Law #21: How to spot and avoid these popular phone scams to avoid financial nightmares
The Law
Vishing, a portmanteau of “voice” and “phishing,” is a phone scam carried out by criminals who want to con you into sharing your personal information. Based on private analyses, the Federal Communications Commission reports that Americans receive over 4 billion robocalls a month. As many as 60% of those calls are estimated to be from fraudsters. It pays to learn about the most common types of scams so that you can identify potential scammers and avoid becoming a victim.
Your Keys to Power
Here are some common types of vishing scams to be on the lookout for:
Medicare or Social Security scams. Older adults are primary targets of these scammers, and the Federal Trade Commission ranks phone calls as the number one method thieves use to reach the nation’s aging population. Be careful of criminals posing as Medicare reps, especially during the open enrollment season. These crooks attempt to access financial information like your bank account and Medicare number to use Medicare benefits or steal money fraudulently. You may also encounter the same type of scam from individuals claiming to represent the Social Security Administration. If someone calls with threats to suspend or cancel your Social Security number or asks for your bank account details, medicare information, or Social Security number, end the call.
Compromised bank or credit card account scams. You may be part of the group of Americans who have encountered calls from criminals or pre-recorded calls telling you there is an issue with a payment you made or fraud on your bank account. If you are asked for login credentials or to make a new payment, chances are someone is attempting to scam you. Never give out personal information in these types of calls. Instead, hang up and contact your financial institution using a qualified number like the one on your credit or debit card or a verified number you look up online. You could also stop by the bank if you prefer. By communicating with a bank team member or calling your financial institution on their publicly listed number, you’ll find out if your account was compromised and if they tried to reach you.
Loan or investment offer scams. Treat any unsolicited loan or investment offer cautiously. If someone calls you with an offer to get rich quick, it is likely a scam. If someone is offering to pay off your bills, help you get student loans forgiven, or help you earn millions of dollars in exchange for a small investment, chances are this is a scam. If someone calls you about a loan product you did not initiate and pressures you to act with urgency, share private details, or turn over banking information, it is very likely a scam. Legitimate investment companies and lenders do not typically make contact out of the blue or make such wild offers. If something sounds exciting and you want to follow up for more details, ask for the company's name, do some research, find a publicly listed number, and call that number. Also, do some due diligence on sites like the Better Business Bureau.
IRS tax scam. These scams typically start with a pre-recorded message telling you there’s something wrong with your tax return with a demand for a call back lest you be arrested. Don’t fall for this. The IRS does not work this way. Take time to learn what the IRS can and can't do to understand better when the IRS is contacting you.
Industry-specific scams. These scams are some of the hardest to identify because they vary from industry to industry. Say you are a real estate agent. A criminal actor pays attention to your listings and calls the day before or the day of an important open house. They tell you that something critical to your open house's success, like the electricity, will be turned off due to an unpaid bill, and the only way to avoid that is to make an immediate, emergency payment. These scammers count on your attention being divided while you focus on the myriad things you must pull together and keep in line to ensure your open house is successful. They hope you will cave and make payment without much investigation and may even convince you they are helping you save the day. Similar scams apply to many industries, including legal, medical, and consulting.
Tech support. A popular scam for several years has been the infamous tech-support call. This scam starts when you receive a call that your computer’s virus protection software is about to auto-renew. The caller offers the opportunity to renew or cancel, and in either case, they need to verify your credit card information and maybe even other details like your address, full name, and Social Security number. You've advanced the criminal caller's plan the second you release even one piece of information. Another version of the scam happens when you receive a message on your computer screen that a virus is taking over your computer, and you need to call a number urgently to protect your system. The scammers hope you call. They ultimately want you to provide access to your computer so they can install spyware to collect additional information. They may also seek to collect payment and other details from you to “verify your account,” all of which advance their agenda.
Advanced fee fraud scams. These scammers call with information about a supposed inheritance or something similar, telling you that you will receive a windfall of cash, but first, you need to make a small payment in advance for fees like a notary to verify your identity. They claim once you make this payment and complete a couple of simple steps, you will receive whatever funds they are promising. However, there is no windfall of cash, and all you will do is lose whatever money you turn over and maybe even expose your bank account or credit card to further theft.
