketplace call center at 800-318-2596, and explain the situation.
If it's Medicare-related, file a complaint with the Office of the Inspector General in Health & Human Services.
Review the Medical Identity Theft checklist on the FTC's website for more steps to take.
6. Unemployment benefits fraud
Scammers who apply for unemployment benefits in your name could prevent your legitimate claim from going through—while they collect the benefits you're entitled to. This scam became more prevalent in 2020 as unemployment benefits were temporarily expanded due to COVID-19. If you have a job, your employer may alert you to a fraudulent claim in your name or you may find out when the unemployment office sends a letter about a recent claim. If you’re currently unemployed, you may find out about the crime when you apply for unemployment and state labor officials notify you that someone is already collecting unemployment using your identity.
Protect yourself:
Notify the unemployment office in your state about the fraudulent claim.
Report the crime and start a recovery plan on IdentityTheft.gov. Click on the button that says "Unemployment Insurance Identity Theft: What to do now."
Be sure to review the identity theft page maintained by your state as well for more potential steps.
File a police report if possible.
Consider setting up credit monitoring. Check your credit report for unrecognized activity, which could be a sign of potential fraud.
Freeze your credit or put a fraud alert on your credit reports.
7. Credit card fraud
Someone using your identity signs up for a credit card and racks up large charges. Sometimes, a stolen identity is used to obtain personal loans or open unauthorized financial accounts. You will likely learn about this when bills are not paid and you are contacted by collection agencies looking for payment.
You may notice either you are not getting any postal mail (due to address fraud or theft), or you may start receiving confirmation or decline letters for credit cards or loans that you did not initiate.
Protect yourself:
Report the crime and start a recovery plan on IdentityTheft.gov.
File a police report.
Freeze your credit or put a fraud alert on your credit reports.
Sign up for alerts from your bank or credit card issuer to stay on top of your legitimate accounts.
8. Imposter scams
You receive a call from someone claiming to be from Fidelity or another reputable service provider. They request that you read back to them a one-time passcode that the criminal has generated through fraudulent web activity, like a password reset. This allows them to reset your password and access your account.
Protect yourself:
No reputable institution will ever call you and request your account access credentials. If you get a call requesting these, hang up.
Never give away your passcode, password, 2-factor authentication login code, or any security question and answer to anyone else.
9. Confidence/Romance scams
An individual believes they are in a relationship (family, friendly, or romantic). As a result, they can be persuaded to send money, personal and financial information, or items of value to the perpetrator. This includes the Grandparent’s Scheme and any scheme in which the perpetrator preys on the victim’s heartstrings. Over a third of people who reported romance scam in 2021 said it started on social media.*
Protect yourself:
Never send money or gifts to a sweetheart you haven’t met in person.
Be aware of the warning signs: The individual professes love quickly, tries to isolate you from family and friends, asks you for money and/or claims to be working and living far away.
Take it slowly. Ask questions and look for inconsistent answers. Try a reverse-image search of the individual’s profile pictures.
Talk to someone you trust about this new love interest. Pay attention if your family or friends are concerned.
If you are a victim of a romance scam, file a complaint with the FBI’s Internet Crime Complaint CenterOpens in a new window and call your local FBI field office.
Practice good cyber habits
Security measures aren't foolproof, and anyone can suffer a moment of inattention or lapse in judgment. Practicing awareness and taking some basic preventative measures can protect you from the vast majority of attempts to steal your identity or money through fraudulent schemes. Remember to pause and look for red flags before reacting to any unsolicited emails, phone calls, and direct messages asking for money or information on social media—even if they seem to be from someone you trust.