April is Financial Literacy month. As the month draws to an end we share one of the most commonly overlooked topics in financial literacy: the cyber scam. Learn about common cyber scams and how to identify cyber scams to protect your finances.
You work hard for your money. It may have taken years to build your wealth or maybe you are still building your wealth. Now imagine that all of your hard work is ripped away by scammers in one moment. Many unsuspecting victims have fallen prey and lost considerable amounts of money to cyber scams. According to the 2021 Internet Crime Report, $6.9 billion was lost to cyber scams in 2021- a 64% increase from 2020. Scammers are using innovative ways to commit cyber crime and fraud. These scams may be sent via unsolicited email, text messages, social media, websites or telephone calls. Do you know how to identify a cyber scam and protect yourself from being victimized? We share some of the most recent and common cyber scams, and tips to help protect your money.
IRS & Social Security Scams
In 2020, this was the most common cyber scam. Scammers may pose as government officials, assert that you owe money and make aggressive demands. These scams typically target elderly victims via phone calls. For example, someone may call and pose as a representative from the IRS or Social Security Administration (SSA). Next they state that the victim owes thousands of dollars in back taxes or that they have a fine from Social Security. To appear credible, the caller may provide the victim’s address, banking information or partial Social Security.
In one version of the scam, the caller informs the victim that the Social Security number has been linked to a crime involving drugs or sending money out of the country illegally. Next, the victim may be informed that their Social is blocked. Then they may be asked to pay a fee to reactivate it, or to get a new number. Finally the scammers may become aggressive and threaten arrest or account liens if the victim refuses to comply. This can cause increased distress in elderly targets and they may comply to avoid legal action.
The IRS and SSA will not contact you via phone nor call and ask you for your Social Security number. Never provide your Social Security number to anyone that calls you. Additionally, do not provide any personal information such as a social, address or banking information.
Smishing Cyber Scams
Be wise…text scams are on the rise
“Free Msg: Your bill is paid for March. Thanks, here’s a little gift for you…” read one of the seven scam text messages that I received during a 24 hour period. The text message was sent as a group chat to multiple other numbers and prompted us all to click on a malicious link. Here’s how the scam works, if a user clicks on the link, the website requests personal information such as a credit card number which would result in financial losses. Cyber scam by text is a popular tactic that fraudsters utilize to bait individuals into handing over money or downloading malware. It’s called smishing.
“Smishing” is a combination of the words “SMS”-short messages service-and phishing. Smishing scams may impersonate financial institutions or other reputable businesses and include a link or phone number to bait you into clicking or calling. The scammers manipulate your personal information, which they can sell and/or use in other scams.
A popular smishing scam involving the payment app, Zelle, was recently covered in The New York Times. According to the article, Zelle users were scammed by fraudsters impersonating their financial institutions and subsequently lost finances that their banks refused to replace.
According to the New York Times, in March, 11.6 billion scam messages were sent on American wireless networks, up to 30 percent from February. If you receive a suspicious text message from someone posing as a financial institution, agency or other business, ignore it and contact the financial institution or agency to verify the information. If you are a T-Mobile, AT&T or Verizon user, report the scam text by forwarding the information to 7726.
Mobile Payment App Cyber Scams
Over the last several years mobile payment apps such as Zelle, Cash App, Venmo and PayPal have grown in popularity. They are easy to use and convenient. Their popularity makes users prime targets for scammers to exploit. Scammers may use the following tactics to trick mobile payment app users:
- Pretend that you won a prize or a sweepstakes and need to pay some fees to collect it
- Inform you that a loved one is in trouble and they need you to send money
- Tell you that you owe taxes to the IRS
- Impersonate tech support and need money to fix a problem with your computer
- Pretends to be a romantic interest and needs some money
Cash App does offer a periodic sweepstakes on Twitter and Instagram, and who doesn’t like free money? It may be difficult to distinguish a scam from an official sweepstakes. Therefore remember that Cash App will never require you to send them money for their sweepstakes nor do they require your PIN or login credentials. Only send payments to trust and confirmed contacts. Do not share personal information Never share your login credentials with anyone, not even friends.
Employment Cyber Scams
There has been a significant increase in employment scams targeting individuals under 40. Scammers typically target college students and make promises of lucrative employment offers with vague job descriptions via email, social media, job websites or media.
A common employment scam is the secret/mystery shopper or gift card scam. For example, the victim may receive an unsolicited email, text or call informing them that they can make up to $500-$1000 weekly as a mystery shopper or by purchasing gift cards. The victim provides financial information or makes purchases with the promise of reimbursement or payment. The individual never receives payment or reimbursement and loses money. Scammers may even ask for your social security number and banking information which can lead to identity theft. This may be distressing for job seekers, but you can protect yourself from this scam.
Remember to never pay for employment, unless it is a civil service job that requires a paid examination. Hiring applications should not require your social security information or bank account numbers. If you share your personal data like banking information, freeze your account and change your account passwords immediately. “On the spot” job offers are usually too good to be true.
How to protect yourself from cyber scams
- Keep your guard up!
- If you receive an unexpected email or text message that asks you to send money, don’t click on any links
- Never pay someone who you don’t trust for something promised to you in the future
- Do not respond to texts, calls or emails from unknown senders, or any others that appear suspicious.
- Never share sensitive personal or financial information via text, email or the phone.
- If you receive a text from a friend that contains a suspicious link, call them to verify.
- If a business sends you a text or email that you weren’t expecting, call them to verify its authenticity using the number on your bill or statement, or look up their number online.
- Remember that government agencies almost never initiate contact by phone or text.
- Report texting scam attempts to your wireless service provider by forwarding unwanted texts to 7726 (or “SPAM”).
Cyber scams can cost you money, time, peace of mind and security. Remember, if you receive any unsolicited calls, emails or texts that pressure you to take immediate action, it is probably a scam. The best way to avoid falling prey to a cyber scam is financial literacy. Education drastically reduces your vulnerability. Educate yourselves and loved ones about these cyber scams. And remember to trust your instincts, if it feels suspicious or too good to be true, then it probably is.
If you think you’re the victim of a cyber scam, report it immediately to your local law enforcement agency and notify your wireless service provider and financial institutions where you have accounts. If you receive any scam calls, emails or texts report them to the Federal Trade Commission. Additionally, you may also file a complaint with the FCC.
By: Dhanya Bell
Not sure where you stand with your finances? Find out today by taking the Money Persona quiz.