The importance of avoiding scams: Eleventh in a series of financial tools to master

 

Driving on I-80 westbound, Pennsylvania 

Welcome back!

This is the eleventh installment in ‘a series of financial tools to master’.  The topic we will be covering is avoiding scams.  For those of you that have missed any of the previous series, please see the bottom of this post for links.

I had my first ‘introduction’ to the world of scams at an early age of 14.  I was looking to get rich quick at that age so I can brag to my friends and family.  I discovered a scam that asks for a tiny sum, a processing fee, to enroll me in sweepstakes/games to make money.  It sounded awesome!

Little did I know, this was a scam to get more of these processing fees from naive, unsuspecting individuals, like me...

After taken along for the ride one too many times, I finally said enough’s enough after few months.  I promised myself that I wouldn’t fall prey to these scams ever again!!!

Well, that promise didn’t last forever...

I got involved with a pyramid scheme in my late twenties, looking for a quick buck and to “...retire rich, beyond my wildest dreams...”  (The pyramid scheme’s words, not mine...)

After getting my friends and family to buy stuff they didn’t need or want, and to try to have them recruit others to this scheme, I eventually realized after few months, that only the people who started this scheme were making any money.  Like a typical pyramid scheme, it was literally robbing Peter to pay Paul...

I was too naive to see it in my greedy state of mind...This lesson, however, did turn out to be the ultimate lesson I would not forget.  I never fell prey to these scams after that.

The one lesson I got from these two mistakes is this:  You only fall prey to these scams when you’re greedy and trying to make money for free.  Like the adage says, “If it sounds too good to be true, then it probably is...”

These days there are ever evolving scams to avoid.  I recently read a news article that showed how someone lost over $100,000 from their checking account from a scammer who managed to get victim’s cell phone number’s SIM card.  The scammer pretended to be the victim and was successful in getting a replacement SIM card so the scammer can get a text message to come in to his cell phone, and not to the victim’s cell phone.  *Scammed had two factor authentication set up, where the bank sends a text with a numbered sequence to enter when accessing his bank account.  

Scammers are getting smarter at an alarming rate.  It’s our job to make it as difficult for scammers to get their hands on our money and/or information.

To that end, these are my do’s and don’ts on how to avoid scams:

Don’ts:

• Don’t be greedy.  Don’t try to make a quick buck.  Don’t expect crazy returns on investments.

Most of the reasons why we’re scammed comes from our greed and to want to show how smart we are with money.  Learn from my lessons and don’t get involved with things that don’t sound right.  Keep your bullshit meter going at all times.  

Research whatever it is you’re thinking of doing to get an idea of how others have fared.  If it’s an investment that promises 20% returns every month, research that company online.  See what others have said about the company.  Most likely, it’ll turn out exactly how you thought it would turn out.  

Stick to the ‘tried and true’.  Don’t try to reinvent the wheel.  For investments, stick to what’s worked (stocks, bonds, real estate, etc.) in the past...

• Don’t answer calls from a number you don’t know.  

There are so many scam calls coming in, that I’ve decided to not answer any of them.  If the call is legit, that person will leave me a voicemail message.

Calls can be ‘spoofed’.  A scammer might use an area code in your area to increase the likelihood of you picking up the call.  Or, a scammer pretending to be calling from the IRS, might spoof a ‘202’ (Washington D.C.) area code.  Know IRS does not call people, but rather it mails out official letters first...

These days, assume caller is a scammer.  Don’t pick up calls from a number you don’t know.

Where should I start with type of scam/phishing attempts?

These are just the ones that come to mind:

1. IRS scams:  Someone pretending to be an agent of IRS, calls to scare you with arrest, unless you pay up now with Amazon gift cards, or bank wire transfer.  
2. Your computer is infected with virus scam.  We can fix it for a fee, or with Amazon gift cards.
3. Roku or any technical set up/help scams:  A helpful toll free number pops up when attempting to set up Roku, or any other system.  When you call, you’ll have to pay to get help.  
4. Medicare/Medicaid scams:  Someone calls to ask to validate your account / personal information.  
5. Social Security scams:  Someone from the Social Security office calls to say there was an issue with your social security number, and or it’s being used by someone outside the country.  
6. Calls from your bank or financial institution:  Calls to verify your account information.
7. Car warranty scams:  Tries to sell you a useless car warranties for thousands of dollars. 
8. Utility company scams:  Tries to have you verify your personal information pretending to be from your utility company.  
9. Job scams:  A company representative you’re applying for a job asks you for either a fee or your personal information (social security number, bank info, etc.) even before doing an interview.  
10. Amazon/Apple overpaid scams:  You get a call/text from either company saying you’ve purchased something and if you want a refund, to call the number.  

The common theme with these scams is they’re pretending to be someone else, and they usually want your money or account / personal information.  Make it easy on yourself by not answering these calls!

• Don’t reply to suspicious emails.  Don’t click on any links on an email or download an attachment, UNLESS you’re expecting that particular email!

I’ve worked in IT(informational technology) field for over 15 years, and I’ve seen my share of people clicking on hyperlinks, downloading attachments, and replying to suspicious emails.  

One incident took down our company network for close to a week.  

It’s amazing how many people still fail to do the right thing after all these years.  We used to send out test emails to our employees, and every time, we would see bunch of people still clicking on hyperlinks or downloading attachments!  If these were actual phishing attacks, our company would be in big trouble!

