Fintech Industry: a Platform For Scammers To Take Your Money Easier
Every year, consumers lose billions of dollars to scams. In 2018, senior Americans lost $2.9 billion to frauds and racket schemes while younger consumers (20+) lost around $400 to scammers. While these schemes have been going around for decades, the progression of fintech has exposed new avenues for fraud and consumer deception by providing more opportunities for hackers to access your personal and financial information.
However, not only are consumers losing money to these frauds, they are dealing with the consequences on their financial health and in some cases, their mental and physical health as well. Therefore, it is more important than ever before that they remain alert and informed of some of the common scams out there, and what they can mean for your financial situation now and in the future.
1. Credit Card And Digital Wallet Scams
One of the most common scams, credit card scams have cost consumers $6.4 billion in 2018. Although this is a marked decline from 2017, credit card scams remain one of the go-to scams out there, and one of the most dangerous for your financial health. However, schemes are no longer limited to the theft of credit and debit card information. They have progressed alongside the evolution of consumer payment behavior.
Digital payment wallets such as ApplePay have become targets of fraudulent activity. While some banks and financial authorities offer compensation schemes, it can still impact your credit score and record. Not only is your credit utilization raised unintentionally while the reimbursement and reversal process is ongoing, but your ability to secure finance in the future is may also be compromised. Fortunately, there is a magnitude of tools and information available to help, including details on DIY credit repair at home. However, this can still take some time.
Finally, you may also find yourself facing higher interest rates because of this. The best approach is to protect yourself from the onset by practicing good credit management habits, including installing individual credit and fintech tracking apps and trackers along with regular monitoring of your credit reports and activity. Additionally, consider routine changes in your security credentials such as your credit pin or access code your digital wallet.
2. Tax Imposter Scams
IRS scams were the number one scam affecting senior Americans in 2018. While more of the younger taxpayers tend to fall victim to this, it is seniors that lose more on an average. Those aged 80 and older lost an average of $1,700 in 2018.
While fraudulent phone calls from the IRS are not new, tactics are certainly evolving and you may get correspondence from people impersonating IRS officials or pretending to be Taxpayer Advocate Service employees dedicated to helping you work out your taxes owed or refunds entitled to.
They will also pretend to require your social security number or taxpayer-identification number for security and identification purposes. Imposter scams were one of the top financial scams in 2018, raking in over $34 million in losses for the year.
Besides the loss of financial resources, scams such as these can also jeopardize your financial future, including retirement funds. To minimize your risk, start with always looking for official identification on any phone calls or correspondence. You should also keep in mind that the IRS or any relevant tax authorities will no demand immediate payment for any taxes owed. When it comes to accessing your tax information online or dealing with fraudulent emails, be sure to implement multi-factor authentication such as fingerprint ID.
3. Ransomware Scams
In the age of technology, this is one of the most likely scams and involves scammers gaining access to your computer, mobile phone, or tablet by getting you to download an email or website attachment.
Once downloaded, the virus or program can clone personal information or provide a backdoor for scammers to access sensitive files. With this, they then have the power to make changes to your accounts, bar your access, and hold them in exchange for money. It also gives them the power to make unauthorized purchases which can then ruin your credit accounts and deplete any savings.
Without access to funds or sensitive information like account passwords also means that consumers can fall behind on their financial obligations such as utilities or mortgages, thanks to having no access to resources. This comes back to a negative impact on your credit standing along with the potential loss of assets including as any financed vehicles or home.
The best approach to fraudulent activity is to take steps to prevent it in the first place. It also helps to prepare your finances for the unlikely occurrence of this happening to you, such as choosing financial services that come with fraud compensation. The good news is that just as much as financial scams and vulnerability are increasing, so are the awareness and innovation designed to stop them.
How To Report Scams
You can also officially report scammers and questionable activites to the Federal Trade Commission using the link below:
How To Protect Yourself More
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