Guard your finances against common scams with two-factor authentication, phishing recognition, card skimming prevention, and strategies for protecting elderly family members.
Enable two-factor authentication on every financial account
Use an authenticator app that generates time-based codes. Avoid SMS-based two-factor when possible because phone numbers can be hijacked through SIM-swapping, which affected over 68,000 victims in 2023.
Create unique passwords of at least 16 characters for each account
Use a mix of uppercase, lowercase, numbers, and symbols. A 12-character password can be cracked in hours while a 16-character password takes centuries with current technology.
Set up real-time transaction alerts on all accounts
Configure alerts for any transaction over $0 or $1. Most banks allow alerts via text, email, or push notification. Catching a fraudulent charge within 2 hours instead of 2 days limits your exposure.
Review account statements weekly for unauthorized charges
Fraudsters often test stolen card numbers with small charges of $1-5 before making larger purchases. Dispute unauthorized charges within 60 days to maintain your federal consumer protections.
Phishing and Social Engineering
Learn to identify phishing emails and text messages
Watch for urgent language (your account will be closed), misspelled sender domains (bankofarnerica.com), and requests to click links or provide personal information. Legitimate institutions never ask for passwords via email.
Verify requests by contacting the company directly
If you receive a suspicious call or email claiming to be your bank, hang up and call the number on the back of your card or on the company's official website. Never use a phone number provided in the suspicious message.
Never share one-time verification codes with anyone who contacts you
A common scam involves someone calling and asking you to read back a code they just sent to your phone. This code gives them access to your account. No legitimate company will ever ask you to share a verification code.
Be cautious of unsolicited investment or money-making offers
If an investment promises guaranteed returns above 10% per year with no risk, it is almost certainly a scam. Americans lost $4.6 billion to investment fraud in 2023, the highest loss category reported to the FTC.
Card and Payment Security
Check ATMs and payment terminals for skimming devices
Before inserting your card, wiggle the card slot and keypad. Skimmers are overlay devices that feel loose or bulky. Use ATMs inside bank branches rather than standalone machines, which are targeted 10 times more often.
Use contactless payment or mobile wallets when possible
Contactless and mobile wallet payments generate a one-time transaction code, so your actual card number is never shared with the merchant. This eliminates the risk of skimming and data breach exposure.
Use credit cards instead of debit cards for purchases
Federal law limits credit card fraud liability to $50 (most issuers offer $0). Debit card liability can reach $500 if not reported within 2 business days, and the money leaves your checking account immediately.
Set up virtual card numbers for online shopping
Many credit card issuers generate virtual card numbers for online purchases. If the number is compromised, cancel the virtual number without affecting your physical card. Each virtual number can be limited to a specific merchant.
Common Scam Recognition
Know the red flags of common financial scams
Wire transfer requests, gift card payments, pressure to act immediately, threats of arrest, and prizes that require upfront fees are all hallmarks of fraud. Legitimate businesses never request payment by gift card or cryptocurrency.
Be alert to romance and relationship scams
Romance scams cost victims an average of $64,000 each. Red flags include refusing video calls, professing love quickly, and eventually asking for money for emergencies, travel, or business investments.
Watch for impersonation of government agencies
The IRS never calls to demand immediate payment or threaten arrest. The Social Security Administration never suspends your number. Government agencies communicate primarily through official mail, not phone calls or texts.
Report scams to the FTC at ReportFraud.ftc.gov
Even if you did not lose money, reporting helps the FTC track patterns and warn others. Include any phone numbers, emails, websites, and screenshots. Your report is shared with over 3,000 law enforcement agencies.
Protecting Elderly Family Members
Have an open conversation about common scams targeting seniors
Adults over 60 lost $3.4 billion to fraud in 2023. Discuss specific scams like tech support calls, grandchild impersonation, and Medicare fraud without being condescending. Use real examples from news stories.
Set up account alerts on their financial accounts with their permission
Many banks allow trusted contacts who are notified of unusual activity without having account access. Ask about adding a trusted contact designation, which is different from power of attorney or joint ownership.
Help them register on the National Do Not Call Registry
Register at DoNotCall.gov or call 1-888-382-1222. Registration is free and permanent. It reduces legitimate telemarketing calls, making scam calls more obvious when they come through.
Create a verification plan for money requests
Agree on a family code word for verifying urgent money requests. If someone calls claiming to be a grandchild in trouble, the elder asks for the code word. AI voice cloning makes phone voices unreliable as verification.
Frequently Asked Questions
What are the most common financial scams targeting consumers?
Phishing emails and texts impersonating banks lead the list, followed by phone scams from fake IRS or Social Security agents, romance scams on dating apps ($1.3 billion lost in 2022), and investment fraud involving crypto and precious metals schemes. Payment app scams through Zelle, Venmo, and Cash App are growing fastest, with losses exceeding $440 million in 2022. The FBI's IC3 received 800,000+ fraud complaints in 2022 totaling $10.3 billion in losses.
How do I protect elderly parents from financial scams?
Set up account alerts so you receive notifications for transactions above a threshold (many banks allow trusted contact designations under SEC rules since 2018). Have a conversation about common scams without being condescending. Consider a joint account or POA for oversight on larger transactions. Register phone numbers on the Do Not Call list and install call-blocking apps like Nomorobo. Elder financial exploitation costs victims an estimated $28.3 billion annually.
What should I do if I accidentally clicked a phishing link?
Immediately change the password for any account the phishing attempt targeted, starting with your email since password resets route through it. Enable two-factor authentication if not already active. Run a malware scan on your device. Check your bank and credit card statements for unauthorized transactions. If you entered financial information, contact your bank immediately and consider placing a temporary credit freeze.
Are payment apps like Zelle and Venmo safe to use?
The apps themselves use encryption and are technically secure, but transactions are instant and often irreversible, making them a prime target for scams. Unlike credit cards, payment apps offer limited fraud protection for authorized transactions (if you send money to a scammer, the bank may not reimburse you). Only send money to people you know personally, never use payment apps for purchases from strangers, and enable all available security features including PIN and biometric authentication.