Many Scam Victims Don’t Regain Their Money: 5 Steps To Make Your Cash Safer
Did you know over half of the financial scam victims never get the full amount back? According to the Federal Trade Commission (FTC), 2.4 million people submitted fraud reports in 2022 and consumers reported losses of nearly $8.8 billion.
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When you hear about a financial scam, you likely wonder how this could happen to someone. The harsh reality is that scammers are becoming more sophisticated, and anyone can become a fraud victim through one innocent mistake. You could lose your hard-earned money by simply opening the wrong text message or taking incorrect financial advice from someone you trusted on social media.
We’re going to look at five steps to make your money safer.
What You Need To Know About Scam Victims
GOBankingRates recently conducted a survey that revealed that only 46% of scam victims could retrieve the full amount of money they lost. The survey showed that 24% of scam victims were able to get some of the money back, while 31% lost everything.
The data also exposed that 41% of female scam victims were able to get all of their money back, while 49% of men could also get the money. About 26% of male victims and 36% of female victims didn’t get any money back.
The scams included identity theft, financial scams and/or financial fraud. When the participants were asked about financial scams of any kind, 55% declared that they had never experienced any fraud, while 39% admitted to being victims. With only 46% of scam victims being able to retrieve the full amount, we must be more alert for financial scams than ever before.
The age demographic that reported the highest amount of financial scams was 35-44, with 44% of respondents admitting to being victims of some sort of fraud. In the 65 and over demographic, 60% of respondents claimed that they had never experienced any kind of financial scam.
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Financial Scams That You Have To Know About
The scams the respondents were asked about were identity theft, financial fraud and financial scams. We’re going to take a quick look at these financial scams before we can look at how to keep your money safer.
The most common types of identity theft were:
Financial (stolen credit card or any kind of financial information)
Medical (stolen name or health insurance)
Criminal (stolen license)
Synthetic (stolen date of birth)
Child identity.
The 45-54 demographic was hit the hardest, with 39% of respondents experiencing this type of identity theft.
Financial frauds cover the following categories: mail, check, business, investment, charity and disaster, consumer and elder fraud.
The most common financial scams identified were:
Phone scams (false impersonators and bots)
Money transfer scams
Online shopping scam
Social Security scam
Imposter scam
Tax scam
Debt collection scam
Debt relief scam
Romance/dating scam
Cryptocurrency scam
Student loan forgiveness scams
Lottery sweepstakes
It’s worth noting that 20% of respondents between the ages of 20 and 34 were victims of phone scams. When it comes to victims of only financial scams, 43% of women and 45% of men reported experiencing some sort of phone scam. It’s apparent that we have to be cautious when clicking on links or opening up text messages.
How Can You Make Your Money Safer?
It doesn’t look like financial scams will stop anytime soon, so we must do our best to keep our money safer. Here are five steps to make your money safer so you don’t lose your savings.
Protect Your Financial Information
“Be suspicious of emails from people you don’t know, and never click on links in odd emails,” noted Eric Rosenberg, a financial writer, speaker and consultant. “Also, never give personal information out on the phone when you don’t recognize the caller.”
It’s critical that you keep your sensitive financial information confidential. This means you should never share account details or passwords over the phone or through email. Many victims had issues with phone scams because they often appeared to look like legitimate communication from the financial institution.
Here are a few proven tips for protecting your financial information:
Change your banking passwords often. You want to use a highly secure password that you change often. You also want a different password for every service you use.
Check your credit report often. It’s essential that you go through your financial information often to see that everything’s accurate. You also want to ensure that accounts aren’t being opened under your name. You also want to file a dispute immediately to settle issues promptly.
Protect your cell phone and personal devices. You want to ensure you have a strong password and multi-factor authentication turned on so it’s not easy to get into your banking apps.
Double-check email addresses, numbers and links. While a text message or an email may seem valid, you must be extremely cautious. You should be skeptical if your bank or credit card company doesn’t have a history of contacting you.
Don’t share your information with strangers on dating apps. With romance scams and money transfer scams being at the top of many fraud lists, it’s crucial that you avoid sharing your banking details with someone you don’t know. You also have to be on high alert for strangers with creative stories.
Don’t save your credit card information everywhere. As tempting as saving your credit card details everywhere you shop is, you may want to think twice about this.
