How to Spot A Scam And Protect Your Money

Picture it: Your college-age granddaughter calls, distraught, scared, and begging you to wire money because she’s stuck in Mexico. You didn’t even realize she was abroad. You hang up and try to verify with her parents, but they’re at work and not available. Her voice didn’t sound quite right, but she was scared. You wire the funds, only later that day discovering she’s perfectly fine.  

Scams abound these days, all of them designed to steal your money, sometimes over the long haul, sometimes in a single transaction. Here are the latest types of financial fraud to be aware of. 

Imposter Scams

According to the Federal Trade Commission, imposter scams rank #1 in the grand scheme of scams. In 2023, imposter scams scooped up $2.7 billion from consumers. These scammers pretend to be a business, government entity, or friend in need. 

The biggest one happening right now is an Amazon scam, says Kathy Stokes, director of fraud prevention programs at AARP. You receive a message alerting you to a large, possibly fraudulent purchase on your account. “Nine out of 10 of us will think someone hacked our account and call back,” Stokes says. It can result in different outcomes, including the scammer stealing your user name and password after you log into your account for them, malicious software loaded onto your computer, or “tech support” provided via remote access to your computer. 

Lottery or Sweepstakes

These are less common than imposter scams but still rank high (#3). You receive a notification that you’ve won $1 million from a publisher’s clearing house (or other source), and you simply need to cover the cost of taxes and processing and then they’ll send you the money. You send a check for $10,000. 

“The biggest red flag there is that anytime anyone asks you to pay something up front to win, it’s a scam,” Stokes says. It’s illegal to require any kind of payment upfront on sweepstakes or lottery winnings. 

Romance Scams

These have been around a long time, Stokes says, but they have evolved and are on the rise. In 2023 alone, there were more than 64,000 reported cases, with losses of more than $1.1 billion, according to The Federal Trade Commission. 

Scammers find you on dating apps, social media platforms, and online games. They request to friend you, strike up a conversation, and make you feel like they care about you — even if you’re not looking for romance. 

The red flags: The person chatting you up supposedly lives or works abroad or serves in the military abroad. They suggest connecting on a private platform. They profess love quickly. They start asking for money to cover things like a plane ticket or an emergency surgery. 

“We know of victims who have lost their entire life’s savings,” Stokes says. “The scammers are so good at what they do, and commonly, it’s older adults who become victims of it.” 

Think twice about accepting a friend request from someone you don’t know, she says. Also, if the photo of the person seems suspicious to you, do a reverse image search if it’s associated with another person. It could be a photo from a real estate ad. (The safest way to do this is via Google; just upload the image into search via a desktop computer.) 

Can You Do Me a Favor?

Another form of imposter scam, these scammers pose as someone you know, such as your boss or church leader. They text requesting you purchase some gift cards they didn’t have time to pick up — maybe for a work event or welcoming a new family. They say they’ll reimburse you, but they need you to send photos of the front and back of the cards. Of course, you want to help. 

The outcome: The scammer drains the money off the card through those photos, and the money you paid is gone. 

“It’s so hard to engage our inner skeptic all the time, but we have to,” Stokes says. In this situation, verify the request by calling your boss or your faith leader to confirm the text was sent.  

IRS Scams 

While scams from phony IRS agents claiming you owe back taxes have been around for decades, scammers are now throwing in new twists to dupe their victims, and frequently take advantage of natural disasters and the elderly. In 2023, taxpayers lost $4.26 million to IRS imposter scams.

Julianne Ohlander, senior data analyst at BeenVerified, says it’s an unfortunate trend. “People want to make sure they do everything correctly on their taxes and might be misinformed about some aspects, so it’s an easy topic to use to trick people,” she explains. “Every year people give out their sensitive information to get their taxes done and the threat of being in trouble with the IRS can be daunting.”

Fake Employment Offers

Thousands of employees, particularly those in the tech sector, have been laid off in 2024. As more people look for work, it’s important to watch out for fake job listings. They might approach you via text message, or via social media. They will often ask you to provide your personal information right out of the gate, but a real job with a real company will always involve several rounds of interviews with actual humans (who you can see on Zoom or in person) before anyone asks for your Social Security Number. (And when they do ask, it will likely be via an official and secure application portal, not a DM.) If you’re intrigued by a job listing, first Google the company, then look them up on Glassdoor before you apply. You probably already guessed the tax risk here — all your personal information that you’d give someone when applying for a job can be used to file a fraudulent income tax return or steal your identity. 

How to Avoid Scams

Even though scammers are out in force in 2024, there are ways we can avoid being taken advantage of. AARP’s Stokes offers her best tips for staying safe. 

1) Don’t click on links you receive in a text or email.

When you get phishing emails or texts, take a look at the originating email address—it’s always fake. To double check possible suspicious account activity, log in through the website, such as Amazon or your credit card issuer, to verify if it occurred. Or call the local branch of your UPS office to find out if you really do have a package waiting. 

2) Don’t pick up the phone.

Let your voicemail do the work, Stokes says. Answering the phone indicates to the caller your number is active, a “hot number.” The more often you pick up or engage, the more calls you receive.  

3) Create a refusal script.

Write down a standard response to post next to your phone. “That could be as simple as ‘I don’t do business on the phone,’” Stokes says. Even if you don’t pick up as a habit, your parents or grandparents might do so out of reflex. Help them create a refusal script as well. 

4) Shut down communication.

If you think you’re the target of a romance scam, stop all communication, don’t send money, and check in with someone you trust to see if they think it’s suspicious. 

5) Discuss scams with friends and family.

Anyone can be a victim, but older people are particular targets and financially vulnerable. They may not be up on the latest techniques. Talk about scams you’ve encountered to help everyone be on the alert.