10 Common Financial Scams and How to Avoid Them

Review some common financial scams to help you be smarter and more cautious with your information.

Man sits with his son while using a laptop.

By Steve Reeder, Loss Prevention Manager

You’ve worked hard to earn a living, build your savings and pursue your financial goals. That’s why it’s important to keep up to date on ways to protect what you’ve achieved and take smart steps to avoid the growing number of financial scams out there. We’re here to help.

Here are some common scams along with tips to help you outsmart fraudsters, so you can keep your finances safe, secure and on track.

Fake Check/Overpayment

Here’s a common scenario: someone sends you a check and asks you to send money back to them. Sometimes, they message you in Instagram about using your photo or modeling, “accidentally” send you a check for too much and ask you to send back the extra money. In some cases, you’ve allegedly “won” a prize, but you’re told to send money covering taxes and fees. Or you’re paid as a secret shopper and are asked to wire back money or buy and send gift cards to cover the extra amount. In each of these cases, it’s a scam.

What to do: For starters, don’t send money back to someone who sent you a check. Also, don’t accept checks for more than your selling price. If you’re selling online, consider using a secure online payment service. Do some online sleuthing to independently verify who you’re dealing with. And always listen to your intuition if something feels off.

Cryptocurrency Scams

As cryptocurrency becomes more popular, so do the scams involving it. A common scam, known as “pig butchering,” happens when someone “accidentally” texts or messages you, claiming to have the wrong number, then tries to develop a relationship with you and build trust. Once they’ve earned your trust, they encourage you to invest in a “guaranteed returns” crypto fund and tell you to download a particular app. They’ll often perform crypto trades with you at first. Unfortunately, the app is run by scammers and will allow them to take your money before you realize you’ve been scammed.

What to do: Never respond to unsolicited texts or messages in social media. Block and/or report the sender. Always do research before investing in anything new, confirm the legitimacy of investing apps and URLs (check for misspellings, security features like https or a lock icon, etc.) and be cautious of “get-rich-quick” claims.

Mortgage Closing Fraud

Mortgage scam artists target homebuyers who are about to close on their home purchase. Using emails or text messages to pose as an actual real estate agent, mortgage loan officer or settlement agent, the fraudster will attempt to steal the homebuyer’s down payment or closing costs.

What to do: Rather than responding directly to the email or text, independently contact the individual to discuss and verify the message. Make sure you discuss the closing process and money transfer procedures with your real estate agent or settlement agent in advance, so you know what to expect.

Debt Collection Scams

Sometimes fraudsters pose as collectors who are trying to get you to pay for debts you don’t owe, or that you’ve already paid.

What to do: Don’t provide your personal information until you can verify the debt and confirm that the collection agency is legitimate by doing some online research. Ask the caller for their name, company, street address, and professional debt collector license number, if available, then follow up with the debt collection agency to confirm the legitimacy of the debt collector. Red flags include callers who won’t provide written proof of the debt you allegedly owe or use threatening language to coerce you into paying.


Phishing experts use emails or texts that look just like they’re from banks, popular merchants or someone you may know, and they try to get you to share bank account or credit card numbers, login credentials, or personal information, such as your Social Security number.

What to do: Be cautious about clicking on links or opening attachments in unsolicited communications. Do an online search to verify the website or phone number yourself, and independently contact the entity to confirm the validity of the email or text you received.


As its name suggests, ransomware is a kind of software that actually holds your computer, smartphone or tablet hostage by restricting access until you pay a ransom. Ransomware spreads to your devices when you click on an infected email attachment or a link that leads to a contaminated file or website. Ransomware also can affect a network of computers in the workplace or be passed around on a contaminated thumb drive.

What to do: Avoid clicking on attachments and links in unsolicited emails or texts. Run antivirus software to search for and remove malicious software on your computer and avoid using thumb drives from others.

Imposter Fraud

Imposters may try to convince you to send money by pretending to represent trustworthy, well-known and authoritative entities, like the county sheriff, the IRS or charities.

What to do: Avoid acting immediately. Instead, call the organization or government agency to get the real story, and decide whether you should proceed. Keep in mind that government officials and agencies would never call you about official business or ask you to wire money or purchase gift cards.

Grandchildren and Elder Fraud

Beware of calls from people attempting to sound like a grandchild or relative asking you to wire money or provide credit card numbers to help them get out of trouble.

What to do: Independently contact the person who allegedly made the call for help, in order to verify the details. Keep in mind that these calls often occur late at night to confuse the person being called. Do your best to resist being pressured to act immediately in response to urgent pleas for cash.

Sweetheart Scams

Sweetheart scammers pretend to fall in love with people in order to win their trust and steal their money. These types of scams may unfold over the course of a year or more. They are often initiated on dating websites and apps, or via social media, and usually target people whose spouse recently died. Airline tickets, school tuition, medical costs or temporary financial setbacks are among the reasons why they request money.

What to do: Don’t wire money to people you don’t know, even if they’ve professed their love to you. Be reasonably cautious about emails from people claiming to know you. Avoid responding to emails, texts and phone calls if you suspect someone to be a sweetheart scammer.

Employment Scams

Con artists pose online or in classified advertisements as employers or recruiters offering nice employment opportunities, including working from home. But once you get the job, you’re asked to deposit an official-looking paycheck in your account and wire a portion of the money to someone else for business purposes.

What to do: If the job is for a well-known company or organization, double-check its website to confirm the job is posted there. Also, consider researching the company on trustworthy public websites to make sure it’s legitimate. Avoid on-the-spot job offers, especially when they don’t involve interviews. It’s always wise to get the details and contract in writing first before taking next steps.

By educating yourself about common financial scams and proactively taking steps to avoid them, you’ll have confidence knowing you’re in a stronger position to protect your financial future.

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