Category: Financial Literacy

An individual’s personal and financial information is a valuable commodity, and protecting it is key to maintaining financial security. Being able to recognize the signs and understand the differences between frauds and scams is essential in safeguarding oneself from having their hard-earned money taken away by scammers and fraudsters. Here are the differences and some practical tips to help people avoid falling victim to deceitful practices.

Fraud:

Fraud is financial theft without one’s permission or knowledge. Fraud refers to the deceptive and dishonest activities carried out with the intention of gaining financial or personal benefits––all while breaking the law. Examples of fraud include unauthorized use of someone’s credit or debit card, stealing someone’s identity and opening accounts in their name, and taking over an unsuspecting person’s financial accounts. Fraud is more difficult to protect oneself from than scams, as it happens without people knowing about it. However, regularly keeping an eye on financial accounts for suspicious activity is key to spotting it quickly.

Scams:

A scam is financial theft with one’s permission or knowledge. It’s a trick that is designed to persuade people into believing false information or promises, with the goal of gaining their money, personal information, or other valuables. Scammers often manipulate their victims by exploiting their trust. Examples of scams include people pretending to be debt collectors, offering fake investment opportunities, or promising fake lottery or prize winnings. For example, a scammer could mail, call, text, or email someone to tell them they’ve won a prize through a lottery or sweepstakes and then ask them to pay an upfront fee to receive the rest of the money. There is no prize. The scammer simply wanted quick payment from the victim. One of the most important ways people can avoid falling victim to scams is by staying informed about the latest scams––that way they spot that something is suspicious before they agree to take action.

Tips to Avoid Becoming a Victim:

Be Caution When Sharing Information – People should be cautious about sharing personal or financial information, whether online or offline. They should avoid revealing sensitive information, such as banking information, passwords, Social Security numbers, addresses, and phone numbers to unfamiliar callers, email senders, or unfamiliar websites.

Strengthen Online Security – People should use strong, unique passwords for each online account and use two-factor authentication whenever possible. Two-factor authentication is an extra security step in the process of logging into an account. As usual, people enter either their username or email address––followed by their password. However, instead of being granted access to their account after entering the password, the user needs to confirm their identity via another specified method. For example, the user may receive a text message or an email with a one-time code that must be entered to complete the login process. Other two-factor authentication methods include biometric information, such as fingerprint or facial recognition scanning.

Resist Pressure to Take Immediate Action – Acting in urgency is a warning sign of a scam. Scammers want people to act quickly and make payments without taking the time to think the situation through. Honest organizations will give people time to make a decision.

Avoid Unusual Payment Methods – If someone is asked by an unfamiliar person or business to send a payment via a wire transfer, prepaid card, or cryptocurrency, they should not do it. These methods are nearly untraceable, and once the money is sent, it’s usually gone for good.

Develop Awareness – People should regularly educate themselves about the latest tactics being used by fraudsters and scammers. Common frauds and scams are regularly shared on the Consumer Financial Protection Bureau’s website. This can help people spot common warning signs and red flags that might indicate a fraudulent attempt to obtain their financial or personal information before it happens.

Trust Any Instincts – If something seems too good to be true, it probably is. If someone is suspicious about something, they should talk with a trusted friend, family, or their financial institution before taking action.

The Bottom Line:

Knowing the difference between frauds and scams is an important part of understanding the full picture in regard to the deceptive practices that exist in today’s world. By educating themselves and being prepared to spot the red flags, people can avoid falling victim to fraudsters and scammers.

We have provided some information and tips on how you can protect yourself from phony emails and phishing scams. In this article, we will be focusing on the latest scam published by the FBI’s Internet Crime Complaint Center (IC3), Tech Support Scams. Based on a Public Service Announcement published in July, this particular scam is on the rise. IC3’s 2022 Internet Crime Report shows this type of scandal had a 27% increase over 2021 and totaled in over $1B in losses.