Like the phishing calls, assume emails coming from someone you don’t know to be scams, unless proven otherwise.  Analyze the telltale signs of all these emails:  hyperlinks, bad grammar, and attachments.

Unless you’re expecting that email, DO NOT click on links or download attachments.  

These days, someone you know may send you an email.  Email accounts can be hacked.  That hacker will send emails pretending to be someone you know.  Same rules apply.  Don’t click on hyperlinks or download attachments even if it comes from someone you know!

When in doubt, call that person to verify this is legit.  This may be a nuisance, but the price you’ll pay for not being vigilant will cost you big!

Within corporate world, be careful of emails coming from someone high up in your organization (usually a CEO, your boss, CIO, CFO, etc.) who will ask you to get gift cards.  Always check the email address to confirm the email domain is correct.  For example, if company email address looks like this ‘johnkennedy@abc.com’, but the email comes from ‘johnkennedy@gmail.com’, assume this is a phishing attack.  

Everyone has to be extra vigilant these days at work or at home.  The price for not being vigilant is loss of money, your personal information, and hassle!

• Don’t share all your personal information on social media

Keep certain personal information to yourself on social media.  Most hackers will get ‘free’ information just from social media accounts like Facebook, or Instagram, when we post our family’s and our birthdays, anniversaries, and other important dates.  

When going on vacations, don’t post where you are.  Instead, post it after you’ve come home.  Burglaries of homes have happened as thieves know you’re not home, thus making it easy to pick your belongings...

Don’t share detailed information about the following which can be used to gain insight into your passwords and security words/numbers.  Social media may be the most popular place for hackers to gather free /available information about you!

1. College graduation date
2. Anniversaries 
3. Your’s and your family’s birthdays and/or other important dates
4. Your favorite anything (color, artist, numbers, teams, etc.)
5. Where you lived with exact addresses 
6. Name of your first pet
7. Your previous phone numbers
8. Name and model of your first car
9. Your best friends’ names

Do’s:

• Do change your password to be at least 16 characters long and make it hard to guess.

During my days working IT, I heard all kinds of excuses for why the password should not be so difficult to remember.  It’s the usual excuses:  I’m too old to remember difficult ones, I’ve used this same one for years, I have too many passwords to remember, and on and on and on...

Do not use simple passwords like ‘password123’, ‘qwerty123’, ‘companysucks123’ (or any variations of these passwords).

Do not use your favorite sports team names as passwords, like ‘Patriots123’, or ‘Steelers123’.

Do not reuse passwords for all your logins!  Use different password for each important account login!

Make it as hard for scammers to get to your account as possible.  Having a 16 character password will help.

• Do set up a multi factor authentication.

Most financial institutions will offer a multi factor authentication.  Set this up immediately if you haven’t done so already!  

Multi factor authentication is when you login using a password and one other method of authentication.  This is usually a text message/call or an authentication type app (Google Authenticator) that randomly generates a number sequence.

For something as important as a retirement account, savings account, checking account, etc., please set up multi factor authentication.  Who wants the hassle of dealing with the police and financial institutions if your funds are depleted by scammers?

Please set this up for ALL your important accounts!

• Do set up a credit freeze if you suspect your identity is being stolen

My identity was stolen few years ago.  I found this out when I received a call from a credit card company that I had not applied to, asking me to verify my information.  

I called them back using the credit card company’s phone # that I found using my own Google search, and found out someone was attempting to open a credit card as me.  Without verifying my personal information, I simply told the credit card company that I did NOT apply for this card.

Around the same time, one of my credit cards was used to buy $1,000 worth of sneakers from a Foot Locker in another state.  

These two incidents forced me to put a credit freeze.  

What is a credit freeze or a security freeze?

A credit freeze is when you contact a credit bureau like Equifax, to stop all inquiries into your credit history.  This basically locks out all requests to open credit under your name.  These include credit cards, loans, etc.

To set up, Google ‘Equifax credit freeze’ or ‘Equifax security freeze’.  It’ll ask you to validate your past credit history like where you lived, what phone #’s you used, what credit cards you have, etc.

Once it’s completed, it’ll issue you a numbered sequence you need to use to unlock/relock your credit.  Keep this number in a secure place.  If you lose this number, you’ll have to go through resetting that number.

Luckily, when you put a lock with Equifax, Equifax will contact the other credit bureaus for you.  

Tip:  If you need to open a credit for yourself later, you MUST unfreeze your credit few days prior to  applying for credit.  

I had completely forgotten that I had put a lock on my credit when I applied for a new credit card.  I was surprised when I was turned down.  When I called the credit card company, they explained the credit freeze.  I unlocked it so they can run a credit check.

Once I got approved, I locked it again using the same number sequence.

Since my credit freeze, I’m happy to report that I did not have any weird things happen to my credit...

Conclusion:

Being an adult is learning to deal with all sorts of unpleasant situations.  There will always be unscrupulous individuals looking to pry away our money / personal information from us.  What we learned in this digital age is that there will always be new methods for scammers to find ways to rip us off.  Learn to protect personal information and guard it like it’s your baby!

Don’t give up your information willingly.  If someone calls you to verify your date of birth, social security number, bank account number, etc., assume this person is not legit.  You can always call back the institution using a Google searched number yourself.  

Scams were around as long as there were people.  Scammers are evolving, so we must as well.  Learn to be vigilant when it comes to your personal / financial information!

Thank you all for reading!

Jake

Wandering Money Pig 

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