Scam Alert: Protect Yourself from the Latest Fraud Tactics
Scamming is a fraudulent practice where scammers use deceptive and manipulative tactics to trick individuals into giving away their money, personal information, or valuable items. Scammers often exploit trust and use psychological manipulation to achieve their goals.
In the United States, consumers reported losing over $10 billion to fraud in 2023, a 14% increase from $8.8 billion in 2022. Investment scams accounted for $4.6 billion, a 21% rise from the previous year, while imposter scams resulted in $2.7 billion in losses. In Canada, the Canadian Anti-Fraud Centre reported $530 million in victim losses in 2022, nearly a 40% increase from $380 million in 2021. In 2023, Canadian victims lost $569 million to fraud. Only 5-10% of fraud cases are reported, indicating potentially much higher actual losses.
Common Types of Scams You Should Know About
The various types of scams are extensive and cannot be comprehensively covered in this article. As technology advances and social engineering becomes more prevalent, even the most common scams may become obsolete and be replaced by other deceptive tactics. However, let’s explore some of the common scams currently in use.
Were You Scammed, What Made You Vulnerable?
Correlation between Scamming Techniques and Victim Vulnerabilities
Scammers often play on emotions (emotional manipulation) like fear, greed, or sympathy to prompt action.
- Social engineering manipulates people into divulging confidential information. Scammers use fake testimonials and reviews to suggest positive experiences. Social proof or endorsements from public figures like Justin Trudeau, Elon Musk, or Warren Buffet can deceive victims into believing a scam is legitimate.
- Scammers create urgency or fear, pretending to be from reputable organizations like the IRS. They use an authoritative tone to gain trust, exploiting our tendency to trust figures of perceived power or expertise.
- Time-limited offers pressure victims into making quick decisions without proper consideration, exploiting our natural tendency to act quickly to avoid missing out on opportunities.
- Promising large financial rewards on investments exploits the desire for quick wealth. The promise of easy money can cloud judgment and lead to irrational decisions. Offering high returns with no risk lures victims into investment scams.
- The reciprocity principle is used when scammers provide a ‘favor’ or ‘gift’, expecting victims to reciprocate by agreeing to their terms.
- Scammers build rapport by posing as someone the victim knows or trusts, fulfilling basic human needs for security, love, or financial stability. They create FOMO (Fear of Missing Out) with a sense of scarcity or exclusivity.
- Victims often feel too ashamed to report scams, perpetuating the cycle. Shame can lead to reduced awareness and underreporting, making it harder to track and combat scams.
How to Avoid being Scammed
To avoid becoming the victim of a scam or fraudulent scheme, you must first be able to recognize scams. Secondly you should be able to act appropriately to avoid being scammed.
Five Tips to Recognize Scams
Verify the Source- Always verify the legitimacy of the source before sharing any personal information or making any payments. Check the official website or contact the organization directly using a verified phone number.
Look for Red Flags- Be cautious of unsolicited communications, especially those giving financial advise, asking for personal information or urgent payments. Scammers are very skilled but most are not communication experts, so scams often involve poor grammar, spelling errors, and unprofessional layouts.
Check for Authentic Reviews- Use reliable review platforms to check the authenticity of testimonials and reviews. Be skeptical of overly positive reviews that lack detail or seem too good to be true. Check the reviewer’s profile to see if they have submitted reviews for other products or services.
Examine URLs and Email Addresses- Verify the URLs to ensure they match the official domain of the organization. Be cautious of email addresses that slightly differ from the official ones, as scammers often create look-alike addresses.
Authenticate Offers and Promotions- Be wary of time-limited offers that pressure you into making quick decisions. Cross-check offers with official sources to confirm their validity.
Protect Yourself and Avoid being Scammed!
Educate Yourself
- Stay informed about the latest scam tactics and common fraud schemes.
- Follow reliable sources (popular media channels) for updates on new scam trends and prevention tips.
Use Security Software
- Install and regularly update antivirus and anti-malware software.
- Be wary of free offers that require credit card information or downloads that could compromise your computer.
- Utilize browser extensions that flag suspicious websites and phishing attempts.
Multi-Factor Authentication
- Multi-Factor Authentication (MFA) are easy to set up and can include use of password, verification code, security questions, authenticator application, and recognized devices.
- Use two-factor authentication (2FA) for online accounts to add an extra layer of security.
- This can help prevent unauthorized access even if your password is compromised.
- Choose passwords that are difficult to guess, change them regularly, and never share them.
Be Skeptical of Unsolicited Requests
- Do not respond to unsolicited requests for personal information or payments.
- Legitimate organizations will not ask for sensitive information via email or phone.
- Note carefully – Even when conducting business in-person with legitimate organizations you maybe asked to enter your pin or password into a device in order to access your account. However, you should never be asked by any representative to disclose your pin or password.
Secure Your Financial Information
- Use secure payment methods and ensure websites are HTTPS encrypted before making transactions.
- Avoid sharing financial information over unsecured channels such as social media chats or personal emails.
- Use payment methods that offer buyer protection and avoid using direct deposit or transfer method not associated with institution or organization you are conducting business with.
Monitor Financial Statements
- Regularly review your bank statements and credit reports for any unauthorized transactions.
- Setup transaction limits and alerts for your accounts and regularly review pending charges/transactions.
- Report any suspicious activity to your bank or financial institution immediately.
Practice Safe Communication
- Avoid clicking on links or downloading attachments from unknown or suspicious emails.
- When in doubt, contact the supposed sender using a verified contact method to confirm the legitimacy of the communication.
Be Cautious with Public Wi-Fi
- Avoid accessing sensitive accounts or making financial transactions over public Wi-Fi.
- Public Wi-Fi is often unencrypted, and scammers can set up rogue hotspots mimicking legitimate networks. Transmitted data can be easily intercepted by hackers.
- Malware distribution, lack of firewalls, and insecure configurations with public Wi-Fi increase the risk of data theft or device compromise.
- Use a virtual private network (VPN) if you must access sensitive information while on public networks.
Trust Your Instincts! If something feels off or too good to be true, it probably is. Trust your instincts and proceed with caution. Demand to see official identification from anyone claiming to act in an official capacity. Take your time to research and verify before taking any action. Don’t be ashamed, report suspected scams to relevant authorities, such as the Federal Trade Commission (FTC) in the U.S. or the Canadian Anti-Fraud Centre. Reporting scams can help authorities track and combat fraudulent activities, protecting others from falling victim.