“Here at Morgan & Knight, we want to make sure you know everything there is to know in regards to financial scams and fraud. While our primary job is to help recover financial loss for clients who have been scammed or being involved in some kind of fraud, ideally we want to help you avoid these scams in the first place. So be vigilant and knowledgeable.”
-
More scams are emerging virtually every day, so staying vigilant, and remaining safe online, is vital now more than ever before. Here are some of the most common cons and scams in circulation right now to be aware of.
CFD Scams
CFD trading used to be the exclusive province of experienced, high-end traders; now, however, as the markets have become more accessible, many more people are involved in trading these complex instruments.
CFD stands for ‘contract for the difference.’ Trading in CFDs involves the trader taking out a contract speculating on the difference in the valuation of an asset between the time this contract was taken out and its end date. In a nutshell, if the price of the stock rises, the buyer pays the seller. If it falls, the seller pays the buyer.
CFD scams are on the rise, largely because con artists can take the opportunity, with this type of investment, to prey on those new to the markets and who therefore aren’t fully aware of what a risky proposition - and the large amounts of money - that can be lost in a CFD trade. Scammers make the most of the fact that CFDs can be leveraged, meaning that investors can bet more money than they put down.
Therefore, in CFD scams, it’s common practice for an unscrupulous broker to pressure the investor into taking out leveraged positions, essentially making extremely risky investments that they don’t necessarily understand the financial consequences of.
Ponzi Schemes
Ponzi scheme scams have been around for a long time, but they constantly evolve, making it difficult to spot some of the most recent ones. A Ponzi scheme will typically lure initial investors into putting money into a fake enterprise and will even make some small early payouts to convince these investors that everything’s legit. Right now, Ponzi schemes masquerading as opportunities to invest in a crypto enterprise are widespread.
However, the only money coming into the fund is from new investors. Typically, the scammers will pile the pressure on for investors to make higher-value investments with more frequency until suspicions are raised and the money coming into the scheme dries up. At this point, the fake enterprise, along with its website, will disappear - along with the scammers and all the money remaining in the pot.
Social Media Scams
These scams can take a variety of forms. You may see a post on your feed informing you that you’ve won a gift card or other prize. However, if you enter your personal and/or banking details, as the link will ask you to do in order to be sent your winnings, these details will be used by the scammers to commit identity fraud or to raid your account.
Another common scam that uses various social media platforms is the Gossip Scam. In this case, an ad will appear that hints at some fascinating celebrity gossip - and all you need to do to read the full juicy story is click on the link. If you do so, you’ll be taken to a page asking that you download the latest version of Adobe Flash Player to read the article….doing this, though, will download malware onto your device, which the scammers will use to raid all your personal information and gain access to your credit cards, bank, and other accounts.
Stay vigilant, too, regarding the Healthcare Scam that’s also doing the rounds on Facebook and other social platforms. You may be sent a message or see an ad on your feed from a seemingly legit-looking company offering services such as replacing a lost social security card - these ads may even feature the Medicare logo and other details that make them seem entirely credible. However, these companies will charge a significant fee if you try to use their services - when Social Security will, in fact, replace lost cards or issue new ones that include your new married name, for example, free of charge.
Charity Scams
These frauds take advantage of people’s good nature and desire to make a positive difference. You may receive a cold call, an unsolicited email, or see an ad on the internet that seems to be on behalf of a genuine charity or similar organization.
Many people fall foul of these scams and only discover at a later date that they’ve donated money to a completely fabricated concern. These types of scams are particularly prevalent in the holiday season, so stay extra vigilant during these periods.
Warning signs of a charity scam include being pressured to make a donation immediately and/or a request to make your donation by cash, gift card, or wire transfer - these are scammers' favored methods of receiving payment. Also, watch out for a message you receive thanking you for a previous donation that you don’t recall making. This is a commonly used trick to con unsuspecting victims into making further donations.
Key Points
-
Financial and online scams are on the rise and take many forms.
-
Types of imposter scams are the most common cons, and the average victim loses approximately $500 by getting caught up in one.
-
Statistics show that millennials are the age group most likely to fall foul of a scam.
-
Wire transfers are currently the most common form of payment made in a scam case, with over $300 million sent each year using this method.
