6 Signs of Financial Fraud

There are dozens of different forms of fraud, and scammers are finding new tricks all the time. So while we do want you to know the common forms of fraud, it's also helpful to know certain red flags. I'm going to talk through five of these that should prompt you to tread more carefully. Let's start with if you didn't make contact first.

Now that's not to say every message or phone call you don't expect is from a scammer, but it should put you on higher alert. One thing to keep in mind is you can't necessarily trust email addresses or phone numbers to determine who someone is. Scammers can do what's called spoofing to make their message or phone call look like it's coming from a legitimate source.

So just because something looks legitimate doesn't necessarily mean that it is. Now second, you might want to be more skeptical if there's an emergency or a prize. Emergencies might sound like having an issue with the IRS or Social Security Administration, a family member being in trouble or having a security issue with your computer. Prizes, on the other hand, are often in the form of lottery or sweepstakes winnings.

Third, scammers will often convey a sense of urgency or that pressure to act now. They don't want you to slow down and think more critically, and they certainly don't want you checking in with a trusted friend or family member. Oftentimes, if you're on the phone, they'll try to make sure you don't hang up. That should cause alarm. Fourth red flag is when there's an ask for personal information or money.

Personal information can be anything about you, your address, birthday account numbers, social security number, username, password. If you have multi-factor authentication, set up an authentication code. All of this information can be used for identity and other forms of fraud and theft. Then lastly, it should raise your suspicions if you're asked to send money, especially if there's a specific form of payment that's requested.

Never send money to get money. And if you're asked to send money through a prepaid gift card or cryptocurrency, or to wire money, or use a payment app like Venmo or Zelle, keep in mind those are forms of payment that are harder, if not impossible to get back. Now, the more red flags like this that you encounter in a given situation, the more caution you should exercise in your interaction.

Scammers are always identifying new and creative ways to access your sensitive information and con you out of your money. In fact, consumers reported losing $12.5 billion to fraud in 2024, a 25% increase over the prior year. Reported losses to investment scams alone grew from $4.6 billion in 2023 to $5.7 billion in 2024.

“The data we’re releasing today shows that scammers’ tactics are constantly evolving,” said Christopher Mufarrige, director of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection. “The FTC is monitoring those trends closely and working hard to protect the American people from fraud.”

So, how can you stay protected?

6 red flags that may indicate you’re being scammed

Reaching out without warning: Be wary when a company or government agency unexpectedly contacts you, either by phone or email. Scammers can do what’s called spoofing to make their call or message look like it’s coming from a legitimate source. Contact the business or agency directly to find out if the contact was legitimate. If it’s not, it’s best to delete the communication.
Pressuring you to take quick action: With time and careful thought, scams are often found out. That’s why scammers pressure you to act immediately. They don’t want you to slow down and think more critically, and they certainly don’t want you checking in with a trusted friend or family member. Take the time to investigate before proceeding.
Sounding the alarm: Scammers will also use scare tactics. They’ll tell you a loved one is in danger or that your computer has been hacked. They’ll make up an emergency related to the IRS or Social Security Administration and tell you to pay immediately or face arrest or financial ruin. Again, it’s best to take a breath and go to the source for verification.
Winning, but there’s a catch: A common part of sweepstakes and lottery scams is to let you know you’ve won a prize, but you must pay a fee in advance to collect it. If you’re asked to provide your bank account information, wire money or purchase gift cards, you’re most likely not a real winner.
Getting way too personal: A good rule of thumb: Do not share personal information — passwords, authentication codes, date of birth, Social Security number, bank account numbers — with a stranger or an unverified source. Scammers will often use your personal information to steal your identity.
Paying, especially in unusual ways: If you’re being pressured to wire money or pay by gift card, you’re probably being scammed. Scammers love gift card payments because they’re readily available, virtually untraceable and easily converted to cash. When you use payment apps or purchase a gift card, you can lose out on the buyer protection offered by other payment options, like your credit card.

Along with knowing what to look for, it helps to be aware of the types of fraud often deployed by scammers.

6 common types of fraud

Romance scams are when someone misrepresents themselves, often online, as a potential romantic partner. As the relationship builds, a financial need will arise, like purchasing a plane ticket or dealing with a medical emergency.
Investment scams involve the scammer tricking you into giving them money by promising big payouts with little to no risk — usually by investing in cryptocurrency, real estate or precious metals and coins.
Tech support scams usually start with a phone call or pop-up box that suggests your computer has an urgent issue. The scammer may impersonate companies like Apple, Microsoft or Norton. They typically ask for payment information to fix the problem.
Imposter scams can vary. They generally start with an unsolicited phone call, email or text. They can pose as someone you’d trust, like a representative of the IRS or the Social Security Administration, or from a company you do business with. They may even pose as a family member. Whoever the imposter, the message will be urgent, and they’ll eventually ask for money or personal information.
Lottery and sweepstakes scams exploit your eagerness to win a fabulous prize. The message in the initial contact is a congratulations, but there’s a catch. You’ll be asked to pay a fee or taxes to claim your big prize. Again, to create urgency, a deadline for responding will be included.
Online shopping scams involve scammers pretending to be legitimate online sellers with a fake website or ad/offer. To combat this, go directly to trusted sites rather than using search. Scammers will buy domains that somebody could possibly mistype to take you to their site. Also, if you see a product at a price that is too good to be true, it probably is. Avoid big discount offers you receive by text, email, social media or online ads.

What should you do if you feel you or a loved one is a victim of fraud? First, acknowledge how vulnerable this can make someone feel. Victims can struggle with feelings of embarrassment or that they should have known better. So, be patient and remember scammers are good at what they do, and almost everyone has some vulnerability that can be exploited.

By reporting it, you can help prevent others from being victimized.

File a police report.
Alert the FTC at reportfraud.ftc.gov.
Contact the FBI Internet Crime Complaint Center at ic3.gov.
Report it to your state attorney general.
If it involves Social Security, call the Administration’s fraud hotline at 800-269-0271.

Finally, reach out to your Edward Jones financial advisor for further guidance. There are steps you can take to help protect your accounts.

Transcript for 5 common signs of fraud

6 red flags that may indicate you’re being scammed

6 common types of fraud