These are the 3 biggest financial scams in America: What to know and how to fight back

Considering that you spend most of your waking hours earning money, it only makes sense to keep the cash you worked so hard for safe from scammers. You probably know by now that identity theft is a biggie. But that's not the only scam you need to avoid.

For all the talk about identity theft, it was actually just the third most reported scam in the country in 2016, according to the Federal Trade Commission. Debt collection scams were actually the most reported, followed by imposter scams, which the acting director of the FTC's Bureau of Consumer Protection, Thomas Pahl, called "a serious and growing problem".

These are the top consumer scams reported to the FTC in 2016, along with the percentage each made up of the 3 million total scam reports the FTC received.

These are the  3 biggest financial scams in America:  What to know and how to fight back
Source: FTC

Who gets scammed the most? Florida residents reported the highest rate of fraud, while Michigan residents complained the most about identity theft.

Happily for millennials, young people were among the least impacted by scams, with only 12% of the fraud complaints coming from people 20 to 29, versus 20% aged 60 to 69. Here's how to avoid the 3 biggest traps —and what to do if you've been scammed.

RELATED: Here are some essential finance tips everyone should know:

Finance tips you need to know
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Finance tips you need to know
Making your budget work for your lifestyle

"Are you on a laptop all day? Would keeping an excel file or Google doc file help you track your expenses easier? Would it be more convenient to keep an old fashioned pen and paper type of budget? How about keeping a running tab on the fridge so that you are tracking all expenses?

The bottom line is do whatever works for you! Make it as easy as possible for you to stick to your budget by fitting your budget-keeping into your lifestyle." -Everything Finance

Revisiting your goals

"For the few that actually look at their goals again, it’s common to revisit them only at the end of the year. This is a crucial error.  As our circumstances may change day to day and month to month, so will our goals. A lot can change in twelve months, which is why I propose reviewing once a month, or at the very least every three months.

Revisiting also keeps our desires relevant.  It’s helps us remember that we even have them.  Ideas aren’t enough, we must execute.

As the great Thomas Edison said, 'Vision without execution is hallucination.' " -Jiu-Jitsu Finance

Increasing your income

"After you have lowered your expenses, it is time to bring in more income. There are many ways to bring in more income especially during the holiday season. Maybe your full-time gig will let you work extra hours for overtime. In addition, retail stores typically hire for the holiday season. That part time holiday gig could turn into a longer gig...

Retail jobs aren't the only part-time jobs available. There are plenty of other side hustles you can pick up right at home to make extra money like: Freelance Writing, Virtual Assistant, Social Media Management." -Financially Fit & Fab

Turn on your automatic savings

"Another no-hassle way to save is by setting up an automatic transfer to your savings account. By automating your transfer, you're making sure that you don't forget or pay your savings last–and as a bonus–automating your savings means you never "see" that money and subsequently makes it sting a little less.

Two new apps that I am loving lately are Digit (which has a cult following). It automatically transfers money from your checking account you won't miss. I also love Qapital, which has rules you can set to "save the change" from your purchases. I saved over $75 my first month of Qapital, which was really astonishing to me. Click here to give it a try." -Financial Best Life

Develop the habit to spend with cash than card

"To spend with cash is also an actionable way to get out of debt. According to the research on peoples spending with credit cards; it was revealed that those who shop with credit card are impelled to spend more on luxury items because they feel they are paying with “play or fun money”. In other words, people who shop with credit card spends more than required.

Evidently, finance advisors hold a strong stand on this. They strongly advise that people who are working on eliminating their debt should cultivate the habit of spending cash, to avoid being tempted to spend on irrelevant items." -MoneyMiniBlog

Leave your wallet in the car when shopping
"This trick is simple but impactful. When doing any kind of shopping, use cash, and only take the amount of money you want to spend in the store with you. Leave all other cash, credit cards, and debit cards in the car.

This is very powerful, especially when grocery shopping. In addition to the amount you plan to spend, you can consider bringing in a small cushion of a few dollars (in case there are hiccups at the register). You will shop (and spend) completely differently when you only have a hundred dollar bill with you versus a hundred dollar bill and your debit and credit cards.

Don’t give yourself a way to spend more money than you want to — and you won’t." -Hope + Cents

Start and maintain an emergency fund

"There is no fixed formula for how much you should have in an emergency fund. Some school of thoughts say 6 months’ worth is sufficient, some say a year’s worth. Everyone’s situation is different and as such, each strategy should differ. To start however, I would suggest understanding your spending habits, and then implementing a 3-6-9 guideline.

3 Months: If you are single without kids, renting, no car, partially dependent on parents for income or any combination of these factors, start off with a target of 3 months’ worth of expenses for a rainy-day fund.

6 Months: Married, kids under 18, own a house or condo, own at least one car, or any of these combined, the base target should be 6 months’ worth of expenses (if married, base it off the income of the highest earner).

