Can you spot these 3 common scams?

Scams have been getting harder to spot in recent years, as fraudsters adapt and make use of new technology.

In fact, while reports of attempted fraud have remained stable in recent years, the percent of people who have lost money to fraud has increased—suggesting that it's grown harder to recognize a fraud before becoming a victim.¹

While scams are always evolving, scammers often rely on the same strategies to play on human emotions and lure their targets in. Consider these red flags to be a warning for potential fraud anytime you encounter them:

• You receive an unexpected communication that asks you to take urgent action—online or in a financial account.
• You receive an offer that seems too good to be true.
• You are put under pressure to send money or provide information quickly, before you have time to discuss with someone you trust.
• You are asked to reimburse a third party for a purported "overpayment" to you.
• You receive a payment request for cryptocurrency, precious metals, gift cards, or bank wires.

The good news is that by educating yourself, learning the warning signs of scams, and proceeding with caution and skepticism, you can protect yourself against many of the most common scams. If something seems fishy, hit the brakes. Wait until your emotions have settled and research what's going on. Fraudsters often use fear or tight deadlines to try to force you into a rash decision.

Here are 3 common financial scams to look out for—and what to do if you think you've become a victim.

1. Impostor scam

One of the most commonly reported scams is impostor fraud, in which a thief poses as your financial institution or another reputable organization to steal your money or identifiable information.

Here’s how the impostor scam may play out: Your phone rings. Caller ID shows that it’s your financial institution on the other end. The caller says that they have seen fraudulent activity in your account and you need to take action right away. They tell you that in order to verify your identity, they will send a code for you to read to them—or you may be asked to type it into your phone or computer.

But it’s not your financial institution—it’s a scammer. Fraudsters can easily make it appear as though they are calling from a trusted organization by manipulating the caller ID—a tactic known as “spoofing.” This means the number you see on your screen may look legitimate, but it’s actually fake. Caller ID alone should never be trusted as proof of identity.

And the code is actually a code to reset your password, so the fraudsters can log in to your account and can steal your money. That's why you should never give away a security code to anyone in any way unless you started the communication.

Even if the caller sounds professional or knows some of your personal details, do not let your guard down. Scammers often use urgency and fear to pressure you into acting quickly, before you have time to think clearly.

To protect yourself:

• If you receive a call, text, or email asking you to take action or share personal information, do not respond.
• Instead, hang up the phone or close the email or text, and go to the website of the financial institution or organization and contact them directly.
• Do not provide or "confirm" any of your personal information.
• Never read back a security code or type a code into a text message (unless you have placed the call to a company's official phone number).
• Never type the security code into your phone or a website unless you are logging into an official app or website.

Remember: If you're ever unsure whether a message or call is real, stop and verify it independently—even if it means hanging up on someone. Use the contact information from your organization's official website or your account statements, not what's provided in the message or call.

2. Confidence/romance scams

In this scam, one person believes they are in a relationship with a family member, friend, or potential romantic partner. As a result, they can be persuaded to send money, personal and financial information, or items of value to the perpetrator.

This scam can take many specific forms. In some cases the scammer starts as a stranger, perhaps someone who sent you a stray text message or who you met online. Over time the scammer uses emotional manipulation—mirroring your values, interests, or emotions—to create a false sense of connection and lower your defenses. In others, a scammer may pretend to be a real person you know, such as a family member. For example, in the grandparent scam, someone calls claiming to be your grandchild and asks that you send them money immediately for an emergency, like an accident or arrest, or any scheme where the perpetrator plays on the victim's heartstrings.

Scammers often create elaborate stories to explain why they can’t meet in person. They may claim to be in the military, working overseas, or dealing with a family emergency. These excuses can seem reasonable at first, but they are designed to build trust while avoiding face-to-face contact. Be especially cautious if the person always has a reason to avoid video calls or in-person meetings.

