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The Biggest Money Scams in the US

By Constance Brinkley-Badgett · January 03, 2022 · 9 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

The Biggest Money Scams in the US

Scammers have been around forever, and the only thing that changes from year to year, it seems, is the technology they use to pull off their scams. While many of these con artists still use the phone, the mail or even in-person tactics to try to part you from your hard-earned money, most scams these days are pulled off digitally — reaching you through your email, text messages and fake websites.

According to the Better Business Bureau , nearly 75 percent of consumers lost money to a purchase scam in the first eight months of 2021. And the amount consumers lose every year continues to rise — from an average of $76 in 2019 to $102 in 2021.

To help folks battle these scammers, we’ve rounded up some of the biggest, most common scams hitting American consumers this year with tips to help you avoid them and a guide on how to report scams if you do become a victim.

According to the Federal Trade Commission, some of the most common bank scams include:

Overpayment Scams

Many con artists try to get between you and your dollars by tricking you into sending them funds directly. Scammers typically start off by sending you a fake check in the mail, but because they’ve sent you “too much” money, they reach out instructing you to deposit the full check into your bank account and send the overpaid portion back to them via check or wire transfer. As a rule of thumb, you should contact your bank before depositing checks from anyone you don’t recognize.

Automatic Bank Withdrawals

In this scam, a company sets up automatic withdrawals from your bank account in order for you to “qualify” for a free trial or to collect a prize. Some companies will also legitimately charge you for a purchase, but will continue charging you each month because your purchase signed you up for some obscure product or service that requires monthly billing. Consider protecting your banking information by using a credit card instead. Unauthorized charges are easier to dispute, and you don’t provide anyone with direct access to your money.

Charity Scams

It’s hard to imagine a worse scam than stealing money in the name of people in need, but it’s a tried-and-true grift we should all be on the lookout for, especially around the holidays or after emergencies/natural disasters. Scammers pose as a real charity (or one that sounds real) and call, mail or email asking that you help with some recent tragedy. Instead of making a donation pledge right then and there, it’s smart to tell them you’ll contact them through the organization’s official website or phone number noted there.

Grandparent Scams

Also popular around the holidays are “grandparent scams” where scammers call older adults pretending to be a grandchild or other relative. They claim they are in trouble and need help, often asking that you wire them money or send them a gift card so they’ll have the cash they need. If this happens to you, it’s smart to tell the caller you need to call them back. That will allow you to contact your relative directly to confirm if the request was real or fake.

Read more about other ways to protect older adults from fraud and financial exploitation .

Imposter Scams

A cross between charity and grandparent scams, imposter scams typically work something like this: A caller tries to persuade you to give money to their organization or government agency (think police and firefighter funds). As they’re often able to fake their caller ID, the grift may seem legitimate. Instead of contributing over the phone, it’s a good idea to directly contact the organization the person claims to be associated with and make a donation that way if you’re so inclined. You can read more about imposter scams .

Debt Collection Scams

Dealing with legitimate debt collectors can already be stressful, but there are guidelines they must adhere to which can make identifying a scammer easier. An overly aggressive “debt collector” may be a scammer in disguise. These warning signs can help you further recognize if you’re being targeted, and these sample letters can be used to request more information if you’re still questioning the legitimacy of someone contacting you about a debt.

Unclaimed Money Scams

It’s estimated that more than $40 billion in unclaimed money is out there waiting to be claimed by its rightful owners, mostly languishing with state governments. Some companies may offer to help you find and recover unclaimed money for a percentage of the found funds. Paying these fees is pointless, since you can search for unclaimed property and reclaim it for free (or perhaps for a small processing fee) on official databases.

Foreclosure Relief or Mortgage Modification Scams

For people who are behind on their mortgage payments, this can be a truly frightening scam. These con artists often offer to save you from foreclosure, but they require upfront fees for their “services,” such as loan modification. Sometimes they’ll even ask for you to sign over the title or rights to your property on paperwork you don’t understand. If you’re contacted with mortgage promises that sound too good to be true, it’s a good idea to contact a HUD-approved housing counselor who can help you avoid scams and review your actual payment options.

Mortgage Closing Scams

These scams target homebuyers whose mortgage closing date is approaching. They attempt to separate the homebuyer from their down payment and/or closing costs by pretending to be a realtor, title company, escrow company or other mortgage-related company or entity.

Like with so many other scams, it’s important to communicate directly with people and companies you already know who can verify if these information requests are legitimate. The Consumer Financial Protection Bureau has put together some helpful information to help you protect your closing funds .

Mail Fraud

If you ever receive a letter asking you for money or personal information in order to receive a prize from a lottery or sweepstakes, or in order to claim an offer of a high value item like a car or a vacation, it could be a scam. The U.S. Postal Service has identified common postal or mail fraud schemes to help you avoid some of the most common ones.

Romance Scams

Targeting the heartbroken is another tried-and-true con that scam artists just love. Typically, the scammer tries to trick you into being romantically interested in them so they can ask you for money or get you to share personal information like credit card numbers, bank account details and even your Social Security number. These romances can lead to financial ruin so stay alert and don’t send money or gifts to a love interest that you haven’t met in person.

How to Report a Scam

If you think you’ve been a victim of a scam, you can report it by:

•   Submitting an online complaint with the Federal Trade Commission

•   Contacting your local police department or sheriff’s office

•   Reporting it to your state’s attorney general

How to Protect Yourself From Scams

Though scams abound, you’re not completely vulnerable. There are plenty of things you can do to help protect yourself against scams and scammers. Here are some of our favorites:

Using Credit Cards & Payment Apps

In general, credit cards can offer significantly better fraud protections than debit cards, which are directly connected to your bank account. Plus, a lot of credit cards also offer additional services like purchase protection, price protection and extended warranties.

