Top 10 Scams and Top 10 Ways to Safeguard Your Money

Photo by Kaspars Grinvalds /

The harder you work for your money, the harder scammers try to trick you out of it.

Scammers can steal your personal information and turn it into cash and drain your bank accounts. That’s why you don’t want to give your details out to just anybody, the Federal Deposit Insurance Corporation says in its summer Consumer News newsletter.

Identity thieves had a banner year in 2016, scamming an estimated 15.4 million consumers, says Javelin Strategy & Research. That’s up from 13.1 million in 2015. Fraud losses totaled $16 billion as 1 in every 16 U.S. adults became victims of ID theft, the report found.

You can protect yourself, say the FDIC and other agencies. Here are their top 10 scams to watch for and 10 safeguards to fend off scammers.

Scam 1: Government impostor

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A phone call, letter, email, text message or even a fax arrives supposedly from a government agency requiring you to send an upfront payment or personal financial information such as your Social Security or bank account numbers.

“They might tell you that you owe taxes or fines or that you have an unpaid debt,” Michael Benardo, manager of the FDIC’s Cyber Fraud and Financial Crimes Section, said in the newsletter. “They might even threaten you with a lawsuit or arrest if you don’t pay.”

Identity thieves can use personal information you provide to commit fraud. They can also sell your information to other identity thieves, Benardo warned. So, don’t take the bait.

“[F]ederal government agencies won’t ask you to send money for prizes or unpaid loans, and they won’t ask you to wire money to pay for anything,” he said.

Scam 2: Phony debt collection

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Fraudsters pose as debt collectors or law enforcement officials attempting to collect a debt that you don’t really owe.

Watch for a caller who won’t provide written proof of the debt you supposedly owe or who threatens you with arrest or violence for not paying, the FDIC warns.

“Con artists do a great job of making this seem real,” adds the Better Business Bureau. “The scammer may provide specific details, such as the amount of the debt, the complaint case number and a phone number where you can follow up. As convincing as the information seems, it’s all phony.”

You can fight back and stop harassment with tips offered in an earlier story.

Scam 3: Fraudulent job offers

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Criminals pose online or in classified advertisements as employers or recruiters to offer you enticing opportunities, such as working from home.

Watch for red flags such as a request for payment to “help secure the job” or personal financial information for a “background check,” says the FDIC.

One variation on the scheme: A scammer will offer to pay you to visit retailers and submit confidential reports about your experiences. You might receive a $500 check and be asked to investigate your bank’s service. In doing so, you deposit their check into your account, report back about the service you receive, and wire your new “employer” $500 to cover the check you just deposited. Days later, the bank will inform you that the check you deposited is counterfeit and you just lost $500 to thieves.

The FDIC says one warning sign of this scam is that the “employer” requires you to have a bank account.

“For every one legitimate work-from-home job, there are approximately 60-70 job scams,” says Flexjobs, a subscription website that screens offers for legitimate telecommuting and flexible jobs.

Scam 4: ‘Phishing’ emails

Marcos Mesa Sam Wordley /

Scam artists send you emails that appears to be from a bank, popular merchant or government agency. They ask for your personal information such as bank account numbers, Social Security numbers, dates of birth and other details.

These seemingly legitimate emails include graphics copied from authentic websites and messages that appear valid, the FDIC says.

“We have also seen emails with links to fake websites that are exact copies of real websites for FDIC-insured banks, except the web addresses are slightly different than the real ones,” said Doreen Eberley, director of the FDIC’s Division of Risk Management Supervision, which is in charge of the agency’s policies and programs related to financial crimes. “These sites are used to trick people into giving up valuable personal information that can be used to commit identity theft.”

Banks generally never ask you for your password in emails, officials say. If you provide your internet banking username and password, you may soon find scammers have accessed your account and cleared out all your money.

Scam 5: Mortgage foreclosure ‘rescue’

Marcos Mesa Sam Wordley /

As a homeowner struggling financially, you may be vulnerable to false promises to refinance a mortgage under better terms or rates.

Be on the lookout for scammers falsely claiming to be lenders, loan servicers, financial counselors, mortgage consultants, loan brokers or government agency representatives who can help you avoid a mortgage foreclosure and offer a great deal at the same time, the FDIC says.

