We have all heard the warnings on the local news, from our banks and even at grocery stores: Beware of scams.
But what exactly is a scam?
Simply put, a scam is a fraudulent scheme that uses manipulation and deception to trick someone into providing money or personal information. There are many types of scams, but most share some of the same characteristics.
Deception
Is it too good to be true? It probably is.
Just like a good book, scammers need a “hook” to get your attention. A scammer will often present false or misleading information designed to be too tempting to pass up.
Investment scams are a common example. Have you ever seen a pop-up advertisement on your computer promising a high rate of return for a small investment in cryptocurrency or precious metals?
The scammer may pose as an investment firm, hoping you will click a link and send money. Unfortunately, the only investment you may be making is in the scammer.
Manipulation
Scammers use manipulation to persuade victims to do what they want — usually to send money. They may exploit trust, fear and emotions to accomplish their goal.
Romance scams can last for months or even years, with scammers continually playing on a victim’s emotions to keep the money coming. A romance scammer may patiently build a relationship and establish trust for months before asking for money.
The scammer also may have countless excuses for why the two cannot meet in person. There may be an emergency, an accident, a work problem or another unexpected situation. Often, that emergency will supposedly require the victim’s money to resolve it.
Never send money to someone you have not met in person.
Sense of urgency
Scammers often create a sense of urgency to make victims feel pressured and prevent them from having time to think. This is intentional.
Oil rig and military impersonation scams frequently use this tactic. A scammer might claim there has been an explosion on an oil rig or that troops have run out of food and need immediate assistance.
A sense of urgency is also common in investment scams. Victims may be told that an opportunity to earn an advertised return will expire quickly and that they must invest immediately.
If you feel pressured or rushed to send money to someone you have never met, stop and think. Use resources independent of those provided by the person contacting you to verify the information.
When in doubt, ask someone you trust whether the situation makes sense. Creating that pause when you feel pressured can give you the time needed to think clearly and make a better-informed decision.
Secrecy
Scammers generally do not want anyone else to know you are communicating with them. They may explicitly ask victims to keep everything secret and sometimes even claim that other people in the victim’s life are involved in the supposed situation.
If a scammer asks you to wire money from your bank, the scammer may tell you not to disclose the real reason for the transaction to bank employees. The scammer may even provide a false explanation for you to give them.
When scammers request payment through gift cards, they may tell victims not to discuss the reason for the purchases with cashiers or other store employees.
A request for secrecy should be a warning sign.
There are also steps you can take to help protect yourself. Developing a relationship with your bank is a good place to start. Bank employees can ask questions about suspicious transactions and may be able to identify signs of a potential scam.
Online and mobile banking also make it easier to monitor account activity. Many financial institutions allow customers to customize alerts that notify them of transactions they may not have authorized on their accounts or debit cards.
Ask your bank about these features and other safeguards it offers to help protect you from scams.
Most importantly, remember the warning signs: deception, manipulation, urgency and secrecy. If something does not feel right, stop before sending money or providing personal information. Take time to verify the situation independently and talk with someone you trust.
That pause could prevent a costly mistake.
About the author
Danielle Weber has more than a decade of experience in banking fraud prevention and recovery, including work in deposit operations and compliance. Over the past three years, she has helped recover more than $500,000 in fraudulent funds for customers and financial institutions. She specializes in payment systems, return rights and interbank collaboration, with a focus on fraud recovery and protecting customers from financial loss.
