Frequently Asked Questions About Fraud
Tips to Share from Fraud Aware
These FAQs address common types of fraud and provide prevention tips.
Check washing is a type of fraud where criminals steal checks, erase the ink chemically, and rewrite them with different recipients and amounts. They then cash these altered checks, resulting in financial losses for the original account holders. This can happen to anyone who uses checks.
You can make it harder for fraudsters to wash checks by using black or blue gel-ink pens or fine-tip permanent markers for writing checks.
Be aware of offers that seem “too good to be true“. This is a common red flag in many types of scams. Other signs include promises of HIGH-PROFIT with LOW RISK, above-market interest rates, guaranteed high returns, unverifiable testimonies or no track record, evasive answers to questions, no official documentation for verification, or demands for a large upfront investment with vague repayment details. Scammers may also try to create a sense of urgency or use emotional appeals like FOMO (Fear Of Missing Out).
Slow down. Take time to evaluate the situation. Do your research and don’t rely solely on the information provided by the offer. Disconnect from the interaction. If you are unsure, be cautious and avoid the offer. Talk to someone you trust or seek counsel – safety can be found in the multitude of counselors.
Scammers often use high-pressure tactics, threats and intimidation, and claims that you cannot hang up or disconnect. They might say you cannot tell anyone what they want, or claim the situation is urgent. Recognizing the pressure they create is key to bypassing your logic.
The IRS will never demand payment using gift cards, prepaid debit cards, or wire transfers. They generally mail a bill for taxes owed. The IRS will never demand taxpayers pay taxes without the opportunity to question or appeal the amount owed. They will never threaten to bring in local police or other law enforcement to arrest a taxpayer for not paying.
Elderly individuals are often targets of scams. You can help them deter scammers by educating them on common scams in an easy-to-understand way. Encourage them to ask for advice BEFORE committing to a deal, giving confidential information, or responding to a demand. You can also help by setting up bank and credit card account safeguards and helping them review suspicious emails or phone calls.
“The Investment Sheep Test” suggests that “If you would feel sheepish discussing the investment with your fellow church members… you probably should avoid it.”. It also ties into the general principle that if something is too good to be true, it probably is. The desire to be rich can lead to temptation and harmful lusts that can lead to destruction.
Beyond seeming “too good to be true,” watch out for promises of HIGH-PROFIT with LOW RISK, above market interest rates, unverifiable testimonies and no track record, evasive answers to questions, no official documentation for legal verification, and Large upfront investments with vague repayment details.
A passphrase is a long string of words used to gain access to internet systems or services. Passphrases are suggested for security.
Consider changing them regularly, using different combinations for each account, and using passphrase sentences or phrases that only you can easily remember. Utilizing Two-Factor-Security and a Password Manager are also recommended.
Counterfeit postage stamp fraud involves the sale of fake stamps. These are often sold online at a significant discount (20-50% off face value). The USPS does not offer such large discounts on stamps.
The safest option is to buy directly from the USPS or authorized retailers. You can find a list of approved vendors on the USPS website. Avoid third-party vendors, especially on online marketplaces and social media. While some legitimate retailers might offer small discounts through resale agreements, large discounts are a sign of likely fake stamps.
In grandchild scams, a scammer poses as your grandchild, claiming to be in a distressing situation (like being arrested, in an accident, or stranded in a foreign country).
The “grandchild” will plead for immediate financial assistance, often emphasizing secrecy and urgency. They may ask for money to be wired, sent via gift card, or ask for your credit card information. If you receive such a call, hang up and call your grandchild directly using a known phone number. You can also ask questions only your grandchild would know the answer to. Never wire money or send Gift-Cards. Resist the urge to take immediate action, as scammers thrive on urgency.
Mobile malware is malicious software designed for phones and tablets. Types include Viruses, Worms, and Trojans, Adware (displays unwanted ads), Spyware (records device activity without permission), SMS Malware (manipulates texts), and Remote Access Trojans (allow attackers complete control).
Only download apps from official app stores and be cautious with permissions. Only connect to trusted Wifi & Bluetooth networks. Keep your phone/tablet operating system and apps updated. Lock your phone/tablet with a pin, pattern, or password. Log out of sites after making a payment.
Computer cookies are small packets of data transferred to your browser by a website’s server, designed to remember information like your visits and activities. Cybercriminals steal cookies from computers to access accounts, including email. “Remember-Me cookies,” which typically last 30 days and allow login without re-entering credentials, are increasingly targeted by attackers. If a cybercriminal obtains a Remember-Me cookie, they can sign in without needing login details or Multi-Factor Authentication (MFA).
Do not click on suspicious links or websites. Only visit sites with a secure connection (HTTPS). Periodically monitor the recent device login history. Regularly clear your cookies. In place of “Remember Me” checkboxes on a website, consider using a Password Manager.
