Discover the sneaky ways scammers work

Discover the sneaky ways scammers work

With the advent of artificial intelligence, scammers have more creative ways than ever to trick people into giving them money fraudulently. With data indicating a growing number of scams of all shapes and sizes, Americans are losing billions of dollars at alarming rates year after year.

Most people are now familiar with robocalls, emails and text messages, however with artificial intelligence entering the picture there are specific scams to watch out for in 2024.

Well, they seem legit

The most popular is the lookalike or impostor scam. These are typically individuals who pretend to belong to an organization such as the IRS, Social Security, or a health insurance company. With the help of technology, it may even appear on your phone screen as the particular organization they are pretending to be a part of.

They will start by building trust and informing you of a routine issue, but they will quickly start to create urgency to let you know that if you don’t do what they say, you will lose any benefit this organization can offer. The most important thing to note in these situations is that the IRS will not call you. They most commonly reach taxpayers by mail via USPS, not UPS or FedEx.

In these scenarios, we encourage people to ask for a return phone number or to simply hang up. Usually, if it’s a scam, they don’t provide a phone number to answer and hang up first.

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You won!

The second scam that is increasing in number is the lottery scam. These typically come as phone calls informing an individual that they have won something like a Publishers Clearing House award, even if they never entered. The call starts with the announcement of the win and when they guess the news, the scammer lets them know that they signed up so long ago that they probably don’t remember.

To receive their winnings, however, they have to pay a sum that covers taxes or processing fees, and then they ask you not to tell anyone so they can surprise your friends and loved ones. This can be tricky, as it mostly happens to older people.

The most important thing you can do to prevent this from happening is to stay vigilant, pay attention to warning signs such as creating urgency and asking to keep news secret.

“Grandpa, I’m in trouble”

Increasingly popular with the advent of artificial intelligence is the “grandparent scam”. A bad actor will use artificial intelligence technology to imitate the voice of a loved one. Usually, it involves a person calling a grandparent and making him worry about a grandchild, offering him a terrible scenario that he would need money to get out of.

One tip we have provided to our clients is to have a verbal family “password.” In this scenario, you would ask the scam artist to give you the password, and when they inevitably don’t know it, you would know that this person is not your loved one and hang up.

Hackers love social media

Social media continues to be a fertile ground for hackers. From social media websites to dating sites, there are several ways people have reported being scammed. Most of the dollars lost are due to fake shopping websites, investment scams through the social media channel, and romance scams.

It is advisable to always make sure to check the website you have visited outside of the social media app. This is one way to determine if a website is legitimate and if there are any reports of a scam through a quick Google search. Social media can be useful for many things, but investing is not one of them. We urge anyone to avoid any monetary investment transactions through a social media platform and to consult their financial advisor if they have any concerns.

While there are many good people in the world, it is always smart to stay attuned to how people fall victim to scams. There are common “red flags” where we always invite our clients to guess something.

  1. Win a contest you didn’t enter
  2. You are told there is a problem with your account (taxes, social security)
  3. You are asked to act immediately and are forced to do so
  4. You don’t have to tell anyone
  5. You are given strangely specific payment information

The second most important thing to note is that if this has happened to you, or if you are the victim of a scam, there are things you can do to protect yourself anyway.

  1. Know that you are not alone; this is happening at alarming rates for people all over the world
  2. Contact your bank or credit card company if you have offered financial information
  3. Notify the police
  4. Notify your family and/or friends
  5. Alert the credit agencies

This has become an unfortunate reality in a time where technology is at our fingertips every day. The best way to prevent this from happening to you or a loved one is to stay vigilant, educate your family and friends about scams and ways to prevent them, and always practice safe technology activities.

We at CapWealth do not take lightly the trust our clients have instilled in us. We are always working to keep our clients informed on topics that could affect the nest egg they have built and the well-being of their families for generations to come.

Hillary Stalker, CFP, is an executive vice president and financial advisor at CapWealth. For more information, visit capwealthgroup.com.

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