Protecting Yourself from Scams
Finance isn't just about making money and saving it. It's also about protecting it.
We've all heard horror stories about people who were scammed out of anywhere from hundreds to millions of dollars. The scariest part of those stories? They can happen to anyone. The smartest and most experienced businesspeople have fallen for them.
As technology grows more sophisticated, more and more scams are created, and it's impossible to be aware of every type of scam out there. The way to protect yourself is to learn the principles that scammers rely upon.
All scams have one element in common: They make use of the art of deceit.
Learning just how people are fooled can assist us in recognizing the methods used in a scam.
HOW CREDIBLE ARE YOU?
The first thing a potential scammer will do is attempt to gain your trust. They may pretend to be a charity, a government organization, your bank, or a family member. They may know personal information, send you an official-looking email, or even sound like a family member. There are many ways they can achieve this, especially with today's technology: The scammer may be sending an email from a familiar-looking email address, have the right caller ID, or use Al voices.
None of these things guarantee that they are legitimate. They may have gotten your information online, guessed it (you bought a car in 2018-lots of people did, and if they're wrong, they'll just try again, on someone else) or even bought it off other scammers
In written communication, be on the lookout for bad grammar or strange logos. Look carefully at the email addresses if you're suspicious-it may look very similar to the right one but won't be exact.
Emotional Manipulation
Thinking logically can help you from falling prey to scams. Scammers are experts at using emotional manipulation to get you to a position where you stop using reason or even common sense and end up doing what they want you to do.
Fear and intimidation are common and effective. They threaten legal action if you don't immediately send over the money or tell you they shut down your account or send the bill to debt collection. This immediately motivates you to send off the money without checking the facts. One famous scheme involved scammers pretending that a relative was kidnapped the victims rushed to send the money to save their relative.
Pressure and stress also play a role. They'll tell you that unless the money is sent in a few minutes, you'll either lose out or receive a consequence. They often create a crisis and insiist that your computer is hacked or your power will be shut down, and unless you do XYZ in the next few minutes, there will be big trouble. The urgency prevents you from thinking logically, and you revert to your instincts, which are full of biases.
Sometimes, they use the opposite tactic, that of excitement and hope. The common thread with these scams is that they're too good to be true. They promise all sorts of freebies or guarantees such as debt relief. They take advantage of people in difficult circumstances by giving them unrealistic hopes. The news is so good that the people being scammed cling to it without being logical.
They also make use of authority bias-our tendency to listen to authority and often pretend to be from the government.
If you notice any of these manipulation tactics being used, it's probably a scam. Real companies won't do that to you.
Finally, if the person you're talking to asks you to Zelle them, send them cryptocurrency, or pay by gift card, your antenna should go up. Unprofessional payment methods are a red flag. Any personal contact you get (by email or phone) asking for money or personal information is probably a scam.
You Have Nothing to Lose
If you're on a phone call and are wondering if someone is trying to scam you, you have nothing to lose by hanging up and going to the company website, or call customer service and see if it's true. If you get an email from a family member claiming to be in desperate straits, call them.
I once got an offer from a company to sell ad space on my cars for thousands of dollars a month. I realized it was too good to be true and Googled it. Immediately, I saw hits describing that exact scam.
Don't be overconfident and assume that you're too smart to be scammed. Always check before sending your money.
What to Do If You're Scammed
If scammed, immediately stop interacting with the scammer. Then, contact the local police department or go to the Federal Trade Commission (FTC) government website to learn what steps to take next. These may include contacting your bank and disputing charges, removing computer viruses, changing passwords, and setting up fraud alerts or a credit freeze. Even if you sent a non-reversible payment, it can't hurt to ask the company you used to send the money (whether cryptocurrency or a payment like Zelle) if there's any way you can get the money back. And make sure to learn how to protect yourself in the future, whether in relation to this scam or to an unrelated scam.
