FDIC lists 10 common frauds targeting consumers and ways to avoid falling for them

McClatchy-Tribune Information Services

July 17, 2017

Scam artists have become increasingly sophisticated over the years, but remembering a few simple rules can be surprisingly effective at keeping your money safe.

One of the stalwarts is to avoid offers that seem too good to be true, especially if you’re being pressured to act fast or to keep a transaction secret, said Michael Benardo, manager of the cyber fraud and financial crimes section at the Federal Deposit Insurance Corp., which often hears from bank customers who’ve been victimized.

In addition, be cautious of unsolicited emails or text messages that ask you to open an attachment or click on a link. That’s a common way for cybercriminals to infect your computer with malicious software, which can steal your personal financial information or spy on you by capturing your keystrokes, Benardo said.

And no matter how legitimate an offer or request may sound, don’t give out sensitive personal data such as bank account, Social Security or credit card numbers or passwords to anyone unless you initiate the contact and know the party is reputable, he said.

In an effort to educate consumers about what to watch out for, the FDIC recently released a list of 10 common frauds targeting bank customers.

—Government "impostor" frauds. These schemes start with a phone call, letter, email or text message supposedly from a government official demanding an upfront payment or personal financial information. In the IRS scam, for example, the crook claims you owe back taxes that must be paid immediately. "They might even threaten you with a lawsuit or arrest if you don’t pay," Benardo said. Federal government agencies won’t ask people to send money for prizes or unpaid loans, and won’t ask for money to be wired, he said. Another common impostor scam involves thieves pretending to be from Microsoft or a technology repair service and claiming the person’s computer was infected with a virus. They then trick people into installing malicious software used to steal personal data, and may demand payment to remove the software.

—Debt collection scams. Fraudsters pose as debt collectors or law enforcement officials attempting to collect bogus debts. Red flags include a caller who won’t provide written proof of the debt, or threatens arrest or violence for not paying.

—Fraudulent job offers. These ploys often involve work-at-home offers in which prospects are required to pay money in advance or provide personal financial information. One variation involves fake part-time jobs as a "mystery shopper" visiting stores and submitting reports about the experience. Or the job might be to receive a $500 check, go "undercover" to a bank, deposit the check into an account, and report back on the service after wiring the "employer" $500 to cover the check, which turns out to be counterfeit.

—Phishing emails. These involve legitimate-looking emails purporting to be from a bank or other popular entity asking for personal information. They may direct people to fake websites that appear to be exact copies of real websites, except for a slightly different web address.

—Mortgage foreclosure rescue scams. These entail promises to refinance a mortgage under much better terms. They may include significant upfront fees, or trick the homeowner into signing documents that transfer ownership of the property to the criminal. Common warning signs include a "guarantee" that foreclosure will be avoided and pressure to act fast.

—Lottery and sweepstakes scams. Potential victims are told they’ve won a big prize, but must first send in money to cover taxes and other fees.

—Elder frauds. Senior citizens are a major target of crooks trying to cheat them out of their life savings. Warning signs include unsolicited phone calls asking for a large amount of money before receiving goods or services, and special offers for seniors that seem incredible, such as an investment guaranteeing a high return.

—Overpayment scams. These typically involve a thief sending a check for something someone is selling, but for more than the asking price. The scammer tells the seller to deposit the check and wire the difference back. In a few days, the check bounces, and the victim is out the money, plus the merchandise that already may have been sent.

—Ransomware. This malicious software holds a computer or smartphone hostage by restricting access until the victim pays a ransom. Ransomware is commonly spread when someone clicks on an infected email attachment or link leading to a contaminated site. The malware can be passed around on a contaminated storage device, such as a thumb drive.

—Jury duty scams. A thief calls pretending to be a law enforcement official warning that the person failed to appear for jury duty and will be arrested unless a "fine" is paid immediately. The caller may ask for debit account and personal identification numbers, which are then used to create a fake debit card and drain the victim’s account.