Category: Quick Guide / Money & Budgeting

⚡ Recognizing Scams and Fraud

A scam is an attempt to trick you into sending money, revealing personal information, or giving someone access to an account. Fraud occurs when someone uses deception or your information for financial gain.

Scammers constantly change their stories, but their methods are usually similar. Learning the warning signs can help you recognize a scam even when the message looks convincing.

The Most Common Warning Signs

Be suspicious when someone:

• Contacts you unexpectedly
• Creates a frightening or exciting story
• Pressures you to act immediately
• Asks you to keep the situation secret
• Requests personal or financial information
• Demands a particular form of payment
• Offers money, a prize, or an opportunity that seems unrealistic
• Discourages you from contacting the organization directly
• Tells you not to speak with family, bank employees, or police
• Claims your money must be moved to “protect” it

According to the FTC, unexpected contact, pressure to hurry, and demands for particular payment methods are major signs of a scam.

Stop, Leave and Verify

When something feels suspicious:

Stop

Do not send money, provide information, click a link, or download anything.

Leave

Hang up, close the message, or leave the website. You are allowed to end the conversation without explaining yourself.

Verify

Contact the person or organization using information you find independently:

• The number on the back of your bank card
• An official statement
• A company’s official website or app
• A phone number already saved in your contacts

Do not use the phone number, website, or link provided by the suspicious person.

Impersonation Scams

A scammer may pretend to represent:

• Your bank or credit-card company
• The IRS, Social Security, Medicare, or another agency
• A utility company
• Police or a court
• Technical support
• A delivery service
• A familiar business
• A family member or friend

Caller ID, email addresses, logos, and documents can be faked. A caller knowing your name, address, relatives, or account provider does not prove the caller is legitimate.

Government agencies and legitimate businesses will not tell you to transfer money, buy gift cards, or send cryptocurrency to protect an account.

Bank and Account Scams

A message may claim:

• Your account has been locked.
• A suspicious purchase must be verified.
• Your card needs to be replaced.
• Your money is at risk.
• A refund is waiting.
• You must provide a verification code.

Do not click the message’s link or call its number.

Instead:

1. Open the bank’s official app or website yourself.
2. Check your account activity.
3. Call the number on the back of your card.
4. Ask whether the bank contacted you.

Never move money to another account because a caller says it is necessary for protection.

Payment Warning Signs

Stop if someone insists that you pay using:

• Gift cards
• Cryptocurrency
• A wire transfer
• A payment app
• Cash sent through the mail
• A bank transfer to an unfamiliar account

These payment methods can be difficult to reverse.

Never give someone the numbers or security code from a gift card. Gift cards are for giving to someone—not paying taxes, fines, bills, technical support, or government agencies.

Family Emergency Scams

A caller or message may claim that someone you care about:

• Was arrested
• Had an accident
• Is stranded
• Needs medical help
• Lost a phone
• Needs money immediately

The voice, photograph, phone number, or account may appear familiar.

Before sending money:

1. End the conversation.
2. Call the family member directly.
3. Contact another person who can confirm the situation.
4. Ask a question a stranger would not know.
5. Do not accept instructions to keep the emergency secret.

Create a family verification word for use during genuine emergencies.

Prize and Lottery Scams

Be suspicious if you are told that you won something but must first pay:

• Taxes
• Processing fees
• Shipping costs
• Insurance
• Customs charges
• A deposit

You should not have to pay to receive a legitimate prize. A foreign lottery, contest you did not enter, or request to keep your winnings secret is especially suspicious.

Job and Work-From-Home Scams

Warning signs include:

• Being hired without a meaningful interview
• Paying a fee to begin working
• Purchasing equipment from a specific seller
• Depositing a check and returning some of the money
• Receiving packages and forwarding them elsewhere
• Being asked to transfer money for the employer
• Providing banking information before verifying the company
• Promises of high pay for very little work

A check can appear in your account before the bank discovers that it is fake. If you send part of the money elsewhere, you may still be responsible for the loss.

Shopping and Marketplace Scams

Be careful when:

• The price is far below the usual cost.
• The seller accepts only hard-to-reverse payments.
• The website has no verifiable contact information.
• A buyer sends too much money and asks for a refund.
• Someone sends a payment notice that does not appear in your actual account.
• You are asked to communicate or pay outside the marketplace.
• The seller creates pressure by claiming many people are waiting.

Check the payment directly in your account. Do not rely on a screenshot or payment-confirmation email.

Romance and Friendship Scams

A scammer may build an online relationship before requesting money.

Possible signs include:

• Avoiding in-person meetings or live video calls
• Claiming to live or work far away
• Developing intense feelings very quickly
• Having repeated emergencies
• Requesting money for travel, medical care, investments, or customs fees
• Asking you to receive or transfer money
• Pressuring you to keep the relationship private

Do not send money or financial information to someone you have not independently verified.

Investment Scams

Be cautious of an investment that:

• Guarantees a profit
• Claims there is no risk
• Requires an immediate decision
• Is available only to a select group
• Uses celebrity images or testimonials as proof
• Requires cryptocurrency
• Prevents you from withdrawing money
• Demands additional fees before releasing supposed earnings

Every legitimate investment involves some degree of risk. Independently research the investment and the person selling it before sending money.

Charity Scams

Before donating:

• Ask for the charity’s complete name and website.
• Research the organization independently.
• Confirm how the donation will be used.
• Avoid pressure to donate immediately.
• Do not use a payment method demanded by an unexpected caller.
• Obtain a receipt.

Scammers often exploit disasters, illnesses, and emotional stories.

Protect Yourself From Fraud

• Use unique passwords for important accounts.
• Turn on multifactor authentication.
• Never share verification codes.
• Review bank and credit-card activity.
• Set transaction alerts.
• Shred sensitive documents.
• Protect your Social Security number.
• Keep devices and apps updated.
• Avoid unexpected links and attachments.
• Check your credit reports.
• Discuss suspicious situations with someone you trust.

If You Sent Money or Information

Act immediately:

1. Stop communicating with the scammer.
2. Contact the bank, card issuer, payment service, wire company, or gift-card company.
3. State clearly that the transaction was fraudulent.
4. Ask whether it can be stopped or reversed.
5. Change exposed passwords.
6. Lock or replace affected cards.
7. Monitor your financial accounts.
8. Save messages, receipts, phone numbers, and transaction records.
9. Report the scam at ReportFraud.ftc.gov.
10. Visit IdentityTheft.gov if personal information was stolen or misused.

Do not pay someone who promises to recover your money for an upfront fee. Recovery offers are sometimes a second scam targeting people who have already lost money.

Quick Scam Check

Before sending money or information, ask:

• Did this person contact me unexpectedly?
• Am I being rushed or frightened?
• Am I being told to keep a secret?
• Is the offer unusually good?
• Is a specific payment method being demanded?
• Am I being asked for a password or verification code?
• Can I verify the story independently?
• Have I discussed it with someone I trust?

If any answer concerns you, stop and investigate before taking action.

Remember

Anyone can be targeted by a convincing scam. Stopping to verify a request is a sign of good judgment—not rudeness or distrust. Legitimate organizations will allow you time to confirm who they are before you send money or personal information.

Helpful Resources: Browse Identity Protection for products, equipment, services, or supplies related to this section.