7 Red Flags That Will Help You Avoid Financial Scammers
Written by
Cynthia Measom
Edited by
Sean Fisher
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You can’t be too protective of your money and personal information. Financial scams are running rampant.
According to our recent “Keep Your Money Safe” survey, when victims of financial scams were asked what type of scam they had experienced, 27% said they had been the victim of phone scams (robocalls, texts, false impersonators, bots).
Additionally, 11% said they were victims of money transfer or mobile payment service scams — 20% on Cash App and 17% on PayPal. Online shopping and phishing scams were also common, with 25% of respondents claiming to have been scammed on Facebook and 13% on Instagram.
Here are the red flags you should look for to help you avoid financial scammers.
Unknown Sender
Approximately 34% of respondents to the GOBankingRates survey said that receiving communication from an unknown sender is what tips them off most regarding a potential scam.
Todd Redding, founder of Probity Investigations, said that scammers often initiate contact through unexpected emails, phone calls or messages.
“These unsolicited communications frequently request personal information or prompt urgent actions,” he said. “It is crucial to be cautious when receiving such contact, especially if it comes from unknown sources. Always verify the authenticity of the sender or caller before providing any personal details.”
Misspelled Words or Bad Grammar
Receiving communication that is written poorly or contains bad grammar is another red flag that 14% of respondents said tips them off to a scam.
Ryan McEachron, a security and risk management expert and CEO of ISU Insurance Service ARMAC Agency, said that unprofessional communication with typos, grammar issues or an inconsistent story indicates a scam.
“Legitimate companies have skilled communicators and consistent, transparent messaging,” he explained. “If something seems too good to be true, it probably is. Trust your instincts — if an offer makes you feel uncertain or uncomfortable, pass on it.”
Strange Email Address or Phone Number
Approximately 12% of survey respondents cited a strange email address or phone number as a tip that something is amiss.
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Mark Shyani, lawyer and managing attorney at Pacific Attorney Group, said that he’s seen many red flags, but one that stands out to him is the “referral from trusted source” scam.
“In this scam, criminals pretend to be someone you know — often an esteemed colleague or long-time client — who wants to send a client or opportunity your way,” he said. “They do this because they understand that people are more likely to take notice of referrals made by people they trust.”
Shyani continued, “Once, when I was running my practice, I got an email, apparently from a prominent lawyer who was referring a big case to me. It looked legitimate; everything about it mirrored this attorney’s typical messages, right down to the sign-off. However, certain things seemed slightly off: The email address had been changed subtly, and the sender requested an upfront ‘referral fee,’ which struck me as strange.”
He concluded, “This scam’s ability to exploit preexisting trust and professional relationships makes it so dangerous. To avoid being duped by it yourself, make sure you cross-check every referral with your trusted source directly using other means of communication (like calling them on the phone) before taking action.”
Requests for Specific Information or Specific Amounts of Money
Around 9% of survey respondents said that if someone requested specific information or specific amounts of money, they would suspect a scam.
Alex Freeburg, managing attorney and founder of Freeburg Law, said that many retirees are falling victim to government impersonation scams where the scammers pretend to be the IRS or Social Security. “They’ll say you owe back taxes or there’s a problem with your benefits, and you need to pay them money right away or give them your personal information,” he explained.
Freeburg said that what you need to remember is that the IRS and Social Security will never call you out of the blue demanding immediate payment or personal details. “If you get one of these calls, just hang up,” Freeburg recommended. “Then, look up the real number for the agency and call them back to check if there’s a problem.”
Mentions of Packages or Purchases You Don’t Recognize
In our survey, 8% respondents said that receiving communication about unknown packages or purchases is another red flag.
Scammers often use package delivery scams to trick victims into sharing personal and financial information. These scams start with a text message or email claiming there’s an issue with a package or that one is on the way. The message includes a link to update your delivery or payment preferences and appears to be from a legitimate carrier, such as UPS, FedEx or USPS. If you click the link, however, you could unknowingly download malware or be asked to provide sensitive information.
Scammers may also use a tactic called the “fake order” scam to trick you into handing over sensitive information. You might receive an email or text that looks like an order confirmation for a purchase you never made. The message will claim that your credit card will be charged or money will be withdrawn from your bank account. It then will offer you a way to cancel the order, either by clicking a link or calling a number.
When you try to cancel, the scammer will ask for personal details, claiming they need the information to verify your identity. The scammer may also request your name, address, phone number, credit card number or banking information.
If you’re unsure if you’ve ordered a package or made a purchase, search for the legitimate contact information for the company the message claims to be from and call or email them directly to confirm. Never give up your personal information through an electronic link or phone call unless you have confirmed it’s a legitimate source.
Sense of Urgency
About 5% of respondents said that another scam tip-off is someone urging you to do something related to money.
Freeburg said they want to create a scenario where you feel like the clock is ticking, and if you don’t respond right away, something terrible will happen.
“Scammers know that if they can get you to feel rushed or panicked, you’re more likely to make hasty decisions without fully thinking them through,” he explained. The most common red flag here is if they say something like, ‘I’ll wait online until you make this payment,’ or ‘You need to click this link right now, or your account will be locked.'”
Freeburg said that it’s a psychological game. “They’re basically trying to cut off your ability to think critically and evaluate the situation,” he said. “The longer they keep you on the line, the more they can manipulate your emotions and push you toward a quick decision.”
He continued, “Just remember this is a tactic designed to cloud your judgment. If the person on the other line can’t respect that you need to call them back after analyzing all the information and making a decision of your own accord, you need to hang up, fast.”
Unfamiliar Links
About 5% of survey respondents said that they consider being presented with unfamiliar links as a tip-off to a scam.
Jacob Kalvo, cybersecurity expert, co-founder and CEO at Live Proxies, said to be wary if you’re asked for confidential information or money in some unusual way, such as unfamiliar links or emails.
“Legitimate companies rarely, if ever, ask for this info via unsecured or unusual channels,” he said. “Scammers may further impersonate well-known companies or government agencies by using official-sounding language and logos that make them appear somewhat legitimate. If you are still in doubt, verify the communication with a call to the organization directly through known, official channels.”
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