Learn how scammers use psychology against you.
To protect yourself, you must consider the mind of the scammer or crafty defrauder, bent on swindling money that you earned the honest way. They get you where you live, worming into everyday activities: Your Amazon purchases. Your phone texts. Your social media scrolling. Your tax returns and student loan payments.
They call you throughout the day and spam your inbox and text messages. They impersonate federal agents, police, your landlord and — with the advent of artificial intelligence that mimics voices — your relatives.
In the United States and throughout the world, this fraudulent activity happened countless times in 2023. Most of it never was reported, but among those that were, more than $10 billion was lost to United States consumers alone.
As fraudsters get better at fooling us, it pays to consider how to keep your guard up, said Cäzilia Loibl, PhD, certified financial planner and professor of consumer sciences in the College of Education and Human Ecology.
“It's everywhere,” she said. “You almost can't escape it. But you (need) to be able to deal with it.”
Here are some tips on how to protect yourself and your family from being scammed and defrauded.
Realize that you are vulnerable
The people trying to steal your money count on you letting down your guard. People who are most vulnerable are those who think they are incapable of being fooled, said Yaniv Hanoch, a professor who researches fraud at the Research Centre for Business in Society at Coventry University in London.
“You have to guard yourself against it, and it is exhausting,” Hanoch said. “And that's what they're capitalizing on, that people have scam fatigue. One message, 100 Messages, 10,000 messages. At some point, you just respond to it because you're fatigued by this process.”
“In my mind, the number one reason why people fall prey to fraud is because they don't think that they are the person that will become a victim of fraud.”
Learn to spot imposters
Nearly half of all frauds reported to the Federal Trade Commission were impersonation scams. Scammers posing as popular companies — Amazon or PayPal — often text or email using company logos and slogans that look like the real deal. Once they’ve hooked you into calling them, they report suspicious charges, then “transfer” the call to a fake government agency such as the FBI or a bank. They sometimes use names and caller IDs of actual agents or bank officers — easily harvested from the internet.
Some falsely claim the consumer’s identity has been stolen and used in crime. Or they claim the consumer has won a fake sweepstakes or prize or that a package is undeliverable.
Don’t click on links or respond to unexpected messages, says the Federal Trade Commission. Don’t believe callers who tell you to buy gift cards, use Bitcoin ATM or move money to alternate accounts. Real businesses don’t operate that way.
Establish safe words
Artificial intelligence only needs three seconds of audio to clone a person’s voice, Loibl said. Any recording is susceptible: Your voicemail message, social media videos, etc. Voice conversion algorithms then change the real-time speaking voice of the scammer into a voice that can sound like someone you know.
To avoid getting fooled into thinking your friend or relative is being held for ransom, or needs bail money, set up safe words with your family, Hanoch said.
“A certain question to ensure … where you had your first kiss” or a cherished memory together, Hanoch said. “Many things … can still be harvested from Facebook and other social media. But think about things that can really be between you and your children, you and your loved one.”
Check your accounts often
In the first quarter of 2024, nearly 20% of all claims reported to the Federal Trade Commission involved identity theft — more than any other kind of financial fraud.
Loibl teaches students in an undergraduate personal finance course to always be on guard for data skimming (at the gas pump and on public Wi-Fi) and other data breaches.
“People look into their checking accounts and all the money is gone…” Loibl said. “One recommendation is to check your checking account and your credit card account daily” for suspicious activity.
“Studies from the (Consumer Financial Protection Bureau) show about 50% of credit reports have incorrect information on them. And this could be (due in part to) identity theft, too.”
These errors can hurt housing options and job opportunities, so advocacy groups encourage consumers to make frequent “credit checkups” using free credit report services.
Freezing your credit report builds in automatic delays that could keep a scammer from ripping you off.
Take advantage of tools
Several apps help consumers protect their information to prevent identity theft and keep scammers from accessing information about you.
“It is a way to pay a couple of dollars each month but have a peace of mind. And your identity is protected,” Loibl said.
DeleteMe removes your personal information from online search engines and data broker sites. 1password automatically generates passwords for new accounts, securely shares credit card information and passcodes, and alerts you when your data is breached.
Get help from trusted sources
If you discover that your identity has been stolen, or if you think someone might be trying to scam you, reaching out to trusted organizations can provide a lifeline.
- Your bank: Call the number on the back of your bank card or in the app. Better yet, go “to the bank branch that is nearest and ask them about the incident.”
- Your police department, local bar asociation, financial advisor or state attorney general’s office. A list of common scams and advice is available from the National Attorneys General Training and Research Institute.
- Nonprofit agencies: The National Foundation for Credit Counseling helps connect consumers with credit counselors who can offer advice and get debt relief if you have been defrauded.
- Your local university Extension Office: “Our family and consumer sciences educators are well equipped to answer these questions. They hear a lot, so they know a lot,” Loibl said.