The following article has been partially excerpted from the latest issue of Cabot Money Club Magazine. To learn more about the most common financial scams, how to protect yourself, and the other financial schemes that can cost you money, subscribe today.
It seems that every time I turn on the television, read the newspaper, or check my emails, I’m being warned about scams and schemes designed to part me from my hard-earned money.
While the internet has been a wonderful invention in many ways, it’s also provided a thoroughfare for scammers and other criminals to make some quick dough.
The FBI reported that in 2024, losses due to online scams and other internet crimes reached a record $16.6 billion.
Fraudsters Have Victimized 73% of Americans
In a recent study, Pew Research noted that a whopping 73% of U.S. adults have been the victims of credit card fraud, ransomware or online shopping scams.
They also found that 30% of Americans have endured a significant impact of such scams on their financial health.
And 74% of folks never report the scam, due to:
- Shame and embarrassment at being deceived.
- Fears by the older generation of losing their independence if their kids think they can’t manage on their own.
- Not knowing where to report the fraud.
- Belief that law enforcement won’t do anything about it.
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Heartbreakingly, our seniors are rapidly finding themselves the target of scammers. In 2024, elder scams amounted to reported losses of $4.84 billion, according to the FBI, and have grown 400% since 2020. However, the Federal Trade Commission (FTC) says the estimated real losses may be as high as $81.5 billion, due to large-loss investment and imposter scams.
The number and types of scams are expanding at a frightening speed and are way too numerous for one article, but we wanted to share five common signs of a scam to help our readers avoid the most common tactics that scammers use online.
5 Common Signs of a Scam
Better safe than sorry, so if you experience any of these tactics—courtesy of the Texas Attorney General—it’s probably best to just stop and hang up or simply walk away.
- They contacted you. Don’t be taken in by someone who sounds like they know you or who knows a lot about you. And don’t click on anything in a message.
- They dangle bait—usually money. Listen; almost nothing in life is free!
- They want your personal information—bank accounts, Social Security Number, etc. Don’t give this information out—you may become a victim of identity theft.
- You have to pay them first. If someone offers you a prize, debt relief, or employment — but first you have to pay an upfront fee to get it —you’re probably being scammed.
- You have to wire money or send gift cards. Nope; it’s a scam. A few years ago, I sat on the Board of Directors as the Treasurer of the local Realtor Association. And almost every week, I received a text message from the President of the Board, asking me to send him gift cards. When I received the first message, I knew this was something he would not do, so I called him to let him know, so that he would be aware he had been hacked. It’s easy to spoof phone numbers and email addresses, so just because it looks like the message is coming from someone you know, that is not always true. Verify, verify, verify!
Scams have been around seemingly forever, with the first recorded incident of financial fraud dating back to 300 BCE, when a Greek sea merchant named Hegestratos unsuccessfully tried to sink his own ship for an insurance-like payout. And with artificial intelligence running rampant today, we can expect a lot more action from fraudsters.
Bottom line, if you think you are a victim of a fraud, do yourself—and others—a favor by reporting it to:
- Your local police department
- Your state Consumer Protection Office
- The FBI
- The FTC
- The Better Business Bureau Scam Tracker
Remember, if it sounds too good to be true, it most likely is!
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