How to Recognize Scam Calls and Keep Your Money Safe
By Tina Mason
On any given day, you probably get phone calls from numbers you don’t know. Those dreaded spam calls continue to become more frequent and the total number grew by 18% globally last year. In the U.S. that growth was even more significant, with Americans receiving an average of 28 spam calls a month (up from 18 a year earlier).
What’s worse is the situation is expanding. What was once limited mostly to landlines has expanded to mobile phones. In fact, 46% of Americans said they get spam calls on their cell phones every day in February of this year.
The problem is these calls aren’t just a nuisance; many are from scammers trying to con people into giving up their money. Unfortunately, it’s working – Americans lost nearly $20 billion due to phone scams in 2020.
The good news is you can avoid falling victim by staying informed about the latest scams (the FTC regularly updates its site with common scams), by knowing how to identify them, and by simply following some best practices.
Auto warranty scams – This one has been going on for years. It usually starts with a pleasant recorded voice introducing him- or herself and claiming to be from the “Vehicle Service Department” or something similar. The recording continues to explain that your vehicle warranty is about to expire unless you extend it with them immediately. They might even have specific information about your vehicle they have obtained through any number of ways. The warranty these scammers are offering is usually a service contract of some kind that could actually cost you more than you would pay for vehicle maintenance and repairs.
Pyramid sales schemes – These may seem like legitimate business opportunities selling products from your home. But when you look at them carefully, you’ll see your compensation is based on how many new sales people you recruit, not how much product you sell. In addition, you will typically be required to buy a certain amount of product, even if you already have enough inventory on hand. Ultimately, you’re more likely to lose time and money than make a living.
COVID-19 scams – There are several kinds of scams trying to leverage the coronavirus pandemic. Some try to sell you a vaccine. If you haven’t yet been fully vaccinated, remember that the COVID-19 vaccine is being administered for free. You can find a local vaccination site here. Another scam involves scammers posing as FEMA workers reaching out to cover costs associated with family members that may have died due to COVID-19. Unless you have already registered with FEMA for their funeral assistance program, they will not reach out to you. If you get a call or email from someone claiming to be with a government agency, it’s most likely to be a scam you don’t want to get involved with. And no, your social security number will not be suspended – yet another government-related scam that has been around for a long time.
Utility scams – Have you gotten a call from someone claiming to be with your electric, water, or gas company, claiming your service is going to be cut off unless you make payment immediately? Again, almost certainly a scam. Your actual utility companies may threaten to cut you off if you are delinquent on your bills, but they will send notifications – you can also verify your account through their website if you’re not sure. Or, simply call them if you think you may have missed a payment – in which case you may have to pay a late fee, but they probably won’t threaten to cut off your service yet.
Payment options – One of the things to note is most scammers don’t use the normal payment methods when they try to get you to pay them. Having you send a check or pay online on your oil company’s site doesn’t get them any money. They will often ask you to use Western Union of other money transfer services, or some ask you to add money to a reloadable gift card. More tech-savvy scammers may also want you to pay with cryptocurrency. They use these methods because they are mostly untraceable making it almost impossible to recover the money.
The bottom line is this: Legitimate businesses will identify themselves clearly and won’t threaten you on the phone. Most will also work with you to arrange payment plans if you’re experiencing difficulty.
If an offer seems too good to be true – like winning a large cash award from a drawing you didn’t enter, or a get-rich-quick job offer – it probably is. Never agree to anything before you have done your research. In fact, many people today don’t even answer phone calls from numbers they don’t know. That way, they can just delete the phony voice mail messages and, if they think it could possibly be real, can look up the correct phone number (never call back a number given on a voice message you think could be fraudulent) and call the bank, store, service provider, government agency, or whoever the caller claimed to be with.
The same goes for emails. Don’t click on links, don’t call numbers on emails because they could be fake, and assume offers are fraudulent unless they come from one of your trusted relationships. Even then, take care to look carefully at email addresses, names, other personal details, as well as grammar and spelling. Most fraudulent of phishing emails have mistakes in them that should raise a red flag.
Again, if you have any uncertainty, look up phone numbers yourself and make a few phone calls to verify the legitimacy of any call or email you get. It may take a few extra minutes, but that small effort could keep you, your family, and your money safe.
But, if you make a mistake and think you have fallen victim to a scam, the first thing you should do is contact your bank so they can help you with your bank accounts and make sure your funds aren’t accessible to scammers.