Common Financial Scams and How to Avoid Them

Thieves are everywhere, and that’s an unfortunate truth that everyone has to accept in order to stay safe. When it comes to your money, you have to adopt a very defensive attitude if you want to keep things in check, and it can sometimes seem quite challenging to ensure that things are in order if you don’t have a good overview of how the financial market is structured, or what the common types of scams are. There are many of them to keep track of, and you will probably not be able to keep them all in check – but you can still do a lot to familiarize yourself with the most basic problems that you can come across.


Phishing is perhaps the most common problem you’ll encounter in the wild. In fact, if you open your e-mail’s “Spam” folder, you’ll probably see lots of messages that have been identified as such. The basic idea is to get you to give up some of your information by fooling you into thinking that you’re entering it in a legitimate website. For example, you might receive an e-mail claiming to be from your bank, alerting you of a problem with your account. The message would have a link that you can follow to address the problem, but what you don’t realize is that you’re entering your credentials in a website owned and controlled by thieves. In the end, they get full access to your bank account, and you won’t even realize that anything had happened until it’s too late.

Investment E-mails

There’s a lot of opportunity to be realized in the investment market right now. Many thieves realize this, and they’ve made this a central point for some of their attacks. You may often receive e-mails with alluring investment proposals, some of which may even seem quite legitimate. Make no mistake though – unless you specifically requested these kinds of offers from someone, none of them are going to lead to anything productive for you. They will just leave you without a good chunk of your cash, and once again, you may not even figure out that anything wrong had gone down until it’s quite late.

Fake Tax Audit Calls

Some thieves will try to prey on a sense of urgency. A common trick is to call you pretending to be from the HMRC or a similar institution, telling you that you’re going to be audited for tax evasion, unless you pay a fine to prevent the audit from happening. There are multiple red flags in this scenario – the most obvious one being that tax authorities are never going to look the other way just because you’ve paid a “fine”. That’s the definition of a bribe! Plus, they’ll never contact you by phone to alert you of any issues with your accounts. You’ll always get a written letter explaining the issue in detail, and providing you with contact information for people who can assist you.

Preying on Urgency

This can be extended to many other types of attacks too. It’s a common trick that lies in the heart of many types of financial scams. Another common example is to tell you that you can get an attractive return on your investment if you put some money into a scheme, but you have very little time to make your decision. Usually, the time provided will be far too short to do any adequate research on the people who’ve contacted you, which is exactly their point in the first place.

It’s Not Always About Your Money

They say that information is the new currency of this age, and that’s not far from the truth. Your personal details can often be much more valuable than the contents of your bank account, because they can be used to obtain even more money in illegitimate ways. Have you taken out any loans recently? Many people use them to bridge gaps in their finances. But getting hit by a collections letter for a large sum of money that you’ve never borrowed in the first place can be a very nasty experience. And it’s exactly what can happen if you’re not careful about protecting your personal information.

Fake Cheques

You’d think that people will have wised up to the common scams around cheques these days, but that’s not quite the case. Even in countries where they’re not commonly used, you can typically find lots of people attempting these kinds of scams. It’s a common occurrence when buying something from a stranger online, for example. You’d get a cheque for significantly more money than you agreed upon, and the person will tell you that it’s a mistake, and to please wire them back the difference. The caveat is that the cheque is fake, which you’ll only find out in a few days/weeks once it bounces properly. By that time, the thief will have their money and will be nowhere to be found.

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