The top scams to guard yourself against during the coming year.

Many scammers and people with ill intent are out there, no matter where you are. You either pass by them on the street or encounter their veiled attempts online. This is unlikely to change any time soon, and what’s worse is that scammers are learning to use technology to their advantage. The first step to avoiding scams is becoming aware of them.

The past year saw a difference in how scammers approach their victims. However, the foundation remains true; they prey on people who are vulnerable, or unaware of the scammer’s practices, to believe what they’re selling. Here are scams to watch out for and what you can do to protect yourself.

E-commerce Scams

The increase in popularity of online shopping means that there are now significantly more people buying from e-commerce sites than ever before. All that money going into these websites will attract scammers of different kinds. One thing shoppers must maintain is diligence before paying for any goods online. Here are some of the ways scammers can try to take your money:

Fake Accounts

Fake accounts will try to use the same name and pictures as the original storefront. They’ll fake information and try to duplicate another profile to make it look legitimate. The easiest way to spot them is the absence of reviews on their site. Be careful about buying from new profiles because they may not sell anything and are just there to try and catch a few people off-guard.

What’s worse is that they may have setups to try and steal credit card information and the like. Don’t click on links that send you to separate websites. When you want to buy something, visit the original webpage and search there.

Pay First Scams

It gets even worse on websites that rely on interaction for selling. A big example is Facebook Marketplace, which has become highly popular in the last three years. Usually, interactions there have you talking to another account about something you want to buy. You’ll set a deal, pay them the money, and they’ll ship the goods to you.

However, they may not send anything at all and block you once you send the payment. The best way to sift out the scammers is to check for reviews once more. You should be aware of sellers that don’t have any ratings. Don’t be afraid to ask for additional pictures or request photos with signatures and timestamps to verify they have the item.

An alternative is to meet up in person if they’re close enough. Meet at a public place and bring someone along with you. You’ll immediately notice a shift in the scammer’s behavior as they’ll try to sell the idea of you sending the money first. They’ll make all sorts of excuses to try to separate you from your money.

Student Loan Forgiveness Scams

In 2022, the US government began its efforts toward student loan forgiveness by opening applications to those eligible for it. Scammers are taking advantage of this by approaching people and pretending to represent the government. They may even use fake IDs or fake websites. They’ll likely spend most of the call convincing you they’re a government representative.

With these scams, they tend to ask for your personal information, such as your Social Security or bank account details. Over time, they’ll become more forceful and pressure you, trying to convince you that time is running out. A US Department of Education staff member will never proactively call you or ask for your information.

You can only apply for student loan forgiveness by going to the department website directly. There, you’ll get exact instructions for how to do it.

Send Crypto Scams

Cryptocurrency hype may have died down because of the market, but it hasn’t stopped scammers from being at large. During the peak of Bitcoin’s rise, many were flooded with text messages and emails saying they’d won free crypto.

These messages will likely only lead you to phishing websites to steal your information. Some will even give their digital wallet address, hoping you’ll send them your hard-earned cryptocurrency.

Take it a step further, and you have people combining these send crypto scams with the classic romance scam. A random stranger may build rapport with you online, fooling you into a romance, then begin asking for crypto. They’ll tell you their entire village is sick or they need money because they’re poor.

There are several ways to discover the scam. You can call them directly to clarify if you’re talking to the expected gender. You can also reverse image search to see if other online accounts use the same photo.

It is very strange for people to ask for crypto specifically. Criminals know these transactions are hard to track, which is why they’re trying to take advantage of people. Be careful with strangers online.

Interest Rate Reduction Scams

People encounter getting calls or emails from someone pretending to be part of the government or a credit card company. They’ll tell you they’re offering a new program that can lower your interest rates for upcoming payments. All you have to do is send payment to a specific address. Some will even ask you for details like your Social Security or bank account numbers as they’re trying to steal your identity.

According to the FTC, any form of outreach to ask for an interest rate reduction is considered fraudulent. Everything they are offering is something you can do yourself. What’s worse is that the scammers will get your money and may not even do anything for your interest rate.

These scammers usually target people with lower credit ratings because they’re likely in debt. They’ll pretend to be a third-party company, or someone accredited. Ignore any contact like this. The only way to lower your interest rates is by calling the company directly.