These criminals’ offers sound like life-savers, but you may be required to pay significant upfront fees or, even worse, be tricked into signing documents that in the fine print transfer ownership of your property to the criminal, it says.

If a mortgage-assistance offer includes a “guarantee” to avoid foreclosure and pressure to act fast, it’s likely fraudulent, the FDIC says.

Also, Bank of the West recently warned homebuyers of two phishing schemes. In one, you or your lender finalizing loans receive an email with the subject “RE: Closing Package.” The email typically contains an embedded URL leading to a fake Google Docs-branded site that allows the scammers to harvest credentials. In the other, you and your lender receive a Dropbox-themed email with the subject “Please verify your email,” containing an embedded URL that leads to a phony Dropbox-branded credential-harvesting site.

Don’t open the suspicious emails and don’t click on any of the links or reply to the email, says the bank. Just delete the message.

Scam 6: Lottery ‘winner’

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You hear that you won a lottery, prize or sweepstakes, typically for contests you never entered, but you’re asked to send money to the “lottery company” to cover certain taxes and fees.

“In one example, a scammer sent a letter to people using falsified FBI and FDIC letterhead telling them they won a popular, well-known lottery but that they needed to send money by wire transfer to a lottery ‘official’ in order to secure the winnings,” Benardo said. “The ‘official’ was really a crook hoping to trick people into sending money.”

Scam 7: Cheating the elderly

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Telemarketing scammers try to cheat you or your elderly parents out of money with bogus offers for products and services that will never be delivered.

Watch for an unsolicited phone call asking you for a large amount of money before you can receive the promised goods or services, the FDIC warns.

Also beware of special offers that seem too good to be true, like an investment “guaranteeing” a very high return, the FDIC warns.

To help seniors and their caregivers avoid financial exploitation, the FDIC and the Consumer Financial Protection Bureau have developed Money Smart for Older Adults, a curriculum with information and resources, available here.

Scam 8: Bogus overpayment

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A stranger sends you a check for something you sell on the internet, but the check is for far more than the agreed-upon sales price. The scammer tells you to deposit the check and wire the difference to someone else who is supposedly owed money by the same check writer.

In a few days, the check is discovered to be a counterfeit, and you may be held responsible for any money wired out of your bank account, the FDIC warns.

Victims may end up owing thousands of dollars to the financial institution that wired the money, and sometimes they’ve also sent the merchandise to the fraud artists, too, the FDIC says.

Scam 9: Ransomware hostage

Jaruwan Jaiyangyuen /

Malicious software holds your computer, smartphone or other device hostage by restricting access until you pay a ransom.

The most common way ransomware and other malicious software spreads is when someone clicks on an infected email attachment or a link in an email that leads to a contaminated file or website, the FDIC says. Malware also can spread across a network of linked computers or be passed around on a contaminated storage device, such as a thumb drive.

Scam 10: Jury duty ‘skipper’

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A thief pretending to be a law enforcement official calls to tell you that you skipped jury duty and threatens to arrest you unless you pay a “fine” immediately. To pay up, the caller asks you for your debit account and PIN numbers.

Those would allow the perpetrator to create a fake debit card and drain your account, the FDIC warns.

The scam is so prevalent, some courthouses have issued public warnings. In Alameda County, California, the Superior Court cautions that the scammer will direct you to a local cash-advance, convenience or grocery store to buy a money card (such as a Green Dot MoneyPak or iTunes gift card), typically for $2,000 to $4,000. Once you get the card, you give the scammer the money card information over the phone and the scammer assures you a warrant for your arrest will be dismissed.

One tip-off that it’s a scam is if the call comes after business hours. Courts generally won’t contact you by phone regarding payment of a fine for failing to appear for jury service, officials say.

Read on for tips on how to safeguard your personal information and your money against scammers’ attacks.

Safeguard 1: Avoid ‘opportunities’

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It’s sage advice: Offers that seem too good to be true usually are.

“If someone promises ‘opportunities’ that are free or with surprisingly low costs or high returns, it is probably a scam,” says the FDIC’s Eberley.

