How to Spot a Money Scam

You may have learned to spot a scam that’s phishing for your personal identifying information, like your social security number or birthdate, but some scams are just out to take your money right then and there. Even worse, when tricksters con you into completing a voluntary transaction, even under false pretenses, it’s extremely hard to retrieve your money.

It’s important to be familiar with the common types of scams designed to separate you from your money. But first, a critical piece of advice:

Never give any person or app the username and password for your bank, credit card or cash app. Even in legitimate platforms like PayPal, if you want to add an account as a pay source, choose the option that allows you to enter your account information manually. Don’t give the app permission to access your account by using your credentials.

It’s incredible the tricks criminals can come up with. Sometimes the story is that there’s been a problem with a transaction you or someone in your family has supposedly made. These fraudsters offer to “help” you by phone, email, text or a combination of these. They often impersonate a company or cash app you already do business with. When you click on the fake email or text and enter your username and password, the criminals have just what they need to steal money right out of your account.

Sometimes these swindlers want you to be their “mule,” tricking you into moving stolen money. Scammers will befriend or romance you, offer you a job or say you’ve won a sweepstakes. They send money to you, sometimes by fraudulent check, then ask you to send some of it to someone else. When you deposit the check, it may clear initially – long enough for you to send part of it away. But when the bank finds out the check was fake, you’re left holding the bag.  

Never agree to move funds for someone who contacts you, even if they promise a relationship, job or prize. You could lose money and get in legal trouble for moving stolen funds.

Scammers will often ask you to send money using a cash app or cashier’s checks, gift or cash cards or wire transfers. Anyone who contacts you unsolicited and asks you to pay that way is up to no good. Once you’ve bought and sent the gift cards or made the cash app transfers, they’ve got your money. Even though they tricked you, because you voluntarily completed legitimate cash transactions, it can be very difficult to retrieve the stolen funds.

It isn’t a prize if you have to pay. Be extra wary of calls, emails or texts saying you’ve been “selected” to win something – especially if you’re asked to just “pay the taxes” on the prize with a card or cash app in order to receive it. Legitimate businesses won’t rush you by saying this is a one-time offer that can’t wait until you’ve had time to think it over.

If you want to give to charity, give directly. Criminals posing as or “representing” charities collecting donations for disaster relief efforts are especially common by phone. Always research a charity before you give, and send your gift straight to the nonprofit.

Don’t be intimidated by scams asking you to pay taxes or some other debt right away. These calls or messages may say you’re overdue, have underpaid an obligation or even that you may be arrested or have your accounts frozen. The IRS and real law enforcement and federal agencies won’t call and threaten you. Any letters bearing a message like this can be double-checked by calling the entity named in the letter using a phone number verified by a different source.

Scammers offering to lower your credit card interest rates, fix your credit, or get your student loans forgiven for a fee paid up front don’t intend to deliver. You could end up losing your money and ruining your credit. Some fraudsters target people with a poor credit history and guarantee loans or credit cards for a prepaid fee. Legitimate lenders don’t make guarantees like that, and they won’t prey on people who can’t afford it.

The bottom line on phone calls: If a company is selling something, it needs your written permission to robocall you. And if you’re on the National Do Not Call Registry, you shouldn’t get live sales calls from companies you haven’t done business with before.. If they do, it’s likely a scam. At the very least, it’s a company you don’t want to do business with.

What if you’ve already paid a scammer? Call your bank’s customer service department to enlist their help in preventing further loss. At Pinnacle, that’s our Client Service Center. The Federal Trade Commission offers tips on the immediate steps you should take to increase the chances of recouping your loss. No matter what payment method you used, the sooner you act, the better.