Common scams everyone should be aware of before it’s too late

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In a Nutshell

Fraudsters are always formulating schemes and tricks to target consumers’ hard-earned dollars. IRS imposter scams, lottery scams, romance scams and grandparent scams can be convincing at first glance. Keep reading to learn the warning signs as well as tips to help protect yourself and your wallet.

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We’ve all gotten those robotic calls with unrecognizable phone numbers that scream “scam!”

Easy to ignore and send to voicemail, or better yet, block. No harm done, and you don’t have to deal with some pushy con artist trying to get into your wallet. Yet, according to the Federal Trade Commission, consumers reported losing more than $905 million in 2017 to fraudsters. How are so many people falling for these scams?

The answer is that a lot of folks just don’t know how to protect themselves. Knowledge is power. Scammers may be trying to steal your identity and hard-earned money, but you can educate yourself to become less of a target. Continue reading to learn about a few of the common scams that have been all too lucrative for these tricksters. These swindles include IRS imposter scams, lottery scams, romance scams and grandparent scams.

The IRS is calling you. Can you be sure this isn’t a scam?

In 2013, the Internal Revenue Service made consumers aware of a phone scam across the nation: An imposter, posing as an IRS representative, tells the targeted victim that money is owed to the IRS, saying that a payment has to be made immediately via pre-loaded debit cards or wire transfer. If the target questions the imposter or refuses to cooperate, they are berated with threats of arrest or even deportation. How scary, right? I mean, who wants to owe the IRS money and have to deal with potential arrest?

That is exactly how fraudsters want you to think and feel. They want to have you make split-second decisions before you have time to think it over rationally. Here are a few tips to help you avoid falling for this IRS imposter scam.

  • The first thing to know about the IRS is that it will not initiate contact via phone to demand immediate payment using a specific payment method. In addition, the IRS will not contact you through email, social media or text message to request personal or financial information. If you owe money, the IRS will generally contact you via the U.S. Postal Service — aka snail mail.
  • As intimidating as the IRS may seem, the organization will not threaten to arrest you over outstanding balances.
  • The IRS will not require payment via gift cards, prepaid cards or wire transfers. If these payment methods are required, it’s a good sign it’s a scam.

To speak to a live IRS employee about any questions you may have, the agency can be contacted at 1-800-829-1040. The IRS urges consumers to report scams to the Treasury Inspector General for Tax Administration and to file a complaint with the Federal Trade Commission. Reporting these scams can help the government detect patterns of fraud.

You’ve just won the Jamaican lottery! But you never bought a ticket.

I think we can all agree that we’d love to win the lottery. The chances of that happening are one in a million — actually several million. Yet unfortunate scam victims receive that phone call, email or piece of mail and think they’ve finally hit it big. The U.S. Postal Service regularly intercepts pieces of mail containing foreign lottery scams. According to the U.S. Postal Inspection Service, consumers report losses of roughly $120 million a year to lottery scams.

Lottery scams focus on our excitement and greed. The fraudster is likely going to play on those emotions — they’re excited to tell you about an awesome opportunity. They might rattle off tons of information in a short amount of time, hoping to confuse you. They’re also going to tell you that to receive your huge winnings, you need to buy a lottery ticket or pay a minimal fee — whatever their word of the day is. Following these tips can help you avoid falling victim to a lottery scam.

  • Remember that playing a foreign lottery via mail or phone is actually against federal law.
  • Be extra cautious about any demand for payment required to receive winnings.
  • Do not give out your personal identification information, bank account data or credit card numbers to receive winnings.
  • And if you didn’t play the lottery, you most likely didn’t win the lottery.

You found the love of your life online. Now that person is asking you for money.

Online dating and social networking sites have opened new paths to finding that special someone. People across the world use the internet to meet each other without leaving the comfort of their homes. Despite many successful relationships blossoming from online dating, there are also many fraudsters looking to start relationships with only one thing on their minds —your money.

The FTC reported that heartless scammers claimed $220 million from online dating scam victims in 2016, and that reports to the FBI tripled from 2012 to 2016. Below are some signs that the person you’ve fallen for might be in it for the wrong reasons.

  • The relationship progresses quickly. “I love you” is used almost right away.
  • You are pushed to move your conversation off the dating site.
  • The person claims to be from the U.S. but is overseas on business or serving in the military.
  • Plans to visit constantly fall through because of unexpected circumstances.
  • The person requests money for an emergency or to pay for travel to visit you.

If you are asked for money once and you send it, it’s almost guaranteed that you’ll be asked again. Remember: Once you’ve sent money via pre-paid debit or gift card, it’s probably gone forever. So make sure you think before you send.

Romance scams can not only break the bank but also your heart. These fraudsters often specifically target individuals who are lonely. It can be a tough pill to swallow to think that you got scammed by someone you once trusted and confided in.

If you’ve been the victim of an online dating scam, report it to the dating website or app, the Federal Trade Commission and the FBI’s Internet Crime Complaint Center.

A grandparent’s worst nightmare: A grandchild is in trouble

The grandparent scam, also known as the family emergency scam, is pretty scummy on the fraudster spectrum (which is already pretty bad). This scam targets what we hold near and dear to our hearts: family.

A fraudster may pose as a loved one, distant family member or grandchild, stating that an emergency has occurred. Maybe there’s been an arrest or a horrible accident, or help is needed to get back home. Fraudsters may even go as far as posing as a law enforcement official who is allowing the panicked “loved one” to say a few words. No matter the emergency, the only solution posed in this fraud is to send money.

As dreadful and convincing as the phone call may sound, take a deep breath and remember these few tips.

  • Verify that the call is truly an emergency — reach out to other family members or friends for confirmation.
  • If a law enforcement agency or government entity is mentioned, contact the entity yourself to verify the information.
  • Do NOT wire money. A money wire is like sending cash. Once it’s gone, it’s gone.
  • Know that threats of secrecy or punishment if the request isn’t met are a red flag that you’re dealing with a scam.
  • If the call is from a “family member,” ask the person questions a stranger wouldn’t know.

The FBI’s Internet Crime Complaint Center has been receiving reports of the grandparent scam since 2008. While the concept of the scam itself is an old trick, fraudsters have reached new levels of cleverness with the assistance of social media.

Social media stalking is no longer only for a jealous ex. A few minutes spent on a social media page can reveal many personal details about the account holder. Someone can learn about where you live, the names of your family members, and physical descriptions of family members posted in pictures. That’s why it’s important to periodically review your privacy settings on social media.


Bottom line

The common scams mentioned in this article are only the tip of the iceberg in relation to the number of scams people get hit with day in and day out. If you feel that you have been a victim of a scam, don’t keep it to yourself. Report all the details to the appropriate entity. Check out these websites for informative tips: the Federal Trade Commission, the Federal Bureau of Investigations and the IRS.

Trust your gut. If something seems too good to be true, it most likely is.