Avoid Scams and Frauds

Scams and frauds are costing Americans big time. Social media scams alone cost Americans $770 million in 2021. Meanwhile, criminals are trying to access your money and identity through your cellphone, email, and even your front door.

We don’t have the space to write about the latest scams and frauds (they are many), and it’s almost guaranteed that our list would be outdated before we published this post. So what we want to do with this article is to explain how you can help avoid becoming a victim. Please read on for a rundown of what to look for in a scammer, tips to avoid getting taken, and resources for further reading.

Know the Signs of a Fraudster

The Federal Trade Commission has condensed the signs of a potential scammer into four important points:

1. They’ll pretend to be from an organization you know. Some of the common ones are the IRS, Social Security, Microsoft. Apple, or even a charity.

2. They say there’s a problem or a prize. They might say the IRS will arrest you if you don’t send money right now, or you might be told you’ve won a contest (but you need to pay a fee to get the winnings).

3. They’ll apply pressure so you feel an urgency to act RIGHT NOW. If you think the IRS wants to arrest you, you’re going to feel urgency—especially if the person on the line says the police are on the way. You’ll also feel urgency if you think you’ll lose out on the million dollars you supposedly won.

4. They’ll tell you to pay them in a specific manner. It might be sending money through wire transfer, which is as good—or bad—as cash, meaning you can’t get the money back. Or, say, you’re selling something, and they send you a check that’s too large, asking for you to send them back the difference. The check they send will be fraudulent, and you’ll be out whatever you sold plus the cash you gave them!

How to Protect Yourself

The following tips cover a range of ways to protect yourself from scammers, from your phone to your computer.

1. Do your system updates. Companies use ongoing updates to patch glitches that are vulnerable to cyber thieves. Note: If you’re using a public Wi-Fi connection and get a system software update, don’t click OK. If it’s legit, you can wait until you’re on your private Wi-Fi network.

2. Install anti-virus and anti-spyware programs on your computers and cellphones. These programs can help capture and quarantine malicious programs before they do damage or help undo the damage that’s already been done.

3. Make your passwords unique. Use a combination of letters, numbers, and special characters, and don’t use the same password for multiple accounts. Consider a password management program, such as LastPass or Dashlane, to create and store your passwords for you.

4. Don’t use the links in email or text messages. If you’ve supposedly received an email from your bank, manually enter the website URL or give the bank a call using the contact information from their website.

5. Don’t download apps from the internet. Use the Google or Apple app stores to install apps.

6. Avoid free Wi-Fi unless you have a virtual private network (VPN). Free Wi-Fi networks can leave your personal and financial information open to hackers.

7. Turn off Bluetooth if you’re not using it, and don’t make it discoverable when you are. Cybercriminals can use Bluetooth to access your devices.

8. Check your credit reports regularly for fraudulent activity. Each year, you’re entitled to a free credit report from Equifax, Transunion, and Experian. Set a schedule of ordering one of the reports every four months so you can check for suspicious activity year-round. Order your reports from AnnualCreditReport.com. Also, consider a credit freeze.

9. Don’t call an organization using the number on your caller ID without confirming it. Check the number against their official website.

10. Get a second opinion. Talk to your financial advisor, family member, or friend before sending any money.

11. Screen your calls. Don’t answer a call from an unfamiliar number. For example, if you live in Colorado and you get a call from someone in New Jersey, let it go to voicemail. If it’s legitimate, they’ll leave a message.

12. Be wary of anyone who demands certain payment methods. These include prepaid debit cards, gift cards, or money transfers. Don’t accept a check that’s over the agreed amount, and don’t send what was supposedly overpaid back to them.

13. Keep your personal information under wraps. Don’t post sensitive information like your mom’s maiden name or your address on social media.

14. Use secure vaults for sending personal information. Our financial planning firm in Greenwood Village, CO, has secure online vaults for our clients’ sensitive information, and we also accept information in person. Think twice before sending someone a Social Security number, etc., over email. A cyber thief may be able to grab it.

For More Information

The more you’re informed, the better you can protect yourself. Here are some good resources:

This material was prepared by Kaleido Inc. from information derived from sources believed to be accurate. This information should not be construed as investment, tax or legal advice. This commentary reflects the personal opinions, viewpoints and analyses of the Stordahl Capital Management, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Stordahl Capital Management, Inc. or performance returns of any Stordahl Capital Management, Inc. Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Financial PlanningBill Stordahl