The most important step to keeping your money safer is to protect your financial information at all costs. You should never share any confidential information through text messages, nor should you trust any communication that seems suspicious.
Be Skeptical of Unsolicited Text Messages or Communication
“The best thing you can do to avoid being scammed out of your money is to always stop and ask yourself if there is any chance that this could be a fraudulent scheme, especially if someone reached out to you,” said Corey from The Fioneers. “The most effective scams prey on victims making rushed decisions. Don’t be afraid to take time to think about it, or even better, consult with a friend or relative when you are uncertain if something is legitimate.”
The survey found that 44% of the respondents who were victims of only financial scams said phone scams were the culprit. These scams include robocalls, false impersonators and bots pretending to be financial institutions or other merchants. If you ever get a suspicious message posing as the government, a financial institution or even an online merchant requesting prompt action, you should look up the customer service number on the official website to contact the source instead of replying.
It’s important to think twice before responding to any communication about your finances. This applies to your bank account, credit card provider and any other possible online merchant. The text message scams also can be extended to identity theft since these scammers often seek confidential financial information about the victim. It’s better to be highly skeptical in this situation because dealing with identity fraud or a financial scam situation could be an extensive process.
Don’t Follow Random Advice on Social Media
“One way to protect your money is to never blindly follow the advice you see on social media,” said Eric J. Nisall, a tax accountant who works with small business owners and regular people. “Most people being paid to promote a product or service don’t always pronounce that it’s a paid message. It could be a terrible product/service/piece of advice, but many of these influencers aren’t discerning and want that payday.”
Social media is filled with financial advice that simply isn’t accurate or just may not apply to your situation. You should always look at the source of information when taking any financial information because you want to be certain that this is a credible source.
Nisall warns that too many consumers are taking financial and investment advice from untrustworthy sources, leading to either fraud or some sort of scheme where it’s difficult to get the money back.
“Make sure to get advice from people who are offering advice or services on that particular subject,” Nisall said. “Financial and legal advice is rampant on social media, but it doesn’t come from qualified sources.”
While someone you follow on social media may pose as a credible source of information due to material possessions, the truth is that you’re not aware of the full financial situation. You don’t want to be submitting your credit card information to purchase some controversial investment strategy or investing your money based on advice from an unqualified person.
Don’t Take Investing Advice From Celebrities
Last October, Kim Kardashian made headlines when she was hit with a million-dollar fine for promoting cryptocurrency to her Instagram followers. The SEC has fined numerous celebrities over the last few years for issues related to promoting investments on social media.
Many celebrities fail to mention when promoting a form of cryptocurrency or any kind of investment that they’re being paid to promote it. This means they’re not sharing this investment opportunity because they believe in the product.
Followers and fans of these celebrities may be enticed to make investments that are financial scams or simply don’t make sense. On top of verifying the sources that you accept financial advice from, you also have to avoid certain types of characters in the social media space.
Never Trust Anything That Seems Too Good To Be True
If anything seems too good to be true, it almost always is. This logic applies to investments that promise high returns with no risks and exclusive event tickets that are difficult to obtain.
Here are financial scams that could fall under this umbrella:
A deal on brand-name clothing that doesn’t seem feasible
Access to tickets to a concert or sporting event that’s difficult to get into
Forms of cryptocurrency that are supposed to provide high returns with minimal risk
Any sort of system that’s supposed to generate easy passive income.
The general rule of thumb here is to accept that enticing offers will require extensive due diligence. You may want to also check in with friends or trusted advisors to see whether an opportunity is a scam or not.
As always, when something seems too good to be true, it’s because it is. If finding lucrative investment opportunities were so simple, these scammers wouldn’t be giving away their apparent secrets to strangers on social media. Once you send your funds to an unknown cryptocurrency wallet, retrieving them will almost always be impossible.
Closing Thoughts
Financial scams are everywhere and don’t seem to be slowing down. It’s more vital than ever that you exercise caution regarding any kind of communication about financial information.
Rosenberg added that it’s important that we follow the news regarding the latest schemes going around.
“Scams are a pervasive problem,” he said, “so it’s important to stay alert and aware of the latest scams and how to avoid them.”
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This article originally appeared on GOBankingRates.com: Many Scam Victims Don’t Regain Their Money: 5 Steps To Make Your Cash Safer
