Financial cons vary. Last week I wrote about Ponzi schemes — fraud’s 800-pound gorilla.
Today I’ll cameo lesser flavors, the most common ones, and your protections. They all deploy fear, greed or pleas to your good-heartedness. They prefer older folks with accumulated retirement savings. But they’ll plunder anyone. Most aren’t caught. Totals exceed $50 billion annually.
Document fraud scams
Today’s computer graphics create better-counterfeit documents than Frank Abagnale Jr. ever envisioned (the real-life fraudster in the Leonardo DiCaprio-Tom Hanks movie Catch Me If You Can). You’re mailed or emailed phony statements from a legitimate vendor seeking fill-in-the-blank verification of account info. This one deploys fear — claiming something like freezing your account if you don’t “verify” by a specified approaching date. If you comply , they use the information to pilfer your bank, brokerage or credit accounts — basic identity theft. They love posing as the IRS or your state taxing authority. Why? Most folks fear or loathe contacting them.
How to protect yourself: Always go to the legitimate entity’s website, getting contact info and verify, separately.
Phony charities prey on generosity. A phony mailing claiming to be from the Red Cross seeks disaster funds for a recent tragedy. Authentic looking return cards and address envelopes are enclosed. Your check or debit card is cashed. You never suspected it was phony.
How to protect yourself: Always verify for a real address. Some fictitious charities sound real — such as the Oklahoma Cancer Society. Check the IRS’ 501(c)3 site to make sure an organization has charitable status.
The IRS scam
A call comes. It’s an official sounding voice — supposedly the IRS or state tax authority. She claims you owe money or must send or verify information. And if you don’t, she threatens prosecution.
How to protect yourself: Hang up. Tax authorities never call out of the blue. Whatever she says, however realistic: disbelieve.
You get an official-sounding, but friendly, call. Some seek a “fee to redeem your prize.” Others tell you that the "wonderful news" that you won a large sum of money in a familiar company's sweepstakes.
This is probably all too good to be true. If you don’t recall entering, it’s phony. The caller really wants information needed to raid your accounts.
Amazingly, most folks believe it. Most infamous? State lottery spoofs. Note: every state lottery posts winners online and how to collect — or via television.
How to protect yourself: Never give any caller personal data: account numbers, driver’s license, birthdate ... nothing. Just don’t! Some come by mail or email. If it’s bulk rate it’s a con. If from an entity that really does sweepstakes, visit its website. Always stop, separate and contact the legitimate source at its website or address. Never respond to that inbound mail. Never act immediately as specified.
And never pay a fee to them as some request — these have bigger, uglier stings awaiting.
Scammers keep inventing. They’re testing new cons now. The hottest new one is virtual kidnapping.
Never heard of it? They’re terrifying and separating people from their hard-earned money. No kidnapping occurs. But a person claiming to be an emergency professional such as a supposed paramedic convinces you your child or grandchild is in peril and will be killed unless you bank wire roughly $6,700.
A conspiring person using an accent to sound like a stereotypical Hollywood gangster profanely, heatedly, threateningly takes over. They’ve no clue who you are. They’re so skilled it doesn’t matter. They just dial. They get the money more often than not and in 20 to 30 minutes of non-stop terror — for you.
How to protect yourself: Hang up. Your clue? Real emergency professionals would never participate in that call. The perps count on panic to flush your brain, ignoring that.
There are less frequent cons. Too many to list. Dangled fear, greed or pleas to your good-heartedness are always warning signs. Your best protection is skepticism and self-education. Read more online. The more you learn the less likely you’re victimized.
Ken Fisher is the founder and executive chairman of Fisher Investments, author of 11 books, four of which were New York Times bestsellers. Follow him on Twitter @KennethLFisher.