Fraud, Scams & Identity Theft: Stay Safe

The Most Common Financial Scams Targeting You Right Now

⚠️ SCAMMERS ARE SOPHISTICATED — AND THEY'RE TARGETING EVERYONE

In 2023, Americans lost $10 billion to fraud — a 13-year record. The average victim loses $2,000+ per incident. Young adults are now the most common victims (not the elderly).

🔍 TOP FINANCIAL SCAMS TO RECOGNIZE

PHISHING (Email/Text)
A fake email or text from "your bank," "Amazon," "IRS," or "USPS" says your account has a problem.
Red flags: Urgency ("act in 24 hours"), generic greeting ("Dear Customer"), link to a fake website, bad grammar.
Legit companies generally avoid asking for your password or SSN via email.

IMPERSONATION SCAMS
Someone calls claiming to be the IRS, Social Security Administration, or your bank. They say you owe money or there's fraud on your account.
IRS practice: The IRS generally contacts people by mail first. They typically do not call demanding immediate payment.
SSA practice: SSA generally does not suspend Social Security numbers.
Bank practice: Banks generally don't ask for your account password, full SSN, or card number.

ROMANCE SCAMS
A fake online relationship builds trust over weeks or months. Then the "person" asks for money for an emergency.
Average loss per victim: $10,000. Victims are often embarrassed to report it.

INVESTMENT SCAMS
Guaranteed returns, crypto doubling, exclusive investment clubs, "my uncle works at Goldman Sachs."
If it sounds too good to be true — it often is. The SEC doesn't guarantee returns. Neither does anyone else.

PEER-TO-PEER PAYMENT SCAMS (Zelle, Venmo, CashApp)
"Accidentally" sent you money, please send it back." (The original payment was fraudulent; if you send back, you lose your money.)
P2P payments are generally very difficult to recover once sent, similar to cash transactions.

STUDENT LOAN FORGIVENESS SCAMS
Companies charging $1,000–$2,000 to "apply" for forgiveness available for free at studentaid.gov.

Tip: When in doubt, hanging up and calling back is a safe approach. If someone calls claiming to be your bank or the IRS, hanging up and calling the official number from the back of your card or the official government website can help verify the caller's identity. It's generally considered best to avoid using the number the caller provides.

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Identity Theft: Prevention, Detection & Recovery

🪪 YOUR IDENTITY IS A VALUABLE ASSET — PROTECT IT

Identity theft occurs when someone uses your personal information — name, SSN, credit card number — to commit fraud. Recovery can take months and hundreds of hours if you're unprepared.

🔒 CREDIT FREEZES ARE A COMMON PROTECTION TOOL

A credit freeze (also called a security freeze) locks your credit file so no new credit can be opened in your name — even with your SSN.
It's FREE. It doesn't affect your credit score. You can unfreeze instantly when needed.

How many people freeze their credit at all three bureaus:
1. Equifax: equifax.com → Security Freeze
2. Experian: experian.com → Freeze
3. TransUnion: transunion.com → Credit Freeze

Many people also freeze with NCTUE (telecom), SAGE (insurance), and ChexSystems (banking) for more comprehensive protection.

🚨 COMMON WARNING SIGNS ASSOCIATED WITH IDENTITY THEFT
- Bills for accounts you didn't open
- Unfamiliar charges on your bank or credit card statements
- Credit score drops unexpectedly
- IRS notification that someone filed taxes with your SSN
- Collection calls for debts you don't recognize
- You're denied credit you expected to qualify for

📋 COMMON RECOVERY APPROACHES IF IT HAPPENS

Step 1: File a report at IdentityTheft.gov (FTC official site) — it creates a recovery plan
Step 2: Many people freeze their credit at all three bureaus immediately
Step 3: Placing a fraud alert is common (warns lenders to verify your identity before opening new accounts)
Step 4: Reporting to local police is often recommended (useful for some bank disputes)
Step 5: Contacting companies where fraud occurred and disputing fraudulent accounts
Step 6: Filing a complaint with the CFPB at consumerfinance.gov is common
Step 7: Monitoring your credit monthly for 12–24 months after is a common practice

💡 COMMON DIGITAL SECURITY PRACTICES
- Using unique passwords for every financial account (many people use a password manager)
- Enabling two-factor authentication (2FA) on all accounts is a common practice
- Avoiding public Wi-Fi for banking is widely recommended
- Shredding documents with financial information before discarding

Tip: Freezing your credit at all three bureaus is a helpful step — it takes 15 minutes and costs nothing. If you've never done this, it's a straightforward way to reduce identity vulnerability. You can temporarily unfreeze it any time you apply for credit.

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Digital Money Safety: Protecting Your Accounts Every Day

📱 YOUR PHONE IS YOUR BANK — PROTECT IT ACCORDINGLY

Most financial fraud now begins with a compromised device, password, or account. Here's how many security experts recommend building layered protection.

🔑 PASSWORD SECURITY

The average person uses the same password on 7 accounts. One breach can expose all of them.

✅ USE A PASSWORD MANAGER
Bitwarden (free), 1Password, or Dashlane are commonly used — these apps generate and store unique, random passwords for every account. You remember one strong master password; the app handles the rest.

✅ STRONG PASSWORD STRUCTURE (if creating manually)
- 16+ characters minimum for financial accounts is a common recommendation
- Mix of uppercase, lowercase, numbers, symbols
- Avoiding password reuse across sites is generally considered important
- Avoiding personal info (birthday, name, city) in passwords is a best practice

🛡️ TWO-FACTOR AUTHENTICATION (2FA)

2FA requires something you know (password) + something you have (your phone).
Even if someone has your password, they typically can't log in without the second factor.

Best to least secure 2FA options:
1. Authenticator app (Google Authenticator, Authy) — generally considered most secure
2. Physical security key (YubiKey) — often considered most secure for high-value accounts
3. SMS text code — better than nothing, though SIM swapping can potentially bypass it

Enabling 2FA on these accounts is a common approach: bank accounts, email, brokerage, retirement accounts, tax software.

💳 CARD SECURITY
- Using virtual card numbers for online purchases (Privacy.com generates disposable card numbers) is an option many people choose
- Enabling transaction notifications can help catch fraud within minutes
- Locking/unlocking your card via app when not in use is an approach some people use
- Using tap-to-pay instead of swiping (encrypted, no card number transmitted) is often recommended
- Disputing fraudulent charges promptly is a common approach — credit cards typically have $0 liability; debit cards generally have more limited protection

📊 WHAT TO DO IMMEDIATELY AFTER A DATA BREACH
1. Changing your password on the breached site (and any site with the same password) is typically recommended
2. Enabling 2FA if you haven't is a common next step
3. Monitoring financial accounts for 90 days is a common approach
4. Checking HaveIBeenPwned.com to see if your email was in any known breach can be helpful

Tip: Setting up transaction alerts on every bank and credit card account can be effective — most apps let you get a notification for any charge over $1. These alerts can catch fraud within minutes rather than months, making them a useful fraud detection tool.

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