It was just a regular day when Alexis Abramson, Ph.D., a fraud prevention expert, called a family member to check in.
“This is a really, really bright family member,” Abramson says. When she asked where they were, they said, “‘Oh, I’m at the bank. My friend is out of the country and she ran out of money, and somebody stole her bags and her passport. She needs me to wire money.’”
Alarm bells went off for Abramson. While her relative felt as if they were helping a friend, they were actually on the verge of being scammed out of money.
Wire or money transfer fraud, as in the case of Abramson’s relative, occurs when fraudsters try to convince you to send them money, often involving fictional dire circumstances. Another common scam is phishing, which is when scammers pretending to represent a company you trust will reach out via email or text and ask you to click on a link or contact them to provide personal information.
The common denominator? No matter their exact approach, scammers try to trick consumers into handing over either money or personal information. In 2019, U.S. consumers reported more than 3.2 million scams to the Federal Trade Commission (FTC), according to the agency’s report of the top scams in 2019. The FTC is a government agency whose purpose is to protect consumers by preventing unfair, deceptive or fraudulent practices in the marketplace and maintaining healthy business competition.
The millions of people who have been impacted by a scam wonder: What can you do if you got scammed and lost money? It’s a challenging situation, but there are concrete steps you can take. First, take a deep breath, Abramson says. By clearing your mind, you can be strong and thoughtful as you take action.
Next, follow the below guidance from security experts on what to do if you’ve been scammed out of money, how to potentially recover your money from a scammer and ways to safeguard yourself against future fraud attempts.
Start by reporting the scam
If you’ve been scammed out of money, it’s important to act fast and secure your account. Here’s what the experts recommend you do as soon as you notice any suspicious activity or suspect that you have been scammed:
Notify your bank or credit card issuer
Contact your bank or credit card issuer immediately to report any unauthorized charges and request a new debit or credit card, says Mason Wilder, a certified fraud examiner and senior research specialist at the Association of Certified Fraud Examiners.
You can likely find helpful resources about what to do when scammed out of money on your bank’s website, like the Discover Security Center. You may be prompted to take additional action—like filing a report with the police or the Social Security Administration—depending on your individual circumstance.
Consider filing a complaint with the Federal Trade Commission
If you’ve been a victim of fraud, identity theft or deceptive business practices, filing a consumer complaint with the FTC may be a good option for you to potentially recover money from a scammer. In 2019 alone, the FTC was able to issue more than $232 million in refunds to people who lost money to illegal business practices.
Document the details
Regardless of the type of scam you’ve experienced, Abramson recommends documenting the details of your case. As you work to recover the money you lost to a scammer, these details can be helpful for your bank or the FTC. Whether it’s an email, text or social media message you received from a scammer or your bank statement with fraudulent charges highlighted, print or document the information and make copies of everything.
It’s also important to have patience in this process. Both Wilder and Abramson say the timeline to recover money from a scammer can vary based on the amount and the details of the incident.
“There are several variables, such as the type of scam, how much money they stole, how much information they obtained and where the money was stolen from,” Abramson says.
Secure your finances and accounts
When it comes to protecting your money and information from potential fraudsters, the best defense is a good offense. Follow these steps to recover from being scammed and to protect yourself from future fraud attempts:
Consider a credit freeze
If you’re wondering what to do when scammed out of money and your personal information has been compromised, consider placing a credit freeze on your credit report. A credit freeze is a way to restrict access to your credit report, and it could help prevent a scammer from taking out a loan or a line of credit with your information, Wilder says.
“I’d recommend a credit freeze to anyone who has discovered they are a victim of identity theft or who has found unauthorized purchases on their debit or credit cards,” Wilder adds.
To freeze your credit, contact the major credit reporting organizations—TransUnion, Equifax and Experian. Note that a credit freeze will remain in place until you ask the credit bureau to lift it, either temporarily or permanently.
“I’d recommend a credit freeze to anyone who has discovered they are a victim of identity theft or who has found unauthorized purchases on their debit or credit cards.”
Create a fraud alert
If you decided not to place a credit freeze on your credit report but still want to keep your personal information safe, Abramson recommends a fraud alert, available to everyone free of charge.
If you already have a credit freeze in place as part of your recovery from being scammed, there’s no need to take this step. A fraud alert wouldn’t be seen by new or prospective creditors until the freeze is lifted, Wilder says.
Unlike a credit freeze, which locks your credit, a fraud alert can be helpful in preventing future fraud as credit organizations would need to verify your identity in order to allow new lines of credit, Abramson says.
There are different types of fraud alerts you can consider based on your situation and needs. To place a fraud alert, contact TransUnion, Equifax or Experian. Keep in mind that while fraud alerts may be effective at stopping someone from opening new credit accounts in your name, they may not prevent the misuse of your existing accounts, according to the FTC.
