3 Dangerous Financial Scams and How to Avoid Them

Written by , November 1, 2012

3 Dangerous Financial Scams and How to Avoid ThemTaking responsibility for our own financial health involves a lot of deliberate action on our parts. We actively monitor and research our investments, budget for our income and expenses, and try to avoid making decisions that would negatively impact our overall wealth.

But another aspect of keeping your financial situation healthy is to be on guard against those who would seek to do you harm. We’re talking about dangerous financial scams here. One thing that makes these scams so dangerous is that it’s not always so obvious that they’re scams.

Here is some advice on three of the most prevalent financial scams and how you can protect yourself from them.

  • Facebook Scams. What started out as a way for college students to meet and hang out online – Facebook – has turned into a daily obsession for many. Even users who don’t log in to Facebook every day still use it as their primary means for checking in with family members who live far away, for sharing photos, and interacting with their friends. Because of these ties, you may be targeted for a number of different scams on Facebook.
    • One common variant is where you’ll receive a Facebook message from a friend who claims to be travelling, has lost their wallet and cell phone (so you can’t contact them directly), and needs you to wire them money so they can buy a plan ticket home. But the person who contacts you is actually someone who’s hacked your friend’s account.

      Another scam is based on the popularity of Facebook’s various “social games.” One key element to these games is that you often perform better and score more when you interact with more people through the game. And if your real friends aren’t interested in playing those games with you, you might be tempted to connect or form “friendships” with other players you don’t know on Facebook just to do better in your game. Unfortunately, many of these players are phony accounts that were set up with the express purpose of connecting with players such as you, and then trying to run scams, by harvesting your personal information or targeting you directly.

  • Phishing Scams. So-called “phishing” scams remain as prevalent and dangerous as ever. Despite the fact that most of us think we’re sure to spot any attempts to get us to log in to imposter banking, brokerage or other financial websites using our passwords and other personal details, the scams continue to propagate. We keep getting these types of phishing emails because they still work on some people. In order to protect yourself, make sure to always type the URL of your bank directly into your account browser, and never rely on clicking links you might receive in an email.
  • Free Wi-Fi Access Points. An increasing number of us have laptop computers, tablets and smartphones that can connect to the Internet via a wi-fi connection. Even if we tend to use these devices most while we’re at home, we still use them when we’re other places as well. Unfortunately, we’ve become a bit complacent when it comes to knowing exactly what type of connection we’re using to connect. Scammers in airports or coffee shops can create wi-fi hotspots from their own laptops – with names such as “PublicWiFi” or the like, and then steal whatever information you type while connected.
  • Not surprisingly, a common theme throughout these dangerous scams is the online element. Even though we’ve become conditioned over the years to guard against in-person scams, we haven’t quite developed the same degree of healthy skepticism in our online interactions.

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