Financial Scams & Fraud: Protecting Your Money

Why Scam Awareness Matters

The numbers are staggering:

• $10+ billion lost to fraud annually in the US
• Only 5-10% of fraud is reported
• Recovery rates are extremely low
• Anyone can be a target

The Psychology of Scams

Scammers exploit universal human traits:

No one is immune. Education, intelligence, and age don't protect you. Awareness and skepticism do.

Common Scam Types

Impersonation Scams

Government impersonation:

• IRS threatening arrest for unpaid taxes
• Social Security claiming benefits suspension
• Medicare offering fake benefits

Tech support scams:

• Pop-ups claiming virus infection
• Calls from "Microsoft" or "Apple"
• Fake antivirus warnings
• Remote access requests

Bank/financial impersonation:

• Fake fraud alerts asking for verification
• "Your account has been compromised"
• Requests to "verify" account details
• Links to fake banking websites

Investment Scams

Ponzi schemes:

• Consistent high returns regardless of market
• Vague investment strategy
• Difficulty withdrawing funds
• Recruitment of new investors emphasized

Pump and dump:

• Unsolicited stock tips
• "Hot tip" from insider
• Pressure to act immediately
• Stock collapses after buying

Crypto scams:

• Guaranteed returns on crypto
• Celebrity endorsement (often fake)
• New coins with incredible potential
• Romance leading to "investment opportunity"

Romance Scams

How they work:

1. Connect on dating site or social media
2. Build emotional relationship over weeks/months
3. Create crisis requiring money
4. Victim sends money willingly
5. Crisis repeats or relationship ends

Warning signs:

• Refuses video calls
• Never meets in person
• Too good to be true profile
• Quick intense emotional connection
• Financial requests of any kind

Average loss: $10,000+ per victim

Phishing and Smishing

Phishing (email):

• Looks like legitimate company
• Creates urgency (account problem)
• Links to fake website
• Captures login credentials

Smishing (text/SMS):

• "Your package couldn't be delivered"
• "Suspicious account activity"
• Links to malicious sites
• Often impersonates banks or shippers

Vishing (voice/phone):

• Caller ID can be spoofed
• Sounds like legitimate organization
• Creates urgency to act
• Requests personal information or payment

Employment Scams

Fake job offers:

• Job seems too good to be true
• Interview via text only
• Asked to pay for training/equipment
• Sent check to deposit and return portion
• Asked for bank info for "direct deposit setup"

Lottery and Prize Scams

"You've won!":

• You never entered
• Must pay fees to collect
• Must provide bank info for deposit
• Too good to be true amounts

Rule: You can't win a lottery you didn't enter.

Red Flags Checklist

First-Gen Specific Vulnerabilities

As a first-generation wealth builder, watch for:

Targeting based on unfamiliarity:

• Complex financial products that seem legitimate
• "Investment opportunities" targeting new investors
• Fake financial advisors
• Schemes targeting immigrant communities

Family-based scams:

• Grandparent scams (fake emergency with grandchild)
• Family member impersonation
• Pressure to help family "back home"

Cultural trust exploitation:

• Affinity fraud (targeting your community)
• Church or religious group schemes
• Cultural organization scams

Protection Strategies

Slow Down

The #1 protection: Refuse urgency.

Scammers create time pressure because thinking defeats scams.

Practice saying:

• "Let me call you back at the official number"
• "I need to think about this and discuss with someone"
• "I don't make financial decisions on phone calls"
• "Send me something in writing"

Verify Independently

Never use contact info from the suspicious message:

• Look up the company's official number
• Go to the official website by typing it yourself
• Call your bank using the number on your card
• Call family members at numbers you know

Protect Your Information

Never provide on unsolicited contact:

• Social Security number
• Bank account numbers
• Credit card numbers
• Login credentials
• One-time passwords or verification codes

Set Up Alerts

Create a Verification Rule

Family agreement: "We never send money based on phone call, text, or email alone. We always verify through a second channel."

If You're Targeted

During the Attempt

If you suspect a scam in progress:

1. Stop communicating
2. Don't send any money
3. Don't provide any information
4. Hang up / close the message
5. Verify through official channels

After Sending Money

Act quickly—time matters:

If you paid by credit card:

• Call your credit card company immediately
• Dispute the charge
• Request new card number

If you paid by debit card:

• Call your bank immediately
• Dispute the charge
• Consider closing the account

If you wired money:

• Call your bank immediately
• Request wire recall (may not succeed)
• File police report

If you paid with gift cards:

• Contact gift card issuer immediately
• Keep the cards and receipts
• Report to FTC

If you gave access to computer:

• Disconnect from internet
• Run virus scan
• Change passwords from different device
• Contact your bank
• Consider professional IT help

Report It

Even if you can't recover money, reporting helps others:

• FTC: reportfraud.ftc.gov
• FBI IC3: ic3.gov (for internet crimes)
• Local police: For documentation
• State attorney general: Consumer protection

The Shame Factor

Talk to someone. Whether you report or not, don't carry shame alone. You were victimized by criminals.

Protecting Vulnerable Family Members

Higher-risk groups:

• Elderly parents
• Recent immigrants
• Those unfamiliar with technology
• Those experiencing loneliness
• Those with cognitive decline

How to help:

• Have the conversation about scams
• Share examples without judgment
• Create verification agreements
• Help set up fraud alerts
• Be available to verify suspicious contacts
• Check in regularly

Red flags in loved ones:

• Unusual secrecy about finances
• New "friends" you haven't met
• Unexplained money transfers
• Defensive about phone calls
• Buying gift cards in unusual amounts

The Bottom Line

Scammers exploit universal human emotions—trust, fear, greed, loneliness, and helpfulness. No one is too smart to be scammed. The best protection is awareness, skepticism, and a commitment to never making financial decisions under pressure. Slow down, verify independently, and never provide sensitive information on unsolicited contact. If you're targeted, act quickly and report it. There's no shame in being targeted—criminals are good at what they do. The only shame is in letting shame prevent you from getting help or protecting others.