Since so many of life’s daily activities are transacted in the digital space, it’s quite common to be exposed to fraud. From data breaches and hacking to deceptive social media and text scams, your personal financial information is under assault. With fraudsters becoming more and more sophisticated every day, what steps can you take to stay one step ahead?
One of the most important ways to defend yourself is to be aware of the most common fraud schemes. The Federal Trade Commission and the International Association of Financial Crimes Investigators are reliable sources of timely information and fraud prevention tips. The following are just a few of the scams that target young adults:
- Card Cracking – Individuals respond to an online solicitation, typically via social media, to earn easy money. The fraudster deposits stolen or counterfeit checks into the victim’s account and they, in turn, give the criminal direct access to their account by providing their debit card, PIN, or online credentials. When the funds are withdrawn and the victims report a lost or stolen debit card, they become accomplices to a crime and liable for the financial loss.
- Instagram Scam – Fraudsters contact victims via Instagram direct message to share a link (bit.ly) of interest. When users click on the link, they inadvertently turn over full access to their Instagram account. From there, the fraudster can clone your account, post ads on your profile, and message your followers.
- Student Loan and Scholarship Scams – This fraud scheme preys on the financial need of students trying to cover the costs of higher education. In exchange for up-front fees, students are offered scholarships, financial aid, or student loan debt relief which turn out to be fraudulent. In the process, victims often share personal data that compromises their identity and the security of their accounts.
- Tech Support Scam – Victims are contacted by individuals posing as technical support agents from well-known companies like Microsoft, Apple, or Amazon. They alert the customer to an urgent system bug, security breach, or fraudulent purchase. Once they get your attention, fraudsters get to work on fixing the problem, gaining access to your personal data, login credentials, and your entire system should you allow them to remote into your computer.
- Peer to Peer (P2P) Payments – Mobile payment apps like Venmo, CashApp, and Zelle are convenient ways to send money quickly and securely through a smartphone. However, they can be susceptible to fraud and financial loss, if users are not careful to verify a recipient’s account information before completing the transaction or secure their account with strong passwords.
While the scams are numerous and diverse in scope, there are some basic prevention tips you can put into practice to reduce your chances of becoming a victim of fraud:
- Be wary of any unsolicited offers from people or organizations that you do not know, especially if they promise you something that sounds too good to be true, like earning or saving money.
- Never share your personal information (Social Security number, date of birth, account or card numbers, passwords, or PINs) or your online credentials with anyone.
- Instead of clicking on links, always conduct independent research to verify that the individuals and organizations you are transacting with are legitimate.
- Avoid giving money to or receiving it from an unknown or unvetted source. If in doubt, check with your financial institution’s fraud department to determine your next steps.
- Report any suspicious solicitations, posts, or suspected fraudulent activity to the Federal Trade Commission.
For additional information about fraud schemes that target young adults, download a copy of the Student Guide to Frauds and Scams.