To protect yourself:

• Agree on a safe word with family members so you have a quick way to verify their identity.
• Never send money or gifts to a sweetheart you haven’t met in person.
• Be aware of the warning signs. The individual may profess love quickly, even though they are "unable" to meet in person; they may try to isolate you from family and friends; they may claim to be working and living far away; and they may prey on your emotions with claims of distress, such as sudden medical bills, travel issues, or legal trouble.
• Take it slowly. Ask questions and look for inconsistent answers.
• Be cautious of unusual requests, such as asking you to download a specific messaging app.
• Talk to someone you trust about this new love interest, and pay attention if your family or friends are concerned. Scammers look for a quick reaction, without providing time to involve trusted loved ones for validation. This makes the interaction high-pressure and isolating.
• Share responsibility among family members for monitoring of accounts and safeguarding important documents.
• If you are a victim of a romance or confidence scam, file a complaint with the FBI’s Internet Crime Complaint Center and call your local FBI field office.

Remember: Real relationships are built on trust and transparency. If someone is asking for money and won't meet you it's a red flag—no matter how convincing their story may be.

Pictures and posts shared on social media can give scammers a wealth of personal information to use against you. Confidence/romance scams can thrive on social media, where scammers may impersonate people you know, comment on your posts, send friendly messages, or use other tactics to try to gain your trust.

3. Shopping / investment scams on social media

Another scam that often starts on social media is an online shopping or investment scam.

In the online shopping version, you may see an ad for an expensive item at bargain-basement prices. After the order is placed you may get something you didn't order. Or you may not receive anything at all.

The investment version can be harder to spot, in part because it can take so many forms. Scammers have hacked social media accounts of celebrities to tell people to send cryptocurrency to them, with a promise that unrealistically high returns will follow. Some scammers set up fake websites to convince people that they're investing in cryptocurrency, but victims who "invest" are never able to get any of their money back. In other cases, fraudsters have created fake cryptocurrency apps that try to imitate real crypto companies. Or an advertisement that purports to discuss a real investment may be a hook to lure people into an investment scam.

Another common feature of investment scams is that they typically require upfront taxes or fees to be paid prior to receiving your earnings. Sometimes scammers ask for multiple upfront payments before withdrawing earnings, but the withdrawal is never allowed.

What these scams typically have in common is that they offer deals that appear too good to be true. Scammers often pressure you to act quickly, claiming that the opportunity is limited or exclusive. They may use flashy graphics, fake screenshots showing high investment returns, or fake success stories to make the offer seem credible.

To protect yourself:

• Always be skeptical of unsolicited offers to invest.
• Be aware that scammers may try to move the conversation off the original social media platform to another one.
• If something seems too good to be true, it definitely is. Avoid anyone who claims you can make big gains with no risk.
• Verify the source of any emails purporting to be from an investment company.
• Don't follow links in emails or click on the link in an ad. Instead, go to the company's official website and contact them directly.
• If you're considering a company you've never done business with, do a search on the internet for the company name along with the word "scam" or "complaints."
• Be cautious of anyone who asks you to download an app or visit a website to "track your investment." These tools may be fake and designed to steal your money or personal information.
• Use sound judgment when interacting with social media investment groups. Some scammers may lurk in such groups, waiting for new victims.
• If you are a victim of a social media or internet scam, file a complaint with the FBI’s Internet Crime Complaint Center and call your local FBI field office.

Remember: Always take the time to research and verify before making any financial decisions. Any investment that promises "guaranteed" high returns is not legitimate. Federal and state regulators have resources that can help you stay aware of scammers' latest tactics, research individuals and organizations, and report suspicious investment offers.

Practice good digital habits

These are just a few of the scams out there; there are many more scams to be aware of. Security measures aren't foolproof, and anyone can suffer a moment of inattention or lapse in judgment. Practicing awareness and taking some basic preventive measures can protect you from the vast majority of attempts to steal your identity or money through fraudulent schemes. Remember to pause and look for red flags before reacting to any unsolicited emails, phone calls, texts, and direct messages on social media asking for money or information—even if they seem to be from someone you trust.