Four out of five consumers say they are “above average” at spotting fraud, according to the Financial Industry Regulatory Authority (FINRA), but that figure contrasts sharply with the millions who’ve been scammed in just the past few months.

The Federal Trade Commission (FTC) received 2.8 million fraud reports in 2021, a 70% increase over the prior year. The FBI received almost 850,000 complaints of suspected cybercrime last year. And veterans make tempting targets.

Speakers from the FINRA Investor Education Foundation took part in a recent MOAA webinar on financial fraud, offering details on five common fraud schemes … and how to fight them. Watch the webinar for full details, and check below for a summary of each scam type.

[WATCH THE WEBINAR: Free With Registration | Premium/Life Member Access]

1. Online Purchase Scams

These ever-present swindles became more popular during the pandemic with the increase of internet purchases. Pets and vehicles are common products offered by scammers. Avoid deals that seem too good to be true and transactions requiring you to purchase something sight-unseen.

[MOAA’S 3-PART SERIES: Don’t Be Scammed]

2. Imposter Scams

These can happen via phone, text, or a variety of other ways. Fraudsters often impersonate genuine businesses, like financial institutions or utilities, and notify you that your account is blocked or that your payment has been declined. This is a form of phishing attempt, where individuals are trying to get you to reveal personal information, such as passwords or credit card numbers.

3. Romance Scams

While romance scams have been around for many decades, they are now mostly perpetrated online. They often start out as a friend request on a social media platform, then escalate to a request for money. The twist today is that there is now often a request to invest in either cryptocurrency or stock. Many times, these schemes employ photos of real servicemembers.

[RELATED: Seniors Lost Nearly $1 Billion to Scams in 2020, New Fraud Report Shows]

4. Unexpected or Misdirected Chat

You may receive what seems like an innocuous “misdirected” message, very similar to a “wrong number” type phone call. The scammer then sends a follow-up message as an attempt to engage you.

5. Stock Manipulation Scams

There has been a sharp upswing in scams that entice the unwary to put their money in fake online investments, according to Christine Kieffer, senior director of the FINRA Investor Education Foundation and one of the guest speakers at the webinar. This type of fraud can originate from various sources, including the above seemingly misdirected chat. The target is enticed to invest small amounts at first, often transferring money from their bank to a crypto wallet and then a fake brokerage account, believing that they are making money. This type of scheme is sometimes called  “pig butchering,” alluding to the practice of fattening a hog before slaughter.

Scam Similarities

While some scams are seasonal and correspond to the holidays or income tax filing deadlines, there are some common characteristics of all these schemes: Fraudsters impersonate a credible source, they come out of the blue and are difficult to verify, they use high-pressure tactics to get you to act quickly yet claim there’s little or no risk, they demand secrecy, and ask for payment in crypto or gift cards.

Kieffer and Shay Cook, financial readiness manager for the FINRA Investor Education Foundation, also shared some tips for combatting these types of scams.

• Knowledge is power. Even if you don’t know the specifics of a scam, knowing about methods of scammers in general can help keep you safe.
• Practice cyber-hygiene. Use strong passwords on your accounts and enable multi-factor authentication. Don’t access financial accounts on public Wi-Fi. Check your security and privacy settings to make sure you aren’t sharing more information than you intend to, and never click on an unsolicited link.
• Slow down and verify. Though you may be encouraged to “act immediately,” always take the time to find and use official phone numbers and websites. Even if the message seems like it could be from a friend or relative, always check to make sure.

Kieffer and Cook shared more specific tips on what to look out for and how to protect yourself during the webinar; MOAA Premium and Life members can watch here, or register here to receive a link.

If you think you’ve been the victim of fraud, you can report it to the FTC, the FBI, and the Better Business Bureau’s Scam Tracker. You can report concerns and suspicions of securities fraud to FINRA at 844-57-HELPS (844-574-3577).