Financial scams: what are they, what types and how to prevent?

Financial scams: what are they, what types and how to prevent?

Table of Contents

Did you receive a message with offers of very cheap products, offer of gifts, invitations to events requesting codes sent to the cell phone, sale of cars in a doubtful way, friends asking for financial help through whatsapp? Watch out! You may be about to become a victim of financial scams.

The crisis generated by the coronavirus pandemic has further intensified fraud attempts. According to the UK residents Federation of Banks (Febraban), the country has experienced a 44% increase in scams that use the names of banks or financial institutions to steal data and move money from potential victims.

In the face of a crisis and so many fake news available on the internet, it is essential to redouble care. You must know the logic behind these financial scams and how to avoid them.

In this post you will see:

  • What financial scams are and how they work;
  • What are the most common types of scams;
  • How not to fall into financial scams;
  • What to do when you fall into one.

What is it and how do financial scams work?

Financial scam is one of the most common crimes committed today. It involves lying or hiding information for the purpose of deceiving someone, whether an individual or a company.

This type of fraud is usually related to financial issues, but it can also be identity theft or documents.

The criminal acts with a view to obtaining personal gains from other people. To do this, he creates strategies that draw the attention of the victims and, thus, hook them to the coup.

In the financial world, scams are often well designed for the victim to build trust and do what the criminal wants. So it is common for these scams to involve false promises of quick cash returns or outrageous discounts.

In general, this type of scam can exist in the form of hiring a service, in a sale offer and even through a fraud, with identity theft and sensitive information from the person.

What are the most common types of scams?

If you have never fallen into any kind of financial scam, you probably know someone who has been through it. That's because criminals are increasingly creative and have more ways to put their strategies into action.

According to a recent survey by National Confederation of Shopkeepers (CNDL) It's from Credit Protection Service (SPC), more than 12 million UK citizens have suffered a financial blow over the internet in recent years. This represented a loss of almost R $ 2 billion in fraud alone.

Therefore, it is essential to know the most common scams to avoid falling into any of them. Check it out below:

1. Phishing scam

Phishing is a scam model applied, usually, through emails, social networks and websites. Its English name comes from the word fishing, as it defines exactly how criminals act.

They lure victims through false information, causing them to hand over their information or download malware-contaminated content.

To hook victims, criminals use messages promising to increase their credit card limit, request that the person click on a link to confirm passwords, among other situations.

Another great example of phishing is through fake websites. Criminals place fake ads at very attractive discounts. Thus, the moment the person clicks, he lands on a website very similar to the real store, not realizing the scam. Then fill in your details and make purchases of products that will never arrive.

2. By phone

One of the most common scams over the phone is when a person impersonates a person's bank representative or some other service, such as NET. Usually, in these cases, confirmation of the customer's personal data is requested.

Immediately, it is difficult to realize that this is a financial scam, as it seems to be a simple thing to just confirm some information, isn't it? However, the scammer has little information about the victim and goes around the phone until the person reveals important data.

Criminals often offer additional services and convince people to make transfers via PIX. Do you already know how this payment method works? Take a look at this text here to know more.

For this reason, Febraban warns that customers' personal data are never actively requested by financial institutions, nor do bank employees call customers to do tests with Pix. You have to be suspicious at the time of this type of connection.

3. Via Whatsapp

The cloning of Whatsapp has been a very popular scam during the pandemic. It happens through a message sent by the application by a company in which the victim is registered.

The criminal requests a security code already sent by SMS, stating that it is a registration update, the from there, he manages to replicate the person's account.

After replicating the account, the scammer sends messages through the app, pretending to be the owner of the number, and asking for financial help from contacts via bank transfer to settle debts.

Another way to carry out a coup by Whatsapp is when the criminal chooses a victim, usually on social networks, takes a photo of her and creates a new account in the app and, somehow, manages to discover cell phone numbers from her contact list.

After that, the bandit sends messages claiming to have changed numbers and scam happens in the same way, asking for transfers by PIX for some emergency situation.