How do you know if you’re being targeted:

The scammers will initiate contact with their victim through a phone call, text message, email, or popup window posing to be support from a company. They hook their victims by telling them they are eligible for a refund and that they need to gain access to their computer so they can guide them through the transfer. They will urge their victim to log into their bank account, and then take over control. During this process they will intentionally transfer more money than what was said to be refunded and play on their victims’ emotions by telling them they could lose their job if they do not receive the funds back. They will instruct their victim to send the money via cash disclosed in a magazine or to a pharmacy or retail business which will accept packages like this.

How do you protect yourself against the threat, below are some tips provided from IC3:

• Never download software at the request of an unknown individual who contacts you
• Never allow an unknown individual authorization to access or control your machine remotely
• Do not click on unsolicited popups, links, text messages or even attachments.
• Never send cash via mail or shipping companies

What do you do if you’ve fallen victim, or suspect you’ve been targeted:

If you suspect you have been a victim of this attack, you should report this activity to the FBI Internet Complaint Center at www.ic3.gov. You will need to include as much information as possible, and this should include.

• The name of the person or company that contacted you
• Methods of communication used, in include websites, emails, and phone numbers
• The address where the cash was shipped and the recipient name

The source of this information was gathered from the FBI’s IC3 website and can be reviewed in more detail at https://www.ic3.gov/Media/Y2023/PSA230718.

Compass Community Credit Union is dedicated to protecting our members and the safety of your information. If you have any questions or concerns, please call us at 707-443-8662.

We have recently seen an increase in scams and would like to provide you with some tips on how to identify them and what to watch for.

Prize Pitch (Lottery) Scams 

The classic prize pitch scam involves victims receiving notification by mail, phone, or e-mail indicating they have won a prize (monetary or other valued items). 

However, in order to collect the prize the victim is required to pay various fees or taxes in advance. Victims either never hear from the organization again or receive further requests for money.

Tips: 

• Challenge a caller who says you’ve won a prize to tell you where and when you entered. If you didn’t enter, you can’t win.

• Keep track of contests, draws and lotteries you enter.

• If it sounds too good to be true, it probably is.

Watch out for Charity Scams 

Fraud artists hope to profit from people’s generosity. Consider the following precautions to make sure your donations benefit the people and organizations you want to assist:

•            Be wary of appeals that tug at your heart, especially pleas involving current events.

•            Ask for written information about the charity, including name, address and telephone number. A legitimate charity or fund-raiser will give you information about the charity’s mission, how your donation will be used and proof that your contribution is tax deductible.

•            Ask the solicitor for the registered charitable tax number of the charity. Question any discrepancies. 

•            Check out the charity’s financial information. For many organizations, this information can be found online or call them.    

•            Watch out for similar-sounding names. Some phony charities use names that closely resemble those of respected, legitimate organizations. If you notice a small difference from the name of the charity you intend to deal with, call the organization to check it out. 

•            Be skeptical if someone thanks you for a pledge you don’t remember making. If you have any doubts about whether you’ve made a pledge or previously contributed, check your records. Be on the alert for invoices claiming you’ve made a pledge. Some unscrupulous solicitors use this approach to get your money. 

•            Refuse high-pressure appeals. Legitimate fund-raisers won’t push you to give on the spot. 

•            Be wary of charities offering to send a courier or overnight delivery service to collect your donation immediately. 

•            Be wary of guaranteed sweepstakes winnings in exchange for a contribution. According to law, you never have to donate anything to be eligible to win. 

•            Avoid cash gifts. Cash can be lost or stolen. For security and tax record purposes, it’s best to pay by check. 

Advance Fee Fraud 

Classified advertisements for loan opportunities do not guarantee the legitimacy of a company. Some companies claim they can guarantee you a loan even if you have a bad credit history or no credit rating at all. They usually request an up-front fee of several hundred dollars. If you send your money to these companies, it is unlikely you will get your promised loan and your advance payment will be at risk.

Advance fee loans operating for a criminal purpose generate millions of dollars annually in the U.S. Persons with poor credit ratings are usually the key targets and once the ‘loan processors’ receive your money, they usually disappear.

If you have doubts about the organization, contact the Better Business Bureau for further information.

Most important, do not give out your personal or account information unless you are absolutely sure you know who you are dealing with. If you have any questions or concerns, please call us at 707-443-8662.