At least once a week, and oftentimes more frequently, I get a call on my cell phone from someone claiming I have won a cruise. While sailing to the Bahamas sounds appealing this time of year, I know this call is from a scam artist trying to get me to buy something or steal my credit card information, so I just hang up. The pre-recorded message (complete with seagulls crying in the background) and the fact that I have no reason to anticipate someone would offer me a free cruise, are clear indicators that there is something fishy about these calls. Unfortunately, it is not always so easy to spot a scam.
Several of my tax planning clients have been targeted by scam artists over the past few months. Below is a round-up of some of the scams that are going around, some tips for how to determine if something is a scam, and advice for what to do if you think you have been scammed.
The IRS Scam – One of the most serious scams going around right now involves people who claim to be from the IRS calling and telling you that the police are about to arrest you unless you send money to pay taxes or a fine. If you are an immigrant, they might also claim you will be deported.
Online Scams – There are so many online scams out there it is impossible to describe them all. NEVER give out your banking or tax information online. If you want to purchase something online, always use a credit card. Most credit cards come with fraud protection, so if you are scammed the company that issued the card to you will help you get your money back.
Reverse Mortgage Scams – Reverse mortgages are a good option for some people, but it is important to know all the details about how they work before signing up for one. It is also important to thoroughly investigate the company offering you a reverse mortgage because there are some fake companies out there that will happily take the deed to your house and give you nothing in return.
Healthcare Scams – Your doctor, your insurance company, and the government (like Medicare and Social Security agents) will never need you to give them your personal information over the phone. Only give your personal information to these entities in-person, or you could be giving it to a con artist posing as a healthcare, insurance, or government agent.
Funeral & Burial Scams – Unfortunately, the pre-paid funeral and burial industry is rife with fraud. Pre-paying for these services can make good financial sense, but make sure you are doing business with a reliable company.
The list above is by no means a complete list of all the scams out there. And unfortunately, the fact that these scams are getting publicity means that they are likely to be abandoned and replaced by new scams. In that sense, fighting scams is like playing whack-a-mole, when you knock one scam down, another one pops up in a different place. It is, therefore, a good idea to know some red flags that can tip you off that something is a scam.
If it sounds too good to be true, it probably is. This old saying holds true today. If you are being offered something that sounds impossibly good, beware.
Act now! If you are being pressured to make a quick decision, be cautious about proceeding. The early bird may get the worm, but the second mouse gets the cheese.
That’s personal. One of the oldest tricks in the book is gaining the confidence of a target in order to make them trust you. If a salesperson, care-taker, or other person is suspiciously curious about your family and hobbies, be on the alert. They may be trying to build a rapport with you so they can ask for money or personal information that will allow them to steal your money.
If you think you have fallen for a scam, the first thing you should do is alert others. Your family members, bank, and attorney should be notified because they may be able to help you figure out what is going on and put a stop to it, and they can help you decide whether you should call the police.