Prize wins. These scams start with a call that you have won a prize. To receive the award, the caller must verify details like your bank account number, date of birth, address, and maybe even your Social Security number. Once they confirm these details, they claim your prize will appear in your bank account. Only there will be no deposit. Instead, you may face full-out identity theft and unauthorized bank withdrawals.
Practical Application
Be suspicious of calls from the IRS, Medicare, or the Social Security Administration. Unless you request contact from these agencies, they will not contact you by email, text message, or social media, and often not even by phone, to request personal details or financial information. If you ever receive an unsolicited call from any of these entities, take down the information, hang up, look for their publicly listed number, and call back. If someone gives you a callback number, put that to the side and instead dial a publicly listed, verified number when calling back.
Be careful with area code-based calls you don’t recognize. Scammers have learned people are more likely to answer calls if they originate from familiar numbers. They will try to use your same area code and maybe even the same prefix. Avoid calls you don’t recognize and let them leave a voice message. Listen to the voice message and decide if you want to call back.
Avoid acting out of a frantic sense of urgency. Remember that people who run these scams are good at their nefarious craft. They understand the psychology of fear and want to tap into that with threats they think will motivate you to take action. Remain calm and never give out personal information. Often, refusing to act urgently can save you from a scam.
Never send money based on an unexpected call or nontraditional payment methods. If you receive an unexpected, unsolicited call, do not send money during that call. Always hang up and return the call to the entity’s publicly available number if you suspect potential fraud. If someone asks you to pay money for a bill through an untraditional method like Zelle, Western Union, or gift cards or asks you to meet with a representative somewhere to deliver payment, stop engaging and end the call. Here’s a video from Zelle about how to spot and avoid one of these popular vishing scams.
Use spam-blocking resources. Your cellphone and some landline providers have started implementing screening services that display messages about suspected spam callers. You can also download one of these apps to help block or flag potential spam callers.
Join the Do Not Call Registry. The Federal Trade Commission’s Do Not Call Registry can help you avoid some telemarketers by keeping your number off some phone lists that fraudsters use.
Don't respond to suspicious prompts. If you receive a call with an automated message asking you to respond to questions, hang up. For instance, you may be asked to "Say ‘yes’ to talk with an operator" or “Speak your first and last name when you hear a beep.” Scammers may use such tricks to record your voice to manipulate voice-automated phone menus when attempting to access your accounts.
Hang up and call back. If you receive an inbound call requesting information, hang up, research the entity’s published phone number from a quality source like the back of your ATM or credit card, and call back to see if the company is legitimately trying to reach you.
Tap into your intuition. If something feels off, go with your gut and terminate the call. Remember, you can always call an organization back through a verified telephone number to see if they are trying to reach you.
File a complaint. If you incur a financial loss related to vishing, alert the FBI’s Internet Crime Complaint Center. If you receive a fraudulent call, contact the Federal Communications Commission.
Authority
"There is one thing in our country today that unites Republicans and Democrats, liberals and conservatives, socialists and libertarians, vegetarians and carnivores, Ohio State and Michigan fans: It is that they are sick and tired of being bombarded by unwanted robocalls.” - Ajit Pai, FCC Chairman
"The bad guys keep finding new ways and new numbers to lure you into answering the phone and falling for the scam. For them, it's easy and cheap to operate, difficult to trace and extremely lucrative." - Alex Quilici, CEO of YouMail
“Hackers find more success with organizations where employees are under appreciated, over worked and under paid. Why would anyone in an organization like that care enough to think twice before clicking on a phishing email?” - James Scott
Our Vote
Scammers take time to perfect their craft and often have a complex, sophisticated network of operations. They also know how to target their victims at the right time and place to achieve their criminal goals. Whenever someone is scammed, make no mistake that it is the fault of the scammer, yet arming yourself with knowledge about how these schemes work is the best way to take control of situations and, hopefully, prevent becoming a victim. We advocate for loving yourself no matter what has happened and keeping up with current schemes to help protect yourself in the future.
Reversal
There can be no reversal of this law. One of the best weapons against scammers is knowledge. Obtain as much knowledge as possible to recognize the telltale signs of vishing scams before you become a victim.