How to Protect Yourself From Various Financial Fraud

Lynn Martelli
Lynn Martelli

People get scammed all the time. So, if you’re a young individual, you’ll likely need a crypto scam lawyer or a mortgage attorney on a speed dial. These experts can get you out of just about any pinch, saving you a lot of money in the process.

On top of that, we also suggest you get acquainted with the most common types of fraud. By knowing where the danger is coming from, you can avoid all this mess in the first place. So, to help you out, we’ve outlined the most common financial scams and how to address them.

1.    Mortgage Closing Fraud

Mortgage scams are one of the most common issues affecting homeowners and businesspeople alike. In this particular case, scammers focus on buyers who are closing on a purchase. They send text messages and emails posing as their agent. During the communication, they’ll attempt to get buyers closing costs or down payments.

How to Avoid

Instead of responding directly to these messages, you should contact the person directly. Some of these guys call from abroad and might have a thick accent. They might also stumble during the conversion or provide some other giveaways. Ask the scammer intimate questions about the contract to determine if the person is in the loop.

2.    Overpayment

One of the more common forms of fraud involves fake checks. A person will send you a check claiming they made a mistake. In return, they would expect that you send them real money as compensation. Alternatively, they might send you a prize and ask you to cover the taxes so you can receive it.

How to Avoid

The most essential thing in these cases is always having a healthy head on your shoulders. Don’t accept any proposals or suggestions, especially if you didn’t participate in any contests. The safest bet is to never respond to or interact with a person who sent you a check out of the blue.

Furthermore, don’t accept checks that don’t feature the exact price as the one you paid. If you’re doing online transactions, double-check the origin of all incoming documents and whether they’re associated with your seller’s email address.

3.    Debt Collection

Among other things, scammers might figure out that you owe money. They might be able to track your past transactions or invent non-existing costs. For example, they might contact you, claiming you owe your bank some money because you didn’t pay for this or that service.

How to Avoid

When settling any type of debt, go directly to the person or institution that borrowed you the money. Go to their physical office and converse with their agents. If they’ve sent debt collectors, ask them who these people are so you can confirm their identity.

If you’re interacting with someone online, ask them for their company name, street address, and tax number. When you have all this data, search the company online and contact it (if the data is valid). Even then, you should be skeptical when paying hefty sums.

4.    Cryptocurrencies

One of the most common scams as of late comes in the form of cryptocurrencies. Given these are relatively young financial assets, conmen invent new, advanced methods for getting your money on a daily basis.

Among others, they use technique called “pig butchering.” They accidentally send you a message or an email claiming they have a wrong number. Then, they try to build trust that would eventually lead to crypto investment. They’ll even point you to a specific app where they’ll use fake money and, in return, they’ll get your real money.

How to Avoid

Like with other types of scams, you must be suspicious of unsolicited messages. When a person starts some bogus conversation, this is a clear indication they want something from you. Furthermore, you shouldn’t take their word for investing in unknown websites. Instead, research the currency and the platform to see if they’re legitimate.

5.    Imposter Scams

There are a lot of scammers who pretend to be banks, IRS, and other government institutions. They might tell you that you owe money or taxes and might even provide you with forms that look valid. Some of them might even hit you with car fines and similar tricks.

How to Avoid

In these situations, you need to be level-headed. Given these are governmental organizations, it shouldn’t be too hard to get ahold of them. Contact the institution in question through their official email or number to get more answers.

6.    Phishing

Another common form of scam is phishing. In this particular case, scammers send emails posing as real web shops and other websites. They will ask you to finish a transaction, settle a debt, check your account, or something similar. During that time, they will send you to a fake page where they’ll extract your username and password.

How to Avoid

Phishing is one of the harder scams to detect especially if you had communication with a particular site. The most important thing to keep in mind is to never open PDFs and other files from unknown emails. Check the URL before any further interaction; it’s much better to delete email altogether then give access to your payment processor.

7.    Sweetheart Scams

Similar to most of these scams, sweetheart cons came with new, digital age. They pertain to any interaction with an opposite sex where a scammer tries to get victims personal data.

The biggest issue with this kind of misuse is that it’s hard to detect. A person will invest several months and even years manipulating a person and winning their trust. After that, they’ll slowly start to reap benefits by getting expensive gifts, airline tickets, or getting support for their “financial problems.”

How to Avoid

The best way to avoid this issue is by meeting your dates in public. Most of these scammers never meet their victims, or if they do, they have limited interaction with them. By meeting your scammer and taking a few photos, you make it easier to find the person if anything goes awry.

8.    Employment Fraud

In this particular case, a conman will pose as a firm hiring new staffers. They will go through the usual recruitment process, offering incredible terms. They might even have a functioning website and social profiles.

However, once they accept you, they might ask for a deposit or some of your financial data. They usually justify this by saying they need the money to create a portfolio or start a particular process.

How to Avoid

It shouldn’t be too hard to establish whether a company is legitimate or not. All you have to do is perform basic web search and check out reviews. Guys who were scammed in the past will generally provide some info about the company so you don’t fall for the same trick again.


By following these tricks, you can easily avoid any financial scam. We recommend that you always do a background check and pay attention to red flags. That way, no one can take advantage of your good nature.

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