While fraudsters are becoming increasingly savvy, you can learn what to look out for and avoid the latest scams by understanding common scam and fraud terms. Scammers want to catch you off guard and pressure you to make hasty decisions, so informing yourself is a crucial way to stay one step ahead of their tactics.
Confused about the difference between phishing and smishing? Not sure what a money transfer is and why it matters? Read on.
Common Scam and Fraud Terms
- Call spoofing: Call spoofing, also called neighbor spoofing, is when a fraudster falsifies the information that shows up on your phone's caller ID. A scammer could use this tactic to more convincingly pass themselves off as someone you might know or as the Social Security Administration or some other government agency.
- Data breach: A data breach is when an unauthorized person accesses a company's confidential, protected data to view, copy, transmit or expose the sensitive information. Full names, dates of birth and Social Security numbers are types of information commonly stolen in data breaches.
- Hacker: In the world of scamming and fraud, a hacker is someone who gains access to your computer, phone, tablet or other device to access your personal information. A malicious hacker might use your information to commit identity theft, gain access to your accounts or steal your bank information and money.
- Identity theft: Identity theft is the crime of stealing another person's personal information, such as their Social Security number, and then using it without their permission. Thieves may use the information they steal for various types of fraud, such as applying for credit in someone else's name, filing a fraudulent tax return, stealing a victim's savings or selling data to other fraudsters.
- Mail fraud: Mail fraud is a crime in which a fraudster mails documents to perpetrate a scam, such as a fake notice of a sweepstakes prize. The scammer's goal is to steal information or money.
- Phishing: Phishing is a crime in which scammers attempt to manipulate a victim into disclosing personal information such as a Social Security number, bank number or password. Phishers commonly target people via email, phone calls and texts.
- Robocall: Robocalls are recorded messages which try to impersonate a human caller and are commonly used in phishing scams.
- Skimming: Skimming is when a scammer steals credit card information using a device called a skimmer, which thieves attach to card readers at ATMs, gas pumps and other points of sale to read the information in a card's magnetic strip. When scammers similarly pilfer the information in a card's EMV chip, the theft is called shimming.
- Smishing: Smishing is phishing that takes place via text message, also called SMS. Because fraudsters can spoof phone numbers, smishing scams can be convincing and may appear to come from trustworthy senders. In fact, the fraudster may be after your personal information or could try sending you a virus.
- Spyware: Spyware is malicious software that collects information about a user's computer activity without their knowledge. Scammers can use spyware to spy on a user's keystrokes and use the data they capture to commit identity theft.
- Malware: Malware is a digital security threat that infects your computer, phone or tablet and adds malicious code to take it over or relay information back to the hacker that implemented it. Scammers typically use malware to steal information.
- Wire or money transfer: Scammers often try to convince their targets to send money via a wire or money transfer because it's difficult to trace and almost impossible to get back. Consider any request for payment via this method a red flag, and don't wire money to anyone you don't know.
How to Protect Yourself From Scams
While it's true that phishers use increasingly sophisticated techniques to steal information, it's also true that you can avoid many of their attempts if you know what to look out for. Here's how to protect yourself from identity theft and reduce the risk of being targeted.
Guard Your Personal Information
Immediate requests for money transfers or for your Social Security number are a sure indication that you're dealing with a scammer. Avoid phishing scams by safeguarding your sensitive information.
Don't give out your Social Security number or bank account number to anyone who calls and asks you for it. A legitimate banker or government official won't call and request this information. If someone you think is official calls and asks you for identifying information, hang up and call back using the number listed on the organization's official website.
Set Up Strong, Unique Passwords
Using the same password across your devices and financial accounts places you at a higher risk of losing your key information to a fraudster.
Instead, use unique and complex passwords with a combination of letters and numbers. Using a password manager can be an easy way to securely keep track of your passwords.
Review Your Credit Reports Regularly
Make it part of your routine to regularly check your credit reports for discrepancies. You can get free copies of your credit reports from all three major consumer credit bureaus at AnnualCreditReport.com. You can check your Experian credit report and credit score for free through Experian.
If you encounter information you believe may be the result of fraud, dispute the information with the appropriate credit bureau right away.
Handle Sensitive Mail Responsibly
Check your mail every day and bring all letters inside to help prevent mail theft. Shred anything with personally identifying information on it before tossing it, and store documents you intend to keep in a secure place.
You can also opt out of credit offers and choose to receive electronic statements from your utility companies and credit issuers to limit the amount of sensitive mail you receive.
The Bottom Line
Scammers thrive on surprise—an alarming phone call, a confusing message, a threatening letter, a malicious link in an innocuous email. If you know what to expect and stay up to date on the tactics of scammers, you'll be much harder to target.
If you're worried a scammer has accessed your information, you can place a fraud alert on your credit reports. The alert asks lenders to confirm your identity before issuing you any new credit. If you've repeatedly been victimized by scammers, you might consider securing your credit with a credit freeze, which blocks access to your credit history.
Lastly, report any attempts at phishing using the Federal Trade Commission's official reporting site to help law enforcement track and prevent identity theft.