Mobile apps (think Apple Pay and Google Pay, but also SoFi Money) offer advanced technologies, like fingerprint authentication and “tokenization” (credit card account numbers are replaced by randomly generated numbers) to provide added layers of security. Similarly, virtual credit cards similarly allow online shoppers to mask their financial accounts.

Checking Bank & Credit Card Statements

No matter how you prefer to pay for purchases, checking your bank and credit card statements regularly for suspicious or erroneous charges can help you spot fraudulent activity right away. You may want to do this daily during periods of high usage, like around the holidays when it’s easier for fraudulent charges to slip through.

Activating Transaction Alerts

Many banks and other financial institutions offer free transaction alerts each time a new change hits your account. Like reviewing your statements, these alerts can help you spot suspicious activity right away.

Being Proactive

If you do spot something unusual when reviewing statements or alerts, it’s a good idea to contact your financial institution right away. You’ll be able to immediately cancel your compromised card(s) and get replacements so you can get on with your life and hopefully avoid further issues.

Staying on Alert

If you get a call asking for your payment information or other personal information, it’s smart to just hang up and call the company directly so you can avoid potential fraud.This goes for your address, phone number and especially your Social Security number.

Securing your Devices

Is your smartphone, tablet or laptop password-protected? If not, it can be an important first line of protection against fraud, so it’s definitely something to consider. If you’re unsure how to do it, enlist the help of a trusted friend or relative (but it’s still smart to set your own password that they are not privy to). Also, you may want to keep in mind that browsers like Firefox, Google Chrome and Safari issue updates to protect against scams, so it’s wise to ensure you have the latest version of whatever browser you use. You may also want to consider purchasing antivirus software to keep your computer clean and safe.

Reconsidering Public Wi-Fi

If you like to use your phone for shopping or banking while sitting at your local coffee house and using their Wi-Fi, you may want to reconsider that. Public Wi-Fi networks are well known spots where hackers and scammers steal personal information. That’s why a virtual private network (VPN) can be a smart choice for connecting to the internet when you’re away from home. It’s much harder to pick up information you may transmit than it is over a public network.

Shopping Where You’re Comfortable

Shopping only at reputable and recognized retailers — especially online — can help you avoid some of the fraud headaches abounding out there. If you are concerned about an unfamiliar retailer you want to transact with, consider researching them on the Better Business Bureau website. You can also check out their site state using Google’s Transparency Report tool.

Watching Out for Skimmers

Does that ATM or gas pump look a little weird? It’s not uncommon for scammers to install skimmers in places where consumers swipe their credit and debit cards. These devices snatch your payment information, including PIN codes whenever used. Take a close look at whatever reader you’re using to swipe your card. If it looks suspicious, report it to the establishment.

Avoiding ‘Phishers’

Did you get a weird notice from your bank or pharmacy? How about a text message from AT&T that your phone bill has been paid as a “gift”? It’s possible the unsolicited offer you receive is a “phishing” scheme. Scammers often pose as a legitimate company or website in order to get you to click on a link that either asks for personal info or downloads malware on your device. They can use emails or even texts to try to get you to bite. If it looks fishy, avoid clicking on any links or downloading any attachments.

A Few More Tips

Putting this advice into practice can definitely help keep you safe and your money in your pockets, but it can’t guarantee you won’t become a victim. Here are some additional things to keep in mind that can help boost your overall awareness.

The Basics

Keeping things simple is almost always a good idea, and that’s true of avoiding scams as well. If you’re shopping online, it’s super smart to check that the website url starts with HTTPS instead of just HTTP when you’re checking out. That means it has a Secure Sockets Layer certificate, meaning all your data will be encrypted. On secure sites, you’ll see a little padlock icon in your browser’s address bar.

Bad Reviews

Scam artists really aren’t known for their stellar online reviews, so if a company you’re considering buying from has a bunch of bad reviews (or no reviews at all), you may want to strongly consider taking your business elsewhere.

Words Matter

Is the website you’re considering making a purchase from riddled with misspelled words and grammatical errors? Typos can be a sign of scammers, so if what you’re reading looks a little off, you might want to reconsider purchasing from that site. It’s also good practice to check website urls for little differences (think Bestbyy.com instead of BestBuy.com).

Strength Also Matters

The strength of your password can be very important, but what’s considered “strong?” Passwords that are hard to crack generally have a random mix of letters, numbers and symbols, but long phrases like song lyrics that are easily remembered can also be used. Also, keep in mind that a password used on more than one site actually makes you more vulnerable, so take the time to customize your logins.

Safety in Person

If you’re shopping in a brick-and-mortar store, it’s smart to keep your purse and/or wallet close and secure at all times. This may mean moving your wallet to your inside pocket and wearing your purse strap over your head, especially during the holidays when stores are busier. In fact, traveling light can be the smartest way to ensure you don’t have your purse or wallet stolen. What’s traveling light? Consider carrying just one card with you into the store and leaving your cash and checkbook at home.

The Takeaway

While there will likely always be someone willing to cheat others out of their money, there are obvious ways you can help protect yourself. Staying alert and following your instincts can help, but implementing security measures and keeping some key tips in mind can make it harder for thieves to get at your dollars.

It’s equally important to use financial services that also have implemented top-of-the-line security measures. If you’re looking for one, you may want to consider setting up a SoFi Money account. SoFi Money is a mobile-first cash management that alerts you immediately after finding any suspicious account activity, and allows you to instantly freeze your card at the first site of fraud.

Photo credit: iStock/filadendron


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