4. Loans

A very old scam that still causes many victims is the loan scam. Criminals make promises of extremely low interest rates, especially to negative customers who are generally unable to release credit easily.

After drawing the victim's attention and convincing him to apply for a loan, the scammers ask in advance for an advance payment to complete the request. This is one of the main signs to detect this type of financial transfer scam.

Therefore, it is necessary for the person to carry out a careful research to find out if the company offering the loan really exists, what its reputation is, among other important information.

To make sure it’s not a scam, you can conduct a more in-depth consultation at website IRS to assess whether the company is active, by entering the CNPJ in the field indicated. In addition, it is possible to consult a list of all organizations that can provide this type of service in the Banco Centra websitel.

5. By credit card

Credit card financial scams can happen through cloning, purchases from fake websites, card exchange, duplicate purchases, among others.

Most of the time, it also happens when the victim is manipulated to pass on confidential information or uses a questionable electronic device (in the case of cloning). That way, the data is stolen without you noticing and used to make improper purchases.

Other financial scams that circulate on the internet and deserve care are:

  • income tax summons, to update registration data;
  • fake products, such as kits for women, on international women's day;
  • false job scam: collects information with the promise of a job that does not exist;
  • exemption from IPVA;
  • coup of the 14th salary in the Caixa.

How not to fall into financial scams?

For you to be able to identify a fraud and avoid financial scams, check out the tips below.

Be wary of everything

It seems radical, but when it comes to making a financial transaction through the internet or telephone, it is necessary to act with caution, especially when the values ​​are very low and attractive.

For this reason, you should give preference to companies that already know the credibility and instead of suspicious sites with values ​​much lower than those of all other competitors.

In cases of connection with exclusive opportunities, be wary too. Try to ask the seller questions about how he got his data and why you were chosen.

In general, be on the lookout for malicious messages that promise good opportunities, but that basically just want to steal your money.

Research before closing deal

Another key step is not to close a deal right away. First, you should research the experience of other users, the organization's return policies, other important information that can prevent fraud.

The portal Complain here it is an excellent ally to know the reputation and conduct of companies.

Analysis and compare values

When it comes to investments, you will be able to detect financial scams quickly if you stop to do the calculations and analyze the values. We know that no money comes easy, doesn't it?

So, by means of basic accounts and comparison with other types of investments, it is possible to identify that that is a bore.

Be wary of emails asking for passwords

No financial institution sends e-mails (nor does it call) to customers requesting their credit card password or security code. This is personal and non-transferable information and should not be informed or entered on the phone.

Falls in a blow, what to do?

Even if the person is very careful, there is a risk of falling into financial scams. Therefore, you must also know how to act in this situation so that the losses are as small as possible.

Make the report

The moment you identify that you are being hit by a fraud it is important to make a report in case of bank account fraud, credit cards used by third parties, withdrawals of emergency assistance, among other situations.

Contact the financial institution

Then contact the financial institution, in cases such as cloned card and improper withdrawals, it can block your account and card, preventing criminals from taking action again.

Warn people nearby

For cases like the cloned Whatsapp, tell all your friends and relatives not to carry out any kind of transfer on your behalf. This will prevent people close to you from also losing money.

In addition, you can make a anonymous reporting to official bodies when faced with scams and financial scams.

Unfortunately, most of the time it is not possible to recover the money that has already been paid in financial scams. The best way to act is through prevention, so always be attentive before making any transactions.

Did you find this article important? Share on your social networks so that your colleagues also know how to prevent a financial scam.



Leave a Replay

Why HR Consultants UK!

HR Consultant UK Offers HR advice for local businesses in the UK. Our HR Consultants Near Me Page will help you get in contact with local HR Consultancy.

Alternatively, view our list of cities covered by HR experts.  Its time to get all your HR issues solved! 

Enjoy the Blog!

Recent Posts

Follow Us

Sign up for our Newsletter

Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit

Empower Your HR. Reach Out for Expert Guidance Today!

We can help you!