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Avoiding Financial Scams

How to Avoid Common Financial Scams

You work hard for your money, so of course you want to keep it. Unfortunately, there are a lot of people out there who want to take advantage of others. These scammers don’t care that you’ve worked for your money, they just want to take it from you. So, you’ll need to be prepared.

To protect yourself, you’ll want to be aware of some common scams and have the information and tools that you need to verify any potentially suspect situations you may find yourself in.

Here are some tips for recognizing and steering clear of financial scams.

Avoid Giving Our Financial Information

Many common scams involve contacting people and requesting financial information. Scammers often call, text, or email pretending to be banks, retailers, or government agencies. They often tell you that there’s a problem with your account, or that they need to update some information, and then ask you some personal questions. These scammers are trying to find your personal information to steal your identity, or get your financial information so they can conduct fraud.

If someone contacts you out of the blue asking for sensitive information, don’t give it to them. Instead, tell them you’re busy and ask if you can call them back. Then contact the organization they claim to be from and verify the call.

One way that criminals gain access to information is by sending out official-looking emails, pretending to be banks, government agencies, or other organizations that most people trust. They then direct you to click a link and log in with your account information. However, the link in these scam emails isn’t the website you expect it to be. Instead, it’s a scam site designed to steal your information.

Scam sites can be very convincing and they can be designed to look just like the real thing. They may even have similar website addresses. For example, if your bank’s website is YourBank.com, the scam site may be YourBank.org or YoureBank.com. These look genuine at first glance, but they’re not.

If you get an email from an organization asking you to log in, don’t click the link. Instead, manually type the address yourself (or follow a bookmark if you have one) and then log in on the actual site to see if there really is a problem.

Always Verify

As mentioned, if someone contacts you from an organization, verify that the call is legitimate before providing any information. Contact the organization directly and tell them the details of the call. The same is true if you receive a suspect email or text message. The real organization can tell you if the person who contacted you was legitimate or fraudulent.

Follow the same practice if you’re asked to donate to a charity or give your financial information out for any other reason. Always go online and verify the organization and situation before you give anyone money or information. If you don’t know the charity or the organization that has contacted you, do some research to make sure it’s a legitimate one. There are a number of websites out there that detail common scams as well as sites you can use to verify the legitimacy of claims.

Another good idea is to always run the situation by a friend or family member before you give out any important information or donate any money. A set of “fresh eyes” will help you determine whether or not the situation you’re faced with is real or a scam.

Be Skeptical of “Too Good to be True”

Bottom line, if something seems “too good to be true” it likely is. If someone contacts you telling you about a great offer or a situation that seems like an easy way to get rich, think about whether or not it sounds realistic. Remember that, in most cases, you shouldn’t need to pay a lot of money to make money or gain access to a “special offer.” Anyone that promises you a financial windfall if you just make this one expensive transaction or lend them some money short-term is likely trying to rip you off.

The same is true about bad situations that come out of nowhere. If you’re suddenly contacted by someone claiming to be from the Canada Revenue Agency, for example, and the person says that you owe a large tax bill, think about it for a while before you react. Is there any reason why you would actually owe a big tax bill? Would the CRA really demand payment in gift cards or cash over the phone? If you end up in a situation like this, hang up and contact the organization directly. Remember: Always verify.