October 19, 2023
Written by Timothy Moore
Certified Financial Education Instructor®
Certified Financial Education Instructor®
Timothy Moore, CFEI®, is a personal finance writer and editor. Find his work on Forbes, USA Today, The Penny Hoarder, Business Insider, TIME Magazine, SoFi, and more.
Online and phone scammers continue to evolve their tactics. Learn how to spot the most common scams – and what to do to avoid them.
Money scams have existed for thousands of years. Though scams have evolved with technology, most scammers still use the same tactics: taking advantage of people's trusting nature to get what they want.
To protect yourself from scammers, learn to recognize the signs of a scam before it's too late. In general, it's good to guard your money and personal data. If something feels off, it probably is!
Here are nine of the most common scamming examples today – and how to avoid them.
Phone scams have been around for a while, but they continue to happen at high rates. Many other types of scams on this list involve calls from scam phone numbers.
What does a phone scam look like? A phone scammer may pose as a bank representative, debt collector, government official, police officer, or other authority figure. During the call, they'll use their invented position of power to intimidate you into sending money or handing over personal information, like your Social Security or credit card number.
Similarly, scammers may pose as a business or charity offering freebies or requesting donations.
Scammers also send texts with suspicious links. Clicking those links may take you to a website encouraging you to enter sensitive information to continue.
While memorizing the area codes of common scam phone numbers used to be a viable move,1 scammers can now make any number appear on your caller ID. Instead, don't pick up calls from unknown numbers. Listen to the voicemail (if they leave one), and do your due diligence before calling back.
In general, never share personal information until you can verify that the caller is legitimate. Look up the official business or government department online and call the listed number to verify the validity of the original call.
Tired of scam phone calls? Add your number to the National Do Not Call Registry at www.donotcall.gov or by calling 888-382-1222.
Scammers also send fake emails ("phishing emails") to achieve the same goals as fake phone calls. They may threaten legal action, promise a prize, or request help.
Not only do email scams try to get you to transfer money or divulge personal information, but they may also contain links that will download spyware or malware to your computer.
Some scam emails may fly under the radar, but many include poor grammar, strange greetings, and over-the-top promises or a sense of urgency.
If an email has a suspicious attachment, requests personal info or login credentials, or includes unusual links, mark it as spam. You can always call the company the scammer claims to represent and confirm that the email is fake.
Stay safe out there: Here's how to protect yourself from online scammers.
Rental scams target potential renters with fake ads or fake responses to real ads. The goal is to get you to pay a fee or sign a lease before seeing a property that is not as nice as advertised or that may not exist at all.
Similarly, homebuyers who are approaching the closing date of their new home may receive a phishing email asking them to wire money for closing costs. Homeowners struggling with mortgage payments may receive phony foreclosure relief offers from scammers offering to help – for a small upfront fee.
Avoid housing scams when you're a renter, buyer, or owner:
As a renter, always see the property before signing a lease or paying fees.
As a homebuyer, contact your real estate agent or mortgage broker via phone if you receive any emails regarding payments you weren't expecting.
As a homeowner, ignore any suspicious communications about late mortgage payments. Instead, you can contact a HUD-approved housing counselor to discuss options.
Seller scams can happen in person or online. Given the rise in online marketplaces like Facebook Marketplace, Craigslist, eBay, and even non-reputable online retailers, consumers need to be careful about typing in their credit card information to order a product.
In some cases, the product may be much lower quality than advertised. In others, consumers may pay for a product but then never receive it.
An online shopping spree scam may promise you a free shopping spree – for a small fee. After you hand over your bank information, the scammer can access your account.
When shopping online, avoid websites you don't trust. Read independent reviews of a website if you're unsure.
When shopping on online marketplaces, always use the official contact and payment methods. Be cautious about requests to use mobile payment apps, prepaid cards, or cryptocurrency.
Avoid buying items on online marketplaces that sound too good to be true or have one-day listings.
Debt collectors commonly contact consumers about outstanding debt, but you should receive an official validation notice regarding the debt. Scam debt collectors, on the other hand, might be vague when they contact you, avoiding specific debt information and pressuring you to pay quickly and share personal information.
Always verify the debt before providing personal information or sending money. You can do so by requesting a debt validation letter and insisting that the caller provide you with detailed information.
Scam 101: Learn the difference between fraud and scams – and know what to do when either happens.
If you receive a call or email about a contest you never entered, it's likely a scam.
How does it work? Scammers will tell you that you've won a large prize – but then they'll ask you to make an upfront payment for fees and taxes. The prospect of a life-changing prize might make you give over this information before realizing it's not legitimate.
Don't provide personal information to a stranger over the phone or online. If you've won a prize, make sure you have it in hand (and deposited in your checking account) before paying any fees.
Romance scams can happen in person, but they're more common online. Scammers will pose as a love interest and gain your trust over time before requesting money or access to your bank account.
Always be cautious about people you meet online. Until you've met in person and developed a trusting relationship, avoid sending money or giving away personal information.
In a charity scam, scammers will pose as a legitimate charity (or a made-up charity) and solicit donations. Charity scams are popular during the holidays and in the wake of tragedies and natural disasters.
Request detailed information about the charity, and do your own research online before donating. If you want to donate, look for the charity's donation page on their website rather than sending money to someone over the phone.
Scammers may promise to eliminate your student loan debt or offer to consolidate your federal student loans for an upfront fee. Both are usually student loan scams.
Now that the Biden Administration has announced federal student loan forgiveness, scammers are actively working to con people out of that money.
Be wary of any promises to eliminate student loan debt; this is typically not possible. Instead of fielding offers for student loan debt consolidation, research debt consolidation companies yourself (and never pay a fee upfront).
If you're applying for student loan forgiveness, check that you're on the official Federal Student Aid website. If you're asked to pay a fee or upload financial documents, this is a scam – do not continue!
In 2021, more than 2.8 million consumers filed fraud reports with the Federal Trade Commission. According to FTC data, the most common scams were:
Imposter scams (someone pretending to be someone they're not)
Online shopping scams
Lottery, sweepstakes, and prize scams
Internet services scams
Business and job opportunity scams
A comprehensive scammer list would include several types of scams. It's important to recognize common signs of scams so you can avoid them, no matter the type.
Fraudsters continue to use tried and true scams, like calling or texting you from scam numbers and pretending to be someone they're not. In the wake of COVID-19, however, coronavirus and government program scams are on the rise. Mobile payment scams, SIM swapping scams, and cryptocurrency scams are also increasing.2
Scammers are always trying new methods, so it can be challenging to know when it's happening to you. That said, most types of scams use similar tactics, meaning you can watch for common warning signs, like:
Unsolicited contact via phone, text, or email.
Promises of a lot of money for little effort.
High-pressure sales tactics requiring you to "act now."
Unexpected requests for personal information.
A payment requirement from you before proceeding – often through wire transfer, peer-to-peer payment apps, or gift cards.
When in doubt, if you think you're being scammed, step away from the situation before handing over money or personal information. Do some research before taking next steps.
Scammers manipulate well-intentioned and generally trusting people to hand over their personal information or money willingly. They may make promises of a reward or threats of legal action to convince you to act immediately rather than stop and consider the circumstances. These people commonly use scam phone numbers or suspicious emails to contact you.
Knowing how to spot a scam as it's happening can keep you from handing over money or personal information. Also, teach your loved ones – particularly children and seniors, who are common scam targets – how to spot fraud and scams.
Become an expert scammer spotter with our comprehensive Safety & Security guides.
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