The more apps that surface to make our lives easier and more convenient, unfortunately, the more we become exposed to potential scams. As technology continues to get more sophisticated, scammers’ efforts to steal our money escalate as well.
Here are some of the most common scams being launched today, as well as tips for how you can help protect your money against these scams.
Scams targeting organizations
Scams target individuals and companies alike.
In a recent survey by the Association of Financial Professionals, 65 percent of respondents said their organizations were victims of attempted or actual payments fraud in 2022. Of those who lost money, 71 percent were compromised through email. Larger organizations with annual revenue of $1 billion or more were the most susceptible to email scams.
Phishing emails are among the most common email scams. Scammers design these emails to resemble communications from trusted companies and ask recipients to click on a link leading to a fake but convincing-looking site. The email asks the potential victim to log in and provide personal details. Once criminals have this information, they can gain access to bank accounts or commit identity theft.
Spear phishing is similar but more targeted. Instead of sending out generic emails, the emails are addressed to an individual or a specific organization. The criminals might have researched a job title, the names of colleagues or the name of a supervisor or manager.
And now, scammers are using artificial intelligence (AI) in their schemes.
Traditional banks increasingly use APIs, or application programming interfaces, which connect apps and platforms, creating additional potential points of attack. Criminals use generative AI to create credible messages quickly and then use automation to scale up their scams. According to the anti-bot security company Netacea, 22 percent of companies surveyed said they had been attacked by a fake account-creation bot. This number is higher — 27 percent — in the financial services industry. Of companies that detected an automated attack by a bot, 99 percent saw an increase in the number of attacks in 2022 over 2021.
Here are some tips for protecting you and your company from scams:
- Many companies in the financial industry are fighting gen AI-fueled fraud by generating their own gen AI models. For example, Mastercard recently built a new AI model to help detect scam transactions by identifying “mule accounts” that criminals use to move stolen funds.
- Have specific procedures in place for transferring money, and require everyone in your organization to follow them carefully. For example, if your usual method for handling money-transfer requests is to use an invoicing platform rather than email or Slack, find another way to contact people and verify details.
Scams on peer-to-peer apps like PayPal, Venmo and Zelle
About 76 percent of Americans use a peer-to-peer (P2P) app, such as PayPal, Venmo or Zelle, at least once a week. While they are convenient and easy to use, these apps are especially susceptible to scammers because it is typically a user’s responsibility to make sure that transactions are legitimate.
Research shows that 68 percent of P2P payment users experienced some type of attempted (or successful) scamming activity while using the apps in 2023. That’s up from 42 percent of users in 2021. The most common type of scam involves fake prize winnings. In general, if it sounds too good to be true, it is! If you receive an email saying you’ve won a valuable prize, check it out before sending anyone any of your information.
P2P app users noticed attempted scams most often on PayPal, followed by CashApp. Very few users saw scam attempts on Apple Pay.
Here are some ways to protect your money against P2P-related scams:
- Use phone numbers, email addresses, or QR codes to verify a recipient’s identity before you send money.
- Activate all identity verification options that are available to you in an app. The recipient of any money transfers must go through various extra steps to pass security protocols.
- When paying a new recipient for the first time, send a $1 test payment and confirm the correct person received it. This step is even more critical when transferring large amounts of money.
- Move the money you receive in your P2P app to your bank quickly so that the Federal Deposit Insurance Corporation (FDIC) insurance kicks in.
Scams targeting older people
The FBI reported that in 2023, scammers stole more than $3.4 billion from older Americans. Technical-support scams were the most commonly reported type of fraud among older adults last year. In these schemes, criminals pretend to be technical or customer-service representatives offering assistance.
Another type of scam that’s surfacing more often is one in which cybercriminals pretend to be technology, banking or government officials and try to convince victims that their bank accounts have been infiltrated by foreign hackers. The scammers then instruct the victims to move their money to a new account, which they control.
Here are some tips for avoiding these scams:
- Never click on a link or attachment in an email from an unfamiliar source. Call any banks or credit card accounts, or long on to your account, to find out if the company is trying to contact you. “Check it before you click it.”
- Never provide personal or financial information to someone you don’t know, especially if you did not initiate the conversation.
- Be suspicious instantly if the email asks you to provide a prepaid card, make a wire transfer or mail cash overnight.
- Keep in mind that banks, financial institutions and government or law enforcement officials will never demand payments from you or call you to tell you that you are under investigation. Legitimate actions of this type, according to the FBI, will arrive in the form of an official letter or in person.
Additional scam-prevention tips
Regardless of the type of scam you might be exposed to, you can take steps to protect yourself and your money. Here are some additional tips for keeping your accounts and identity safe.
- Instead of using just a password to enter accounts, use multifactor authentication (MFA) on sites that offer it. The extra levels of security do more to protect your information.
- The sooner you realize your information might have been compromised, the quicker you can take action to try to avoid theft. Monitor your accounts regularly. Check your bank and credit card accounts as often as possible. Review all transactions to make sure you made or authorized them. If you did not, contact the institution immediately.
- Change your passwords on sensitive accounts often, avoid using the same password for multiple accounts.
- When shopping online, always make sure you are using a secure internet connection, and avoid using public Wi-Fi.
- Check your credit reports from Equifax, Experian and TransUnion at least once a year. Make sure all your information is current and accurate, and make sure no one has opened, or attempted to open, new accounts in your name. You can access your free report each year from AnnualCreditReport.com, but beware of lookalike sites that charge unnecessary fees.
- Make sure all your computers, smartphones and tablets are equipped with up-to-date security software and firewalls. Regularly download updates to your operating system and applications to patch any security vulnerabilities.
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Sometimes, even our best efforts aren’t enough to keep scammers at bay. If you think any of your financial accounts or other information has been compromised, contact your financial advisor right away. You can also contact the AARP Fraud Helpline at 877-908-3360 and use the FTC online fraud reporting tool.
Any opinions are those of the author and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
