According to the latest Federal Trade Commission report, consumers reported losing more than $5.8 billion to fraud in 2021—a year-over-year increase of more than 70%. During 2021, the FTC received over 5.7 million consumer reports pertaining to identity theft, imposter scams, online shopping scams, and more. The most commonly reported category was imposter scams, with approximately 1 in 5 people affected last year.
While fraud is becoming increasingly prevalent in today’s world, becoming a victim of fraud is preventable. The best way to avoid being scammed is to be wary of fraudsters and stay hypervigilant about protecting your sensitive information.
Here are five common types of fraud to look out for:
1. Business email compromise (BEC)
BEC scams, also known as email account compromise, are one of the most financially damaging online crimes. If you’re a business owner or employee with the ability to transfer funds or other assets, be aware of spoofed emails that may appear to be from vendors, leadership, or other companies.
2. Employment scam
In an employment scam, a fraudster poses as a potential employer. Scammers often entice victims by saying that you can be your own boss, start your own business, work from home, set your own schedule, or make a lot of money in a short period of time. In this position, they’re able to convince victims to provide funds or personally identifiable information.
3. Lottery and sweepstakes scams
Scammers often use fake lotteries and sweepstakes to take advantage of their victims. Lured by the promise of a fake prize, victims send money to cover taxes, shipping and handling, insurance, and other fees. But if it sounds too good to be true, it probably is.
4. Online and payday loan scams
With online and payday loan scams, the fraudster targets individuals by promising a loan in exchange for a fee. They target the most financially vulnerable, including college students, underemployed, and people facing some form of addiction. Watch out for scams related to debt collection, payday loans, short-term online loans, and communications about qualifying for a loan.
5. Romance scam
Criminals use the illusion of romance and companionship to gain a victim’s affection and trust. These scam artists can then manipulate and steal from the victim by accessing funds, account information, and more. For example, they may say they have a medical emergency and need your help covering the bills. Beware of people you meet online—and never send money to anyone you have only communicated with online or by phone.
To reduce the risk and impact of fraud, it’s important that you:
Don’t respond or interact
When it comes to texts and phone calls, it’s best to err on the side of caution. If you’re receiving a call or text from an unknown number, it may be a scam. In 2021, the FTC received 377,840 reports of fraud stemming from text message solicitations alone—with losses totaling $131 million. Do not click any links or respond to any text messages from an unknown source, as it can direct you to a phishing website designed to steal your money and information. In some cases, it may even contain malware—malicious software—that can wreak havoc on your device. While it can be tempting to respond to an unknown number, when you answer robocalls or reply to spam texts, you may be unwittingly increasing your future risk of spam attacks by confirming your phone number is active. You can always report unwanted texts by forwarding them to 7726 (SPAM) and reporting other potential scams to the FTC at ftc.gov/complaint before blocking the phone number. In addition, call-blocking apps through your wireless provider or a third-party developer, such as Hiya or RoboKiller, can drastically cut down on the amount of spam calls and robocalls you receive.
Don’t give out your information
One of the most valuable things you own is your information. And technology makes it easier than ever to access and collect personal details about you. Scam artists use a variety of techniques to con you into giving them your personal information. They may try to incentivize you with promises of free prizes, gift cards, or loans. They may also try to tap into your emotions by threatening you or creating a sense of urgency (e.g., a compromised account, a problem with your payment, or a fake package delivery notification). To protect yourself, never provide any sensitive or personally identifiable information—including your passwords, account number, date of birth, social security number, or taxpayer identification—over a text, phone call, or email you receive. Once scammers have your information, they can use it to make fraudulent purchases, access your accounts, obtain new lines of credit, or even sell it to other scammers. Remember, Stellar Bank will never ask you to send us your personal information, such as personal identification numbers (PINs), passwords, account numbers, or other sensitive information by electronic means.
Do your own research
Fraud is on the rise, so it’s important to stay skeptical about communications you receive. Watch out for emails, text messages, or phone calls that ask you to click a link, verify your information, or send money. While many communications may seem to be from a legitimate source, it’s best to verify and do your own research. For example, if you receive an email from Stellar Bank about your account, go to a separate web browser and visit our website directly.
Once you’ve lost money to a scam, it’s often gone for good. But it is sometimes possible to get your money back. Stellar Bank offers businesses Fraud Prevention and Security services to help monitor suspicious activity and preempt fraudulent transactions.
For more tips on how to protect yourself against fraud, read more about Stellar Bank’s Fraud Protection. If you feel you or someone you know may have been a victim of a scam, contact Stellar Bank immediately.