Reset your passwords
When you are recovering from being scammed, Abramson recommends resetting your passwords. Focus on any compromised accounts or accounts that may be linked to your payment information, like your mobile banking app or online shopping sites.
Rather than something easy to remember (think “Password1234), create a password that is strong and unique (think “fdslkjfsUU3402HjkljiuuguyHU23). Too much to remember? Try a password management tool or program to help you create strong passwords and store your new credentials.
Opt for two-factor authentication
Two-factor authentication is an extra layer of security that requires an additional form of identity confirmation outside of your username and password. If you enable two-factor authentication, a one-time code will be sent to you via text message or email each time you log into your account with your username and password. Only the registered phone number or email address will be able to verify and log into the account.
Whether on social media or your mobile banking app, this added security is another way to recover from being scammed by verifying that you, not a scammer, is the one accessing the account.
Set up alerts for your bank accounts
When recovering from being scammed, you may also want to enable alerts on your bank accounts to help you spot suspicious activity. Consider setting up alerts for every transaction or for transactions over a certain dollar amount. You may also be able to set up alerts for ATM withdrawals, or if your account is overdrawn.
“If you’re going to make a purchase in a situation that carries a little bit higher risk of being intercepted in some kind of fraud scheme, use a credit card, if you can and if you have one.”
Use a credit card in unfamiliar transactions
If you’re debating whether to use your credit card or debit card, Wilder and Abramson both suggest using a credit card if you’re unsure about the security of a transaction.
“If you’re going to make a purchase in a situation that carries a little bit higher risk of being intercepted in some kind of fraud scheme, use a credit card, if you can and have one,” Wilder says.
That’s because debit card transactions are immediately taken from your bank account, Wilder adds.
Learn how to identify scammers
After dealing with the fallout of being scammed out of money and working to recover from being scammed, familiarize yourself with the most common types of scams. By understanding how you may come in contact with a scammer and what experts consider to be red flags, you may be able to spot a potential scheme.
Here are tips to keep in mind to help you stay vigilant, including how to protect yourself online:
Be wary of pushy callers
Phone calls were the top way people reported being contacted by scammers in 2019. Those scammers often persistently asked for money or personal information, according to the FTC’s 2019 scam report.
Be wary of a caller who asks you to spend money and then rushes you into a decision, Abramson says.
“You should really be concerned about that and make sure that you don’t act too quickly,” she says.
Keep a close eye on phishing emails
Similar to scam calls, scammers send phishing emails to try to access your personal or financial information or to get you to download malicious software.
Phishing emails are often full of dodgy spelling and bad grammar, Abramson says, so pay close attention to those telltale signs.
Suspicious links are another clue, so think twice before clicking, especially if an email prompts you to provide sensitive information like your user ID or password. Before clicking a link in an email, look at the sender’s email address to make sure it matches the company, Abramson advises. If the email address doesn’t appear to match the company name, don’t click on the link.
“If the emailer uses a brand name when they contact you, phone the company and confirm that this is an offer or email they are actually sending to customers,” Abramson says.
Another way to confirm whether you’re walking into a scam is going to a scam database to make sure there are no complaints against the business the emailers say they are from, she adds.
Do your research before making a donation
During times of financial hardship, like a recession, scammers may target consumers who are looking to help those in need. As Wilder notes, crowdfunding scams increased as a result of the COVID-19 pandemic.
“People will impersonate legitimate nonprofit organizations, or create fake ones, and take advantage. Sometimes they’ll use other people’s photographs or copy somebody else’s plea for help with their medical bills and try and get it spread around on social media,” Wilder says.
To avoid falling for such a scam, don’t assume all crowdfunding requests are legitimate. Consider independently vetting donation requests or donating only to people you know and trust. Or, donate directly to a well-known charity’s website.
According to the FTC, other ways scammers are taking advantage of the pandemic include:
- Posing as COVID-19 contact tracers.
- Sending fraudulent texts or emails posing as government organizations.
- Sharing ads or offers for vaccinations and home test kits.
Stay up to date on the latest scams
The most common mistake people make is having an “It could never happen to me” attitude, Abramson and Wilder say. Even trained professionals can fall for scams.
Whether you’re wondering what to do when scammed out of money or are interested in learning more about how to protect yourself, it’s smart to keep up to date on the latest scams that are out there. By staying informed and proactively protecting your private information, you can help keep your finances safe and scammers at bay.
Mobile banking is a great way to monitor your checking account to quickly spot any fraudulent transactions, but it isn’t the only way to a secure account. Keep reading to learn about simple steps you can take to protect your checking account.
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