Fraud Prevention 101: How To Stay Safe From Scammers

A little bit of research tells you some damning statistics about personal fraud and how bad we are at preventing it. Approximately 30% of Americans are scammed each year, leading to an average loss of $1,600 per victim. That might not seem like a huge amount of money, but it’s a month’s rent for some people or a mortgage payment that might be missed. It’s also the average, which means you could lose way more than that. 

Things look like they’re getting worse, as well. Scammers are smarter than ever, and there are loads of new ways for them to try and steal your money. Becoming the victim of fraud is never easy – and it genuinely might be life-changing for some people. One wrong move could be all it takes to lose all of your savings. 

Even worse, it’s not always possible to recover money after fraud. Many of the culprits get away with it because it’s either too hard to trace them, or they sneakily make it look like it was your negligence rather than a scam. Prevention is key – so let’s look at some of the best ways to avoid fraud at all costs. 

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Choose Secure Payment Options For Big Purchases

Fraud happens when you least expect it. Sometimes, it’s obvious; a scammer blatantly tries to get money from you via an elaborate email. Most of the time, it happens behind the scenes without you knowing it’s going on. Scammers will monitor online transactions and try to sneak a peek at your information all the time. You could pay for something expensive – like a holiday or a new kitchen – and a scammer is lurking behind the scenes trying to get your bank details. 

How on earth can you prevent something like this? It’s the hardest type of fraud to stop, but it is possible when you use secure payment options. Most likely, this will involve either of the following: 

• Credit card payments
• Cryptocurrency

The former gives you protection through something called “purchase protection.” It’s an option many credit card providers give you, and it means you can get a full refund if a transaction goes awry. For example, you’re paying for something, but a hacker hijacks the transaction and steals the money. In this case, your credit card provider can refund you the full amount. 

Cryptocurrency payments are less mainstream yet arguably the most secure way of doing things. This is because all payments go through the blockchain and are easy to track using things like a base block explorer. You can view transactions and confirm they’ve been sent to the right place. If they haven’t, you can also track where the money is traveling, which makes it harder for someone to commit fraud. 

Create Stronger Passwords for Your Accounts

Modern fraud is common because it’s so easy for people to commit. You don’t have to be a genius to log into someone’s bank account if their password is “password.” That’s an extreme example – and most banks will force you to have a stronger password anyway. But it’s just as bad if someone hacks into any of your online accounts. Someone could log into your Instagram account, which then opens the door to gain access to your emails and so on. 

Fraud prevention is sometimes as simple as using stronger passwords for everything. Try the “suggest password” feature in many web browsers; this gives you a far more secure passcode that’s almost impossible for someone to guess. Make a note of your complex passwords in a physical notebook; it’s harder for someone to hack, and you’ll never forget your passwords. 

A strong password creates a large barrier for someone to get through, reducing the chances of personal finance fraud. It’s also wise to combine this with two-factor authentication – for those unaware, 2FA forces you to do something else after typing in your password before you gain access to an account. Common examples include: 

• Typing in a code sent via email or SMS
• Providing an answer to a security question
• Using facial or fingerprint recognition

It’s basically a failsafe in case someone manages to hack your password. They get past the first barrier, but it’s highly unlikely they’ll get past the second. 

Keep Your Personal Info Under Wraps

Staying on this particular sub-topic, you need to protect your personal information and passwords from prying eyes. Thankfully, modern web browsers use enough security to keep most of your details safe. In a cruel twist of irony, someone is only likely to get these details if you hand them over. 

Never do this! Do NOT give someone your username or password if they ask for it online. It’s one of the most blatant scams on the internet. If you’re ever in a situation where this happens, ask the person/company why they need your information. You could also contact the company via a different method to confirm if you should send your details. 

Hold onto your personal details for dear life – they’re like a financial key that could unlock a whole world of fraud and pain. 

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Be Aware Of The Latest Phishing Scams

Let’s keep the ball rolling and discuss phishing scams. They happen every day, and some are much smarter than others. A phishing scam is effectively what we just discussed: Someone phishes for your information and tries to get you to hand it over. They’re wildly common in modern times because we all have dozens of accounts with different companies. Phishing scammers will pose as one of these companies and claim there’s a problem with your account. A very popular scam is one where your bank or credit card provider emails or texts you about a transaction. They ask if you want to approve it, which forces you to click a link. Unfortunately, the link either takes you to a fake form where you hand over your details or it automatically puts a virus on your computer to steal information. 

Awareness is the best (and only) way to combat phishing scams. 

If you know how to spot a scam, then you’re not going to click on anything. Thankfully, you will find countless resources listing the latest phishing scams to be aware of at any given moment. Be aware of them so you know what to avoid. 

Always Monitor Your Statements

The worst scams are long-term ones that happen behind your back. They’re the smartest scams because you don’t pay attention to them, which enables the scammer to drain money from your finances slowly. It could only be $20 a month, but it happens for years! 

This type of fraud usually revolves around identity theft. Someone manages to get your information and uses your bank account to pay for things – maybe they make you pay for Netflix, or perhaps they set up monthly payments to their bank account but make it seem like another subscription. 

Always monitor bank statements to prevent issues like this. Go through all of your payments to be 100% sure everything is as it seems. If you spot a name or a company that looks out of place, Google it. See if it’s a legit expense – if it isn’t, flag the payment with your bank/credit card provider and get their fraud detection team to look into things. 

Stay Away From “Get Rich Quick” Scams

Let’s be truthful for a moment; every single one of us wants to make money. It’s completely normal, but you’re always looking for ways to make money from different situations. You want simple ideas that generate passive income and give you more money to save or spend. 

Unfortunately, scammers are also aware of this. 

It leads to a host of new “scams” where people promise to help you get rich quickly. Well, they’re not entirely “new” – they tend to be variations of classic Ponzi schemes and other scams. Investment opportunities are probably the most common nowadays. Someone will run an investment course where they help you invest money and earn passive income. It looks legit, and they claim to have made loads of money doing this for years. In reality, they invest your money and “lose” it. 

What they’re actually doing is pocketing your money and taking advantage of it. The worst thing about these scams is that the people are annoyingly clever. They usually create massive Terms & Conditions documents to cover their tracks and demonstrate to the authorities that this was always a “risk,” and they never “guaranteed” that you’d make money. 

It’s all very tricky and conniving; the best advice is to avoid listening to anyone who claims they’ll help you make a lot of money with minimal effort. Don’t sign up for any schemes or courses that sound like this; you’ll just get scammed. 

After reading through this guide, you’ll notice that fraud prevention isn’t as difficult as it seems. It’s mostly about staying knowledgeable and being a bit more vigilant when you buy things online. Focus on upgrading your passwords for more security, stay away from suspicious emails or texts, and use secure payments to protect your money and avoid financial fraud for good.