Broker Check

Alert: Financial Scams and How to Avoid Them

February 16, 2024

Don’t dismiss this newsletter. This is real. It is happening to clients. It is happening to your neighbors, your family. It may have happened to you. 

I hope this newsletter gives you things to think about and to be aware of in light of this new wave of scamming. Scammers have been around for years, but with Artificial Intelligence (AI) and enhanced technology, it is more prevalent than ever.

This message is not intended to scare you, but it is a way for us to educate you and share with you some tips on how to identify and protect yourself from potential financial scams.  These events can be prevented.

Let me start by saying this.  If it has happened to you, do not blame yourself. Don’t be embarrassed. The scammers are the bad guys. They have an extensive playbook on how to tackle victims, and they are very convincing and believable.  

This message is to identify the different scams that are out there, what to watch for, how to respond, and how to report the situation. 

Some basics to cover before we get into the various scams circulating out there.

  • If you are contacted by someone you don’t know, don’t immediately answer. But if you must, always pause before responding, whether it is by text, voicemail, etc.

  • If you feel the need to, offer to call them back to confirm the call, text or voicemail is legitimate.

  • Always listen to your gut. We all have internal intuition. When something does not feel quite right, go with your instincts and do some investigating, ask some questions.

  • Don’t share ANY private information on social media, regardless of the platform.

  • There are resources to help you in situations where your finances or identity have been compromised. You are not alone. I will list some resources at the end of this article.

  • Always resist and investigate ‘URGENT’ pleas for cash or being given unrealistic turnaround times to respond to the request.

  • These scammers tend to target the unexperienced individuals or the elderly.

 Here are some of the most popular financial scams circulating right now:

Gift Card Scam

The concept behind this scam is for scammers to steal gift cards from stores, place a fake security sticker over the real ones, reseal the package and replace them back in stores.

Example: I buy a $100 Visa gift card as a wedding gift, but when the newlywed couple go to use it, it has a zero balance. Gift card scams have been around for a while, but it is becoming more prevalent.

Look to see if the package has been tampered with or if there is a sticker over the scratch-off material. Also look to purchase gift cards that are behind the counter and always keep the receipt. 

Grandchild/Grandparent Scam

Beware of calls from people claiming to be a grandchild or relative asking for financial assistance, asking you to wire money or to provide a credit card number to get them out of a sticky situation.

As appropriate, end the conversation and independently contact the person who allegedly made the call for help or contact a family member who could confirm the caller’s story. Try contacting the real grandchild at a number you know is accurate.

These calls often happen late at night to cause confusion for the person being called.

You can also ask questions of the caller, the answers to which only the real grandchild would know.

Be attentive to whether the caller is answering in detail or just guessing the answers.

Debt Collection Scams

Sometimes scammers will pose as collectors who are trying to get you to pay for debts you don’t owe or that you have already paid. Do not offer any personal information until you can verify the debt collection agency is legitimate. Warning signs include callers who use threatening language to coerce you to pay.

To verify legitimacy of the call, consider contacting the original creditor versus talking to the supposed debt collection agency.

Debt collectors cannot contact you outside of the following time frame:

8:00 AM – 9:00 PM in your local time zone.

Romance or Sweetheart Scams

Yes, this is real. Social media plays a big part in this scam.

Picture two individuals meeting online, spending a lot of time getting to know each other and they fall in love, when in reality, one really only wants access to the other person’s money.

Scammers take time getting to know you and developing trust before asking for a loan or for access to your finances. Be smart about who you are connecting with and what information you share.

Online shopping scams

This concept peaked in 2020 during the pandemic and has become very popular.

Here is how it works.

You order something from an ad you saw on-line or on some social media platform, you paid for it, then received something completely different from what you ordered - or worse, you never received anything. 

Unfortunately, this happened to us this past Christmas – twice. So this is real. Some things to consider and think about:

  • Before you order, search reviews or complaints for the company you are ordering from.

  • Keep your confirmation emails and receipts. Not receiving a confirmation email should be a red flag.

  • You have 60 days to dispute a charge to your bank account for an item you never received. If you suspect you have entered into an invalid exchange, you can call your bank or credit card company and cancel payment.

  • Using a credit card for online purchases offers more of a paper trail than a debit card.

  • Beware of “Free Trial Offers”. Often companies will offer a free trial for one month but require you to provide personal financial information. If you don’t opt out of the trial, the company will continue to send you the product and in turn, continue to charge your credit/debit card until you tell them to stop.

Tax Scams

This can come in the form of someone impersonating an IRS agent informing you that you owe back taxes or that you did not file your taxes correctly. They threaten you with legal action - even arrest.

The scammer will threaten or harass you as the taxpayer by telling you that you must pay a fictitious tax penalty. The scammer instructs you to buy gift cards from various stores. Once you buy the gift cards, the scammer will ask you to provide the gift card number and PIN.

Please note:  The IRS will not call you - nor would they demand you pay TODAY.

Thanks for reading and as always, please consult with your financial institutions and your advisor should you feel you have been a victim of fraud or a financial scam.


Additional resources:

  • - The Internet Crime Complaint Center
  • In any situation, best practice is contact your financial institution and credit card company to notify them of any suspicious activity. No harm in a phone call.
  • Contact the Federal Trade Commission (FTC) at 1-877-FTC-HELP (1-877-382-4357)
  • Your states attorney general’s office
  • Alert your local law enforcement