9 months: Self-employed, freelancers, anyone with a volatile job or unpredictable paycheck, 9 months’ worth should be the benchmark." -Investment Conversations

How students should avoid the debt trap
"The easiest way to prevent yourself from falling into the debt-trap is by living within or below your means (that is, not overspending). In addition, it is necessary to do research before getting credit cards (or signing any contract to take on loan/ debt) so that you really understand how it works. As a student, you must learn to treat your credit card with respect.-Investment Conversations
Build a budget and stick to it
"There are many free apps available to help you track expenses, but I always prefer using my own spreadsheets. That enables me to have the most control over what I’m doing. I understand that being able to access your spreadsheet on your phone makes tracking significantly easier, which is why I prefer Google Sheets over Excel. You can download the Google Sheets app and pull up your expense tracker wherever you are to input a transaction or monitor your spending. By combining the expense tracker as separate tabs within the same spreadsheet as the bill tracker, you can have all your finances in one easy-to-access location." -The Budget Boy
Create an automatic savings account for travel.
"Here's how this automated system specifically works for you and your travel fund. Once it's set up, it goes like this:

-Your checking account receives income.

-The next day, your checking account automatically transfers money to a separate (different bank) savings account—aka your travel fund.

-Transfers repeat every month.

-You end up with a big, fat travel fund to see the world." -Take Your Success

Know your interest rates and then lower them
Know Your Interest Rates
If you have anything that you are making payments on every month, you need to know how much interest you're paying. Make sure you know these numbers, too. Ideally, you'll want to pay debts down that have a higher interest rate first. However, there is another school of thought out there that suggests paying the bill with the lowest balance first. I'd say either way is fine as long as you're making progress and as long as the higher interest rate stuff isn't astronomical.

Action: Look at your statements or call the companies to get your current interest rates on all monthly obligations.

Negotiate Lower Interest Rates
If, by chance, you ARE paying astronomical interest rates on any of your liabilities, call and try to negotiate a lower rate. Oftentimes, if you've demonstrated a history of paying on time, the company will work with you to reduce your rate. The only trick is, you have to ask.

Action: Know your numbers and call the companies to negotiate if you're paying high interest rates.

3. Identity theft

Identity theft is when someone represents themselves as you by using your personal identifying information, like your Social Security number or credit card account number to commit fraud or theft.

You may discover unauthorized withdrawals on your bank account and know immediately you are a victim of identity theft. You might find unfamiliar accounts on your credit report or get a strange bill in the mail. These are all signs that your identity has been compromised.

If you've been the victim of identity theft, call the companies where the fraud occurred, place a fraud alert, and report it to the FTC. Then follow the FTC's step-by-step guide to reclaim your identity.

How to protect yourself: To keep it from happening again, always keep your personal financial information secure. Never check financial accounts on a public computer. Always use a password on your mobile phone and any financial accounts you access on it. (And update your passwords regularly,) Lastly, consider getting a shredder for bank statements and other documents that would otherwise end up in the trash, where anyone can find them. The FTC has more tips here.

2. Imposter scams

Imposter scams play on your willingness to believe messages coming from a source that you know — or that you think you know. Thieves pose as friends, a computer technician, a company you've dealt with before or a government agency to induce people to send them money or provide information.

Government imposters are on the rise. Some examples include scammers claiming to be working for or connected with the IRS or the United States Citizenship and Immigration Service or, more boldly, a totally non-existent federal agency called the National Sweepstakes Bureau.

Thieves may also pose as a computer technician offering unnecessary software services or claim they are affiliated with a charity or company. They get you to answer the call or open the email because it seems to be an important message from a trusted source.

How to protect yourself: Fakes are usually easy to spot. First of all, the IRS isn't going to call you if there is a problem with your taxes. They'll send you a letter. What do you do to avoid getting scam phone calls?

Be sure to enroll your cell phone and landline on the Do Not Call Registry. Once you've completed the free registration, there will only be a handful of solicitors that will be able to call you: charities, surveys, political groups and, yes, debt collectors (more on that below). If you still receive unwanted calls after 31 days on the list, you can report them to the FTC.

When it comes to suspicious emails, the best approach is not to reply at all. If you want to report the fraud, go to the website of the service you use directly (not through a link in the email, but through a billing link or internet search), then call or chat with a representative online to report the incident.

If a friend sends you an email asking for money, well, it's a scam. You might want to alert them that their email account has been hacked, however.

1. Debt collection scams

Debt collection scams took the top spot. Even if you owe a student loan company or bank money, you have rights when it comes to how they collect it. Debt collectors break the rules by continuously, falsely representing the amount or status of your debt, by failing to send written notice of your debt and by falsely threatening to sue you. They may even try to collect on loans or debts that they do not have a right to collect on or debts that do not even exist. Even using profane language is in violation of debt collection rules.

How to protect yourself: If you are getting any of these kinds of calls, report them to the FTC. That's how companies get sanctioned. Last month a large debt collector, GC Services, was charged with using unlawful tactics to collect on federal student loans and other debts. They opted to pay a $700,000 civil penalty under a settlement with the FTC.

And remember, never wire money to anyone. If you owe them money, always send it in a way that can be traced and verified in case you ever need to fight a fraudulent charge. But most importantly, be careful who you send money to in the first place.

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