Discovering you are a victim of identity theft or financial fraud can be scary. It is important to remain vigilant with personal and financial information because instances of fraud are so prevalent. In fact, almost $9 billion dollars were lost by consumers in 2022 alone based on a recent Financial Trade Commission (FTC) report.
There are also many ways fraudsters can utilize personal information to commit criminal acts, including taking over your account, opening new accounts or applying for services or debt in your name. Here are some common fraud schemes and how you can protect your finances.
One way many fraudsters obtain information about accounts is by requesting it from you, pretending to be your financial institution.
The phone call may start with “This is Mary from your credit union. We have seen some suspicions charges trying to post to your account, can you please verify your debit card number for me” or “this is Michael from your bank. We believe someone is trying to use your online banking credentials to view your account information. Can you please verify your username and password”?
These calls can seem legitimate, especially if they have “spoofed” the bank or credit union phone number—meaning that your caller ID might display the name of your financial institution
Your financial institution will never call you and ask for account numbers, passwords, usernames or other personal information. If you feel you are currently being pursued by an imposter, disconnect and contact your financial institution using a number that is listed for them.
“You just won a cash prize! We have included a check with this letter. Deposit the check and return a cashier’s check to us to pay the taxes on the winnings, and the rest is yours to keep!”
Sounds like your lucky day, until the check is returned and the money is removed from your account. This is known as an Advance Fee Scam or Lottery Scam, where you are given money to deposit with the understanding that you return a portion. The checks are written off closed or non-existent accounts, and the money is soon taken back from the deposit account, usually after it is already spent by you.
Always be suspicious of money you receive from an unknown entity or requests to return portions of money. Fraudsters take advantage of “float time”, or the few days that check take to process through the financial system and are long gone with the money you sent them before you even know you are a victim.
Notify the financial institution before you deposit the check so they can verify funds and place the money on hold, giving the check a chance to clear the other financial institution before the money is spent.
Phishing, vishing and smishing—it sounds like a nursery rhyme, right? Well, these are three different techniques used to get your personal information. Here is the difference between these three tactics:
- Phishing: fraudulent e-mails and websites meant to steal or entice you to provide personal information.
- Vishing: fraudulent phone calls that induce you to share personal information.
- Smishing: fraudulent text messages meant to trick you into providing personal information.
Always be aware of contact you receive online, over e-mail, text or phone. Fraudsters can be very convincing, even threatening, to get you to provide information they then use to open accounts, borrow money or gain services using your information.
Even if you haven’t been a victim of a fraud, it’s important to know what steps to take in case it ever happens:
- Contact your financial instruction and let them know you suspect you have been a victim of fraud. They will likely close associated accounts and cards, and reopen new ones.
- File a police report and share any information you feel is relevant to the case.
- If necessary, contact the three credit bureaus and place a fraud alert or credit freeze on your credit reports. You must contact each of the three individually: Trans Union, Equifax and Experian.
- Check your credit report and account history for any transactions.
- Take good notes regarding any conversation you have had with any organization about the fraudulent activity.
