3 min read

3 types of financial scams

You’ll never get a real phone call from the IRS or an email asking you for your bank account information.

Having your identity stolen becomes an absolute financial nightmare, sometimes taking years to straighten out. Identity thieves are clever and relentless, and they are always coming up with new schemes to trick you. All you have to do is slip up just once to compromise your identity, and your nightmare will begin.

What they try to do is trick you into divulging personal information such as your bank account numbers, passwords, credit card numbers, or Social Security number. These are the most popular ways they’ll try to do that.

Requesting personal information by email

One of the most popular methods these unscrupulous people use is requesting your personal information by email. They’re good at making their emails look as if they came from a legitimate source such as the IRS, your credit card company or your bank.

You need to be very careful when responding to emails asking you to update things such as your account information, personal identification number (PIN) or password. First and foremost, you should be aware that no legitimate company would make such a request by email. If you get an email like that, treat it like a spam email and delete it.

Emails that look like they are from the IRS, your bank or others you do business with

There are bogus emails that look like they’re from the IRS, well-known banks, credit card companies, and other legitimate enterprises. The intent is to trick you and have you click through to a website that also appears legitimate, where they have you enter your secure information. Here are some examples:

  • Emails that appear to be from the IRS indicating you have a refund coming and claiming that additional information is needed to process the refund. The IRS never initiates communication via email. If you receive this type of email, you should know that it’s fake right away.
  • Emails from a bank indicating that it is holding a wire transfer and needs your bank routing information and account number. Don’t respond. When in doubt, call your bank.
  • Emails saying you have a foreign inheritance and that the sender needs your bank info to wire the funds. The funds that will get wired are yours going the other way. Remember: If it seems too good to be true, it generally is.

There have been cases where elderly individuals have been duped out of hundreds of thousands of dollars, and sometimes their entire life savings. The scammers primarily rely on individuals’ fear of the IRS, coupled with tactics like emphasizing the need to make a payment to avoid arrest, foreclosure or property seizure.

There are plenty of other examples. The key here is for you to be highly suspicious of any email requesting personal or financial information or requesting an immediate tax payment. Scammers will generally request payment be made by gift card, which should be an immediate red flag.

Scammers know the times of the year when the IRS sends real correspondence to taxpayers. They will send fake letters to trick people into making payments on bogus tax liabilities around those times. As a result, taxpayers need to be very careful to avoid being hoodwinked by these thieves. The best practice is to have a tax professional review any letter that you receive before you take any action. If the letter is real, then it will require a timely response, but if it is fake, it should be ignored.

Threatening phone calls

Scammers have also been known to call individuals and threaten immediate arrest if a payment related to a phony liability is not immediately made. Just the threat of arrest is enough to know that the call is from a scammer, and you should immediately hang up.

The bottom line

You must be on guard against these scammers at all times — because your life can become a nightmare if your identity is stolen.

Identity thieves will even file tax returns under your Social Security number, claiming huge refunds and leaving you with a horrendous mess to clean up with the IRS. Avoid becoming a victim by watching out for these red flags.

Contact DiMercurio Advisors today if you think you’re the victim of a financial scam.

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