As artificial intelligence strengthens and today’s digital landscape grows, the line between what is a scam and what is legitimate is increasingly blurry. For this reason, the incidence of scams and the percentage of consumers who fall victim to them is higher than ever. In 2024, consumers reported losing over $12.5 billion to fraud, a 24% increase from 2023. Investment scams were the most prominent, accounting for $5.7 billion in consumer losses.
Many assume that scams primarily target older adults, but data from the Federal Trade Commission (FTC) tells a different story. Consumers across all age groups experience significant losses due to fraud. In 2024, 44% of young adults ages 20 to 29 reported financial losses from fraud, compared to just 24% of adults ages 70 to 79, illustrating the importance of educating and protecting consumers across all age groups.
While financial scams are becoming more complex, at Cary Street Partners, we are dedicated to protecting and nourishing your wealth, providing you with the peace of mind that your assets and financial future are secure. This includes helping you detect and navigate scams. To get you started, we have outlined some common examples of scams and corresponding tactics that can help you avoid them.
Protecting your wealth: How to spot and avoid financial scams
Tips to Protect Your Finances
Protecting yourself from scams starts with awareness and proactivity. The following tips outline key strategies to help you stay vigilant and protect your financial well-being.
- Stay Informed: Regularly update yourself on common scams and their tactics.
- Report Suspicious Activity: If you suspect you’ve encountered a scam, inform your financial institutions immediately. Additionally, you can report it to the FTC (reportfraud.ftv.gov) and forward spam texts to 7726 (SPAM) to report them to your mobile carrier.
- Be Skeptical: Unsolicited calls, texts or emails asking for personal information or money are red flags.
- Verify the Source: Contact the organization directly through official channels before taking action on unsolicited communications.
- Consult Professionals: Our advisors at Cary Street Partners are here to guide you in safeguarding your assets and recognizing potential scams.
Recognizing Common Scams and How to Avoid Them
There are various types of scams, and scammers continuously refine their tactics to deceive new victims. So, what are the warning signs? We will review real-life examples of common financial scams, as well as steps to protect yourself, your family, and your financial future.
Investment Fraud
Scenario: A close friend claims they’ve found a once-in-a-lifetime investment opportunity, promising high returns and low risk. Trusting your friend, you invest a good portion of your savings, only to later find out that the opportunity was a Ponzi scheme, and your savings are gone.
Real-Life Example of Investment Fraud: In 2023, Michael Glaspie plead guilty to defrauding over 10,000 victims of more than $55 million through an investment scheme called “CoinDeal.” He promised high returns and repayment, falsifying that CoinDeal would be acquired by wealthy buyers but, in reality, used investor funds for personal expenses.
How to Protect Yourself: Tread cautiously when presented with unsolicited investment offers, even if they come from those you trust. It is best to research the opportunity and consult with your financial advisor before making decisions.
Phishing Scams
Scenario: You receive an email that appears to be from your bank stating there’s an urgent issue with your account. The email prompts you to click a link and enter your login credentials. Trusting its legitimacy, you comply, only to discover that your account is now compromised.
Real-Life Example of a Phishing Scam: In 2023, Denver resident Megan Holt lost over $7,300 in savings due to a phishing scam.
How to Protect Yourself: Always verify the sender’s email address and avoid clicking on unsolicited links. Instead, contact your bank directly using official channels to confirm any issues.
Impersonation Scams
Scenario: You receive a distressing call from someone claiming to be a family member, stating they need money immediately. The voice sounds convincing, and in a panic, you send the money. Later, you learn they were not your family member and were never in trouble.
With advancements in artificial intelligence, scammers can now clone voices to sound exactly like your loved ones. The FTC has highlighted concerns over AI-enabled voice cloning being used in scams, where fraudsters replicate a family member’s voice to make their deceit more convincing.
Real-Life Example of an Impersonation Scam: Gary Schildhorn was contacted by a caller impersonating his son, followed by a call from someone claiming to be his son’s attorney. After numerous frantic calls, he was able to FaceTime his son to learn he was safe.
How to Protect Yourself: Establish a family code word for emergencies. Always verify such claims by contacting the person directly through known means before taking any action.
Tech Support & Remote Access Scams
Scenario: A pop-up message on your computer warns of a severe virus and urges you to call a provided number. The “technician” on the line requests remote access to fix the issue. Trusting them, you grant access, and they proceed to steal sensitive information from your device.
Real-Life Example of a Tech Support Scam: In 2023, Helen, a retiree in her 80s, was tricked by a fake virus warning pop-up. She called a scammer posing as Microsoft support, who quickly gained access to her computer and personal data.
How to Protect Yourself: Never grant remote access to unsolicited tech support. If you suspect an issue, contact your device’s official support service.
Social Engineering & Romance Scams
Scenario: After weeks of online conversations, your new romantic interest asks for money to cover an emergency. Wanting to help, you send funds, only to realize later that the person was a scammer exploiting your trust.
Real-Life Example of a Romance Scam: A victim lost $2 million to a romance scam after being convinced it was a genuine relationship.
How to Protect Yourself: Be cautious with online relationships. Avoid sending money or sharing financial details with someone you haven’t met in person.
Text Message Scams
Scenario: While email and phone scams have been around for years, more recently, there’s been a significant rise in text message scams, ranging from requests for money to attempts to steal personal information or access bank accounts. In April 2024 alone, Americans received an alarming 19.2 billion spam texts.
Real-Life Example of a Text Message Scam: Today’s common scam involves receiving a text message stating you have an overdue, unpaid toll. These messages often create a false sense of urgency and include a link with prompts to enter financial or even personal data.
How to protect yourself: Don’t click on any unsolicited links, regardless of whether the text demands urgent action. Scammers want you to react quickly, so it’s better to check with your state tolling agency using contact information from their website.
Confidence Through Caution: Staying Secure with the Right Resources
Financial scams are becoming increasingly sophisticated, but staying proactive and informed can significantly reduce your risk of falling victim. By recognizing common fraud tactics, verifying sources, and consulting trusted professionals, you can safeguard your financial well-being. When in doubt, your financial advisor can be a valuable resource in navigating suspicious situations.
At Cary Street Partners, we are here to help you navigate today’s complex financial landscape and ensure that your assets are protected so your financial future remains secure.
Paige W. Garrigan
Chief Marketing & Transitions Officer, Managing Director
The Wealth Wisdom Series is curated by Paige W. Garrigan, drawing from the experience and input from Cary Street Partners’ Financial Advisors. Collaborating internally with the team she gathers pertinent and timely topics for readers. With nearly 30 years of experience in the financial services industry, she has acquired a wealth of knowledge across various facets of the industry ensuring comprehensive insights for readers.
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