Texting scams are among the most common ways scammers try to steal personal information. Examples include texts claiming missed delivery notifications, “Is this you?” messages, texts saying your bank is closing your account, messages claiming you’ve won a prize, texts saying your debit or credit card is locked, messages supposedly from the IRS or other government agencies, and texts appearing to be from your own number. Other common scams include texts about unpaid subscriptions, fake fraud alerts about purchases you didn’t make, and two-factor authentication scam texts.
Hang up. Don’t answer in the first place if you don’t recognize the number; they can leave a message. Disengage from the interaction. Talk to a trusted person and let them know what is going on.
Scammers set up fake charities to take advantage of people’s generosity, especially during natural disasters and tragic events.
Before donating, verify their legitimacy. Search for information about the charity online. You can also seek counsel from your legal or financial advisers about verification methods. Be cautious if you are contacted unexpectedly and always verify that they are a legitimate organization.
Monitor your accounts regularly, including bank accounts, credit card accounts, and charge accounts. Set up account alerts offered by many banks and credit card companies that notify you of suspicious activity via phone or email.
Criminals may impersonate government or collections officials and send official-looking requests for payment to resolve fake debts or issues. They might send emails that look like they are from a legitimate company but are not. They might pose as an IRS agent, falsely claiming a taxpayer is linked to criminal activity.
Don’t respond. Don’t click on any links. Block the number. Delete the scam text. Resist the urge to interact with the scammers.
HTTP (Hyper-Text Transfer Protocol) is a standard protocol for connecting a browser and a web server; your browser requests a resource from the server, and the server responds. HTTPS (HTTP Secure) is HTTP’s more secure counterpart because it adds an encryption layer to your web session.
With HTTPS, any information transferred between your browser and the server is encrypted. This makes it almost impossible for anyone to view the information being exchanged. A Scammer-in-the-middle can intercept communication between your browser and a website using HTTP and steal your data or redirect you to a malicious site.
Look for the padlock and “https:” in the address bar. You should never enter sensitive information like credit card details or passwords on a website that is not using HTTPS. Keeping your browser and operating system up to date also helps.
A pig butchering scam is a type of fraud where scammers build trust with victims over time before manipulating them into making fraudulent investments or financial transfers. The term is a metaphor for how scammers “fatten up” victims by gaining their trust and then “slaughtering” them by stealing their money. Victims can become so convinced that they ignore warnings from friends and family.
Warning signs include reluctance to meet in person or via video conferences, undue pressure to transfer money, unusual relationships where scammers shower victims with compliments and affection to gain trust, and promises of guaranteed high rewards with little or no risk.
You might receive a notice claiming a late client or individual with your last name passed away leaving a large cash value benefit with no surviving relatives. The scammer, often posing as an attorney or agent, seeks your consent to present you as potential heirs to receive the payout because you share the same last name.
If you fall for this scam, the scammer will ask for a prepayment under the pretext of “covering the taxes” before the payout can be made. They will continue to make you pay for as long as possible.
This timeless advice encourages diversification and risk management. Diversification in investments reduces risk because if one area fails, others may remain stable. It can lead to more consistent overall results, mitigate the impact of unexpected events, and lower financial anxiety.
These refer to schemes that promise higher than standard returns but are not properly registered with state securities commissions or the SEC. They often lack a written opinion from an attorney confirming compliance with securities and tax laws, and may not have available AUDITED financial statements by an unaffiliated CPA. Such schemes may be managed by one person with no accountability. Hundreds of millions of dollars have been lost in such illegal and high-risk investments that failed.
Confirmation bias is the tendency to interpret new information as confirmation of one’s existing beliefs. Scammers exploit this by targeting your existing beliefs, making their scams appear credible. They take advantage of what you already perceive as true and deceive you into following their instructions.
Scammers utilize threats (such as legal action or loss of funds) to provoke intense fear and an emotional response. This fear can impair rational decision-making.
In this scam, criminals promise to sell your equipment quickly and for more money by advertising it for you online.
They charge you thousands for “listing & setup fees” upfront. After you pay, they do nothing; your items are never advertised online. They may continue to charge you as long as you are willing to pay. This scam has affected numerous businesses. Don’t fall for it.
If you experience random contact, feel urgency or pressure for quick action, are told you are in trouble with the law, your accounts have been hacked, a loved one is in trouble, someone will help keep your money safe, or you’ve won something big, STOP! DISCONNECT! RECONSIDER!. If something seems “OFF,” seek counsel. Be cautious if contacted unexpectedly. Always verify the legitimacy of organizations. Don’t be rushed; slow down and research. Talk to someone for safety. Recognize pressure tactics. Verify independently and don’t trust contact info given by the potential scammer; look up the real organization’s contact information. Never give information or money; legitimate groups won’t demand immediate payment or personal details. If you suspect a scam, hang up, delete the email, block the number, and disengage.