How to Avoid Scams and Prevent Financial Fraud

Types of Scams to Look Out For

Unfortunately, far too many people are looking to scam you out of your hard-earned money. Some members of our First Financial Bank team share some of the most common scams customers have encountered:

• “Online dating: many of our lonely, older customers start chatting with people overseas. They claim to be in the military and fall in love but say they need money wired to them to be able to come home and live happily ever after” – Jennifer Wallin, Preferred Banker
• “Recently, we’ve heard a lot about scams where people receive text messages from various banks or some business requesting payment on a bill.” – Abby McDaniel, Assistant Lobby Supervisor
• “People bringing large checks thinking they are from legitimate resources.” – Dana Riddle, Head Teller
• “Sending fraudulent checks and telling the customer so much of the funds are theirs, but they must send a small portion back to the sender.” – Felicia Newsom, Assistant Lobby Supervisor
• “Someone promising them money or prizes. They just need to send them upfront money such as money orders and/or gift cards to receive the gift.” – Tracie Milholland, Branch Manager
• “Receiving phone calls from what was supposedly First Financial Bank’s fraud department. I have had two different customers state their caller ID even read “First Financial Bank”, but the caller could not provide any further information until a debit card number with expiration was given in full. Thankfully, our customers knew to hang up and contact their local branch.” – Amanda Dennis, Assistant Lobby Supervisor

Understanding the types of scams that affect today’s account holders can help you better catch and address fraud before it compromises your cash.

Phishing Scams

Phishing scams involve fraudulent emails or texts that seem to come from your bank. The email address may include the bank’s name, or the content of the message may appear to be from a legitimate source. Tracy Holland, Branch Manager, warns, “We had a couple who received calls from someone who pretended to be from the bank’s fraud department asking if they had made a purchase. When the couple replied ‘no’, they asked for card information. The fraud department will never ask for your information. They already know it.”

If you receive a phone call, text message, or email claiming to be from your bank:

• Don’t click on any of the links or attachments that are included.
• Don’t follow any urgent calls to action, even if they threaten to charge a fee or give you a time-sensitive reward.
• Don’t call, text, or email using the information provided in the message.
• Do visit the contact page on your bank’s website and reach out to them directly.

Identity Theft

Identity theft scams occur when someone illegally obtains your personal information to access your accounts. Here are a few examples:

• A scammer may call or email you claiming to be a bank employee, government official, friend, or family member and ask to confirm your financial or personal information.
• A scammer may steal your wallet, obtain bank statements or tax documents, or get your information in a data breach from a business or nonprofit that allows them to access your accounts.
• A scammer may intercept your mail to obtain account statements, debit cards, or credit cards.

Here are a few tips to avoid being a victim of identity theft fraud:

• Do use strong, different passwords for each of your accounts and change them regularly.
• Do promptly cancel or freeze all credit and debit cards if you lose your wallet.
• Do shred documents containing personal information before disposing of them.
• Do fully wipe your old computer’s hard drive before donating or recycling it.
• Do check your credit report each year, ensuring no new cards or accounts have been opened in your name, without your consent. You may want to check more often if you have had your information stolen or your account breached in the past.
• Do check your bank accounts regularly and report any suspicious transactions.
• Don’t provide financial or personal information in an email or over the phone. Hang up and call your bank back using the number provided on their website.

Fraudulent Checks

Fraudulent check scams occur when someone tells you to deposit a check and return some of the money. The checks often look legitimate or are real checks from someone with a stolen identity. It may take weeks for the check to be recognized as fraudulent.

There are many possible fronts for check fraud, including:

• Hiring you as a “personal assistant”, then sending you a check to cover expenses
• Claiming you’ve won a sweepstakes but requiring you to send money from a check back to cover fees
• Purchasing something from you by overpaying with a check, then requesting a refund

Follow these do’s and don’ts for check fraud prevention:

• Do ignore offers that request payment to receive a prize or reward.
• Don’t use a check to wire money, send gift card PINs, transfer money orders, or buy cryptocurrency for a stranger.
• Don’t accept a check for more than a product or service’s selling price.

Advance Fee Fraud

Advance fee fraud is a scam that asks you to pay a fee in return for a benefit. This may be a reward, money, investments, products, or services. The scammer always asks for an upfront payment, which may be disguised as a membership payment, handling fees, administrative fees, or taxes.

• Do be wary of any offer that requires an advance or upfront fee.
• Do research the organization making the offer and contact them directly using the information on their website.
• Don’t send advance payments for loans, rewards, or inheritances.
• Don’t share your personal or financial information with a stranger, even if they offer a reward.

Investment Fraud

Investment fraud occurs when a scammer tries to make you invest money but takes the money for themselves. Many types of investment scams exist, including:

• Ponzi schemes, which repay earlier investors with the money from newer investors
• High-yield investment programs, which promise high returns on (fraudulent) investments
• Recover room schemes, with which a scammer says they’ll recover money lost to other investments for a fee
• “Pump and dump” fraud occurs when scammers purchase cheap stocks and lure investors into paying a higher price, inflating the stock’s value. The scammers then sell their shares, causing the price to crash.

Take these steps to prevent investment fraud:

• Do research on the investment company and check their financial statements using the SEC’s EDGAR filing system.
• Do research on the individual offering the investment, ensuring they’re licensed to sell securities in your state.
• Do be skeptical of unsolicited investment offers or anyone who pressures you to make an immediate decision.