-
Fraudulent card payments are more likely to be made during the holiday season.
-
Staying aware and being mindful of new types of scams as they arise is one of the best ways of staying safe.
-
-
Lost Money as Part of a Scam? Here’s What You Need to Do Next
If you’ve lost money to an online or financial scam, then you’re not alone. Many victims are left feeling vulnerable, despairing - even ashamed - and don’t believe that there’s anything they can do to get their lost funds back. Due to this, victims often don’t seek help or are reluctant to even talk about what has happened.
However, there may be a way to reclaim your stolen money and get the justice you deserve. Here at Morgan & Knight, we are passionate about helping the victims of financial fraud and work tirelessly on behalf of our clients to track down those that have scammed them and recover the money they’ve lost.
If we take on your case, you’ll be assigned a caseworker who will support you through every step of the process and keep you informed of progress. You can read our reviews and testimonials to give you an idea of the service you can expect from us. Check out the Success Calculator, too, for an estimate of how much we could recoup on your behalf.
If you’ve been the victim of a scam and lost money as a result, then get in touch with us at Morgan & Knight so that we can discuss your case. If we feel it’s a case with a good chance of success, then we’ll take it on and begin working to recover your money and obtain justice on your behalf.
-
How to Avoid Financial and Online Scams
-
Be mindful of new scams as they emerge.
-
Never click on a link in an email or ad unless you are absolutely certain that it’s safe and legitimate.
-
Be wary of what you post online that can be seen by members of the public - especially avoid posting any content that includes personal information.
-
Never divulge your payment card PINs, account passwords, or bank details.
-
Check out charities carefully before donating any money to ensure they’re legit. Have a look at their website to help ascertain this.
-
Never download software from a pop-up window.
-
Create strong passwords for all your online accounts that are difficult to hack. Use a combination of letters, numbers, and special characters, and don’t use the same password for multiple accounts.
-
-
Financial Scams FAQ
What’s a Tax Scam?
This con is where a scammer will phone their mark masquerading as a representative of the IRS. They are likely to be extremely convincing and may demand money for overdue tax payments or ask you to give them personal information to verify your account. Avoid this type of scam by only working with a trusted tax professional.
What about the Family Emergency Scam?
This is a particularly cruel scam that involves con artists contacting the parents or grandparents of a child and telling them their relative is in trouble and needs money wiring urgently.
How much money is lost to internet scams and frauds every year?
Approximately $3 billion is lost to scammers every year operating online, and this number is increasing annually.
Are fake Facebook profiles common?
Much more so than you might think. Over eighty million Facebook profiles are thought to be fake.
Am I more likely to be targeted by scammers during the holiday season?
This is the case for many types of fraud, including Charity Scams and payment card fraud. Last Black Friday, over 25% of shoppers were the victims of online shopping fraud. Many of these cases involved fake or cloned websites.
What should I do if a scammer calls me?
If you receive a phone call, for example, from someone purporting to be from your bank, but you are suspicious (and bear in mind that you should never be asked to divulge your full password or card PINs), then immediately end the call, and inform your bank. It’s also a good idea to block the telephone number used by the scammer.
How should I report a scammer?
As well as letting the bank or business that the scammer was falsely claiming to represent know what’s happened, it’s also recommended that you contact your local police department.
Which country in the world has the most cases of identity theft?
Citizens of the USA are more likely to be victims of identity fraud cases than those of any other country in the world.
Where does the term ‘Ponzi scheme’ originate?
Charles Ponzi, a scammer active in the 1920s, has the dubious honor of giving Ponzi schemes their name when he set up a fraudulent investment scheme focused on the US postal service. He was eventually brought to justice and sentenced to five years in jail.
What are the red flags of a Ponzi scheme?
If you receive a guarantee of consistent, high returns with no (or minimal) risk, then this is your first warning sign. A Ponzi scheme is also likely if investors are promised significant returns regardless of market conditions. If the investment strategies being used to generate these spectacular returns are kept secret or seem deliberately vague, then proceed with great caution, too.
What’s the difference between a Ponzi scheme and a Pyramid scheme?
Most Ponzi schemes will ask for an initial investment with the promise of future high returns, whereas a Pyramid scheme tells its investors they will profit by recruiting other investors into the scheme.