“Be especially suspicious if someone pressures you into making a quick decision or to keep a transaction a secret,” she adds.

Safeguard 2: Keep it to yourself

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No matter how legitimate an offer may sound, don’t give your personal information such as bank account details, credit and debit card numbers, Social Security numbers or passwords to anyone unless you initiate the contact and know the other party is reputable, the FDIC says.

Scammers will do everything they can to appear trustworthy, warns the IRS.

If you’re shopping or banking online, give personal information over encrypted websites only. Look for “https” at the beginning of the web address (the “s” is for secure).

Make your passwords at least 10 characters; 12 is ideal for most home users, the IRS adds. Mix letters, numbers and special characters. Avoid your name, birthdate or common words. Use different passwords on different accounts.

Safeguard 3: Verify sources

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Banks will not call or send you an email asking for your account numbers, passwords or other sensitive information in your response because they already have these details, the FDIC says.

Verify the authenticity of an email by independently contacting its supposed source through an email address or telephone number that you know is valid.

Safeguard 4: Don’t click; just delete

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Beware of unsolicited emails or text messages asking you to open an attachment or click on a link, the FDIC says. That’s how cybercriminals distribute malicious software, such as ransomware.

Be especially cautious of emails that have typos or other obvious mistakes, the FDIC says.

Just delete them.

Safeguard 5: Use anti-virus software

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Run reputable programs on your computer to search for and remove malicious software, the FDIC says. If anyone, even a friend, gives you a thumb drive, use the anti-virus software on your computer to scan the files before opening them. The thumb drive could contain undetected malware.

Safeguard 6: Recognize stranger danger

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Don’t cash or deposit any checks, cashier’s checks or money orders from strangers who ask you to wire any of that money back to them or onward to an associate, the FDIC warns.

If the check or money order proves to be a fake, the money you wired out of your account will be difficult to recover.

Safeguard 7: Seek professional help

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If you need assistance avoiding a home mortgage foreclosure, the FDIC says, contact your loan servicer (the company that collects the monthly payment for your mortgage) to find out if you qualify for any fee-free foreclosure-stopping or loan-modifying programs.

Don’t fall for “guaranteed” rescues.

The FDIC also recommends consulting with a trained professional at a reputable counseling agency that provides free or low-cost help. Check the U.S. Department of Housing and Urban Development website for a referral to a nearby housing counseling agency approved by HUD or call 1-800-569-4287.

Also check out the Money Talks News solutions center for mortgages.

Safeguard 8: Check your statements

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Monitor credit card bills and bank statements for unauthorized purchases, withdrawals or anything else suspicious, the FDIC says.

Thieves expect you receive several statements every month and simply check the balances instead of studying individual purchases, officials say.

Report suspicious activity to your bank right away.

Safeguard 9: Be vigilant with your credit

Credit report
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Review your credit reports regularly for identity theft signs such as someone obtaining a credit card or a loan in your name, the FDIC advises. You are entitled to receive at least one free credit report annually from each of the three main credit bureaus (Equifax, Experian and TransUnion). Start at or call 1-877-322-8228.

Call a credit bureau’s fraud department if you spot a potential problem. If an account turns out to be fraudulent, ask for a “fraud alert” to be placed in your file at all three credit bureaus. The alert tells lenders and others that you have been a victim of fraud and that they should verify any new accounts or changes to accounts in your name.

Don’t reach out to a so-called credit repair company before checking out what you can do on your own first, as told in this Money Talks News report. Also, see how credit reports are changing here.

Safeguard 10: Reach out

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The FDIC advises you to contact its Consumer Response Center (CRC) if you have questions about possible scams or if you are a scam victim having trouble resolving the issue with your bank. The CRC answers inquiries about consumer protection laws and regulations and investigates complaints about FDIC-supervised banks. If the situation involves a financial institution for which the FDIC is not the primary federal regulator, CRC staff will refer the matter to the appropriate regulator.

Visit its webpage on submitting complaints or call 1-877-ASK-FDIC (1-877-275-3342) Monday through Friday, 8 a.m. to 8 p.m. (EST).

How do you fend off fraud? Were you ever the victim of a scam? How did you handle it?

Share with us in comments below or on our Facebook page.

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