Mobile Phone Scams

Phone scams are also very common coming into 2023 because nearly everyone owns a phone. Scammers will try to hack into your mobile phone to install malicious software or gain authorization over your accounts.

Some scammers are using technology used by phone providers to transfer your number into another sim, creating a duplicate. That way, they can steal your information and log into websites that require mobile authentication. One of the ways you can protect yourself against this is by using other authentications than SMS. Some businesses have begun adopting email authentication and other methods.

Another way scammers try to trick people is by sending one-time passwords. They’ll contact you using a robot who’ll impersonate someone from a legitimate company. It will then ask you to input a code sent to your mobile device to authenticate your number. The scammer is likely using the robot to gain an OTP they can use to access your accounts.

When you suspect someone may have hacked into your account, freeze your sim card. You can do this by contacting your mobile phone operator and preventing the scammer from doing any more damage.

Phishing Scams

Phishing scams remain a consistent problem, and criminals are using them to try and fool those who don’t know about them. There are many ways for them to try and phish information out of you. One of the most common ways is sending you a fake link duplicating a website or app. It will ask you to log in again, sending your details to the scammer. From there, they’ll try to steal your money and personal information.

They will try to commit fraud, using your identity and payment information to purchase online. The most common victims are senior citizens who may not be as savvy with technology as the younger generation. This is something that people can easily avoid once they know how it works.

Be wary about clicking unfamiliar links. A tactic used by scammers is pretending they’re representatives of your bank and sending you a link to phish your information.

Payday Loans and Short-Term Online Lenders

Payday loans have been popping up in recent years, and they’re one of the most dangerous loans out there. Think of it as a fancier loan shark that can spiral you into debt. They target people short on money by offering fast loans with a promise that you’ll pay them on the next payday. However, the interest rates are extremely high, and you might lose your salary because it feeds into the loan.

While legitimate companies use this controversial practice, there are also scam versions. When you’re talking to a representative, be wary of people asking for loan fees when you’re just trying to inquire or talk to them. These fees aren’t going anywhere except for their pockets. They might even offer you something in return, like a gift card.

These kinds of scams can happen with traditional loans too, but they’re more common with payday loans. The reason is that it’s easier for them to fool someone desperate to get money. Payday loans should never be an option because they’ll get you into debt more than they’ll help. For those trapped in the payday borrowing cycle, organizations like Money Fit can help consolidate your payday loans without the need for additional loans, you may want to reach out for assistance.

Stay Diligent

Avoiding financial mistakes is all about gaining knowledge from the experience of others. You become increasingly aware of people trying to take advantage of you by seeking knowledge. You can learn to avoid them and have fewer encounters with scammers over time. Don’t be afraid to seek professionals for second opinions, as they may give you a clearer picture of what you’re experiencing.

Finny the Finance Bot says…

What are some of the top scams to guard yourself against during the coming year?

Scammers are constantly finding new ways to defraud individuals, but some scams tend to be more prevalent than others. Here are a few scams to guard yourself against in the coming year:

  1. Imposter Scams: Scammers pretend to be someone you trust, such as a government official, a charity, or a company you do business with, to steal your money or personal information.
  2. Online Shopping Scams: Scammers create fake websites or ads that offer great deals, only to take your money and never deliver the products.
  3. Investment Scams: Scammers promise high returns on investments but instead steal your money.
  4. Tech Support Scams: Scammers claim to be tech support and ask you to give them remote access to your computer or to pay for unnecessary software or services.
  5. Debt Collection Scams: Scammers pretend to be debt collectors and threaten you with arrest or legal action if you don’t pay them immediately.

It’s important to be vigilant and protect your personal information. If you’re unsure about a request for money or personal information, take the time to verify the identity of the person or company making the request. If you believe you’ve been the victim of a scam, contact your local law enforcement and report it to the Federal Trade Commission (FTC).

The author generated Finny the Finance Bot’s text in part with GPT-3, OpenAI’s large-scale language-generation model. Upon generating draft language, the author reviewed, edited, and revised the language to their own liking and takes ultimate responsibility for the content of this publication.

Recommended Viewing: Inside a Scam Call Center

The video below shows you precisely how a call center scam works and may be helpful in keeping you aware of the warning signs, should you receive a call or communication from a scammer in the future.

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Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
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  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
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DRS also offers the following services:
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Relationships with Industry Partners

Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

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The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through MyMoney.gov or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at www.hud.gov/findacounselor.
Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).