Beware: Scams are on the rise

More than $10 billion was lost to fraud in 2023 by American consumers. The most commonly reported scam was imposter fraud, in which a thief poses as your bank, financial institution, or a government agency to steal your money or identifiable information. Nearly $2.7 billion was reported stolen in 2023 from imposter scams alone.¹ Be aware, this type of fraud is on the rise and the impact can be devastating.

Here’s how the imposter scam may play out: Your phone rings. Caller ID shows that it’s your financial institution on the other end. But it’s not them—it’s a scammer. The fraudsters tell you they have seen fraudulent activity in your account and you need to take action right away.

They tell you that in order to verify your identity, they will send a code for you to read to them. It is actually a code to reset your password so they can steal all your money. Do not ever read or otherwise give a code to anyone unless you have called them on the bank’s or financial institution's official number.

To protect your money and your identity, remember these critical guidelines:

• If you receive a call, text, or email asking you to take action or share personal information, do not respond.
• Instead, hang up the phone or close the email or text, and go to the website of the bank or financial institution and contact them directly.
• Do not provide or "confirm" any of your personally identifying information.
• Never read back a one-time security code (unless you have initiated the service call to a company's official phone number).

If something seems fishy, hit the brakes. Wait until your emotions have settled and research what's going on. Fraudsters use tight deadlines to try to force you into a rash decision. And remember that requests for payment in cryptocurrency, gift cards, or bank wires are red flags for scams.

Here are 5 other common financial scams to avoid—and what to do if you think you're a victim of them.

1. Remote access scam

You may get a call alerting you to a problem with your computer, or a message may pop up on the screen saying your computer is infected with a virus. If you follow the instructions of the caller or the screen message, your computer may be taken hostage and your personal information stolen. You are then asked to pay a fee to restore access to your computer or data.

Protect yourself:

• Do not allow anyone to control your computer remotely and never give passwords and security codes to anyone on the phone. (If you contact a verified and trusted resource for help with your computer, remote access can be helpful—the difference is that you called them.)
• Don't click pop-up ads or attachments from unknown senders. Avoid clicking links in emails. Visit known websites by manually typing the URLs in a browser. Do not call any phone numbers on pop-up warnings, real security warnings will not ask for a phone call.
• Hang up if you get a call requesting remote computer access. No reputable institution will ever call you and ask for this.
• Watch out for callers who ask you to keep the conversation secret—a typical scammer tactic.
• Update your security software and run a scan if you think your computer has a problem. If you’re seeking technical support, go to a company you know and trust.
• Back up your data regularly. That way, you can reboot and regain control of your computer by cleaning your hard drive and reinstalling your operating system.
• Consider taking action to protect your accountsLog In Required if you have accounts with Fidelity, including signing up for multi-factor authentication.
• For accounts outside Fidelity, sign up for the highest levels of security offered.

2. Confidence/romance scams

An individual believes they are in a relationship (family, friendly, or romantic). As a result, they can be persuaded to send money, personal and financial information, or items of value to the perpetrator. This includes the grandparent scam in which someone calls claiming to be your grandchild and asks that you send them money immediately for an emergency, like an accident or arrest, or any scheme where the perpetrator plays on the victim's heartstrings.

Protect yourself:

• Never send money or gifts to a sweetheart you haven’t met in person.
• Be aware of the warning signs: The individual professes love quickly, tries to isolate you from family and friends, asks you for money and/or claims to be working and living far away.
• Take it slowly. Ask questions and look for inconsistent answers.
• Talk to someone you trust about this new love interest. Pay attention if your family or friends are concerned.
• If you are a victim of a romance scam, file a complaint with the FBI’s Internet Crime Complaint Center and call your local FBI field office.

3. Fake charities

You are solicited by email, phone, or in person to contribute to an organization that sounds like a good cause but is actually a scam. Or a friend may share a link on social media. Such schemes may be general in nature, often using a name very similar to a well-known charity, or they may be more targeted, attempting to prey on people who are victims of a war or natural disaster or known to have a personal interest in a particular disease or social cause. These days, charity scams are also being circulated through social media posts on sites like Facebook, Twitter, WhatsApp, and LinkedIn.

Protect yourself:

• Before contributing, research the charity through the Better Business Bureau's (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
• Visit known charity websites by manually typing the URLs in a browser.

4. Social media/investment scams

Personal pictures and posts shared on social media give scammers a buffet of personal information that can be used against you. Romance scams are a big one. Two other schemes recently flagged by the FTC include investment fraud and online shopping fraud. Both offer deals that are too good to be true and they often start on social media.

In online shopping fraud, you may see an ad for an expensive item at bargain basement prices. After the order is placed you may get something you didn't order or you may not receive anything at all.

Investment scams can be harder to spot. Scammers have hacked social media accounts of celebrities to tell people to send cryptocurrency to them with a promise to send double or triple the amount back in return. Similarly, some scammers set up fake websites to convince people that they're investing in cryptocurrency but victims who "invest" are never able to get any of their money back. Additionally, there are fake cryptocurrency apps that may try to imitate real crypto companies. Investment scams can originate from fake ads as well.

Protect yourself:

• Always be skeptical of unsolicited offers to invest.
• Be aware that scammers may try to move the conversation off the original social media platform to another one.
• If something seems too good to be true, it definitely is. Run away from anyone who claims you can make big gains with no risk.
• Verify the source of any emails purporting to be from an investment company. As usual, don't follow links in emails. Instead look up the company and contact them directly.
• Instead of clicking on an ad and following the link, look up the company and go to the site directly.
• If you're considering a company you've never done business with before, do a search on the internet for the company name along with the word scam or complaints.
• If you are a victim of a social media or internet scam, file a complaint with the FBI’s Internet Crime Complaint Center and call your local FBI field office.

5. Tax refund fraud

A criminal, having illegally obtained your Social Security number, files a fraudulent tax return in your name and collects a refund. When you submit your legitimate tax return, it is rejected because the IRS has already processed a return with your Social Security number. In some cases, you may receive a notice prior to filing your return that the IRS has received a suspicious return using your identity.

Protect yourself:

• File your return early, reducing the likelihood that a criminal would have previously filed a fraudulent return.
• If your return is rejected because of a duplicate filing under your Social Security number, submit Form 14039, Identity Theft Affidavit, to the IRS.
• Remember, the IRS will contact you through the US Postal Service, not a phone call.
• Do not return a call from someone claiming to be with the IRS.
• Visit Identity Theft Central for information about tax-related identity theft and data security protection from the IRS. It can make sense to review the identity theft information provided by your state as well.
• Continue to pay your taxes and file your legitimate tax return, although you may have to submit a paper return rather than an electronic one. Attach Form 14039, Identity Theft Affidavit, when filing your return.

Practice good cyber habits

These are just a few of the scams out there, there are many more scams to be aware of. Security measures aren't foolproof, and anyone can suffer a moment of inattention or lapse in judgment. Practicing awareness and taking some basic preventative measures can protect you from the vast majority of attempts to steal your identity or money through fraudulent schemes. Remember to pause and look for red flags before reacting to any unsolicited emails, phone calls, and direct messages on social media asking for money or information—even if they seem to be from someone you trust.

Learn what else you can do to protect yourself. Read Viewpoints on Fidelity.com: 4 tips to protect against identity theft