Updated: Aug 15, 2025

Financial scams are more common than ever—and they don’t just target the wealthy. Scammers often go after everyday people, especially those dealing with job loss, debt, or financial stress. Knowing how these scams work is your best defense.

Why Financial Scams Are So Effective

Scams work because they tap into emotions like fear, urgency, or excitement. You might get a message saying your bank account is frozen, a stranger offering you money, or a call claiming you owe the IRS. In each case, the scammer is hoping you’ll act quickly without stopping to think.

And it’s not just phone calls or emails anymore. Scammers use texts, social media, fake websites, and even job applications to trick people. They pretend to be government agencies, banks, tech support, or even friends. Their goal is always the same: to get your money or personal information.

Most Common Types of Financial Scams

While scams come in many forms, a few types show up more often than others—especially for people on tight budgets or looking for help.

Fake Government or IRS Scams
You get a phone call or letter saying you owe taxes or need to pay a fine immediately. The caller may threaten arrest or deportation if you don’t pay. The IRS does not call people demanding immediate payment—and they never ask for payment through gift cards, prepaid debit cards, or wire transfers.

Utility and Rent Payment Scams
Scammers claim your electricity, water, or rent is overdue and demand payment right away. They might even “spoof” a real phone number to make the call look legitimate. Always check your account directly or call the company back at a verified number before paying anything.

Job Offer or Work-from-Home Scams
Scammers offer fake jobs that promise high pay for little work. They might send a fake check and ask you to send money back, or ask for your banking info for “direct deposit.” If a job seems too good to be true, it probably is. Never send money to get hired.

Prize or Lottery Scams
You’re told you won money or a prize—but you need to pay a fee or taxes to claim it. Real sweepstakes don’t ask for money upfront. If you didn’t enter, you didn’t win.

Fake Tech Support
You get a call, email, or pop-up saying your computer has a virus and you need to call tech support. The scammer might ask to control your computer remotely or charge you for fake services. Microsoft and other companies never call people out of the blue for tech issues.

Romance and Friendship Scams
Someone builds a relationship online—then asks for help with bills, medical costs, or emergencies. Scammers often create fake profiles and take advantage of loneliness. Never send money to someone you haven’t met in person.

Debt Relief or Loan Forgiveness Scams
These scams promise to erase your debt, fix your credit, or get your student loans forgiven for a fee. Many of these services are available for free at studentaid.gov or through nonprofit credit counselors. Don’t trust anyone who guarantees fast results or asks for money upfront.

How to Spot a Scam

Scammers use pressure, secrecy, and urgency to trick you. Here are some red flags to watch for:

• They ask for payment by gift card, wire transfer, or cryptocurrency

• They refuse to give you time to think or ask someone else for advice

• They threaten you with jail, fines, or losing services

• They say you need to keep it a secret

• They ask for your Social Security number, bank account, or password

• They offer deals that sound too good to be true

If something feels off, trust your gut. Hang up, close the message, and do your own research.

What to Do If You’re Targeted

If you get a suspicious call, text, or email, don’t respond. Don’t click on links or open attachments from people you don’t know. If you’re unsure, contact the company or agency directly using a number from their official website.

You can also report scams to:

• ReportFraud.ftc.gov – for general scams

• IdentityTheft.gov – if your info was stolen

• USA.gov/stop-scams-frauds – for other types of fraud

Reporting helps stop scams and protect others, even if the money can’t be recovered.

If you gave away personal information, contact your bank or credit card company right away. They may be able to freeze your account or stop a transaction. You should also consider placing a fraud alert on your credit report.

Protect Yourself with These Simple Steps

You don’t need to be tech-savvy to stay safe. A few basic habits go a long way in protecting your money and personal information.

Use strong passwords and avoid using the same one everywhere. Add two-factor authentication to important accounts, especially your bank and email.

Keep your phone number and address private when applying for jobs or filling out online forms. Use privacy settings on social media so strangers can’t see your posts.

Check your credit report once a year for free at AnnualCreditReport.com. Look for accounts you don’t recognize or incorrect information.

If someone asks for payment in a strange way—like with a gift card—stop and ask someone you trust before continuing. Scammers count on catching you off guard, especially when you’re stressed or rushing.

Keep written records of payments and conversations when dealing with landlords, employers, or services. Scammers often target people who rely on verbal agreements and can’t prove what was said.

Share What You Know

Scams thrive when people are too embarrassed to talk about them. Sharing your story—whether you spotted a scam or fell for one—can help others stay safe.

Talk to your friends, family, and neighbors, especially older relatives or younger adults just starting to manage their finances. The more we talk about scams, the harder it is for scammers to succeed.

Community centers, churches, and libraries often host workshops or post scam alerts. If you work with a nonprofit, food bank, or community group, ask if they have materials or training to help clients protect themselves.

Free Help Is Available

You don’t need to pay someone to fix your credit, get out of debt, or apply for benefits. There are trusted, free resources that can guide you.

For credit and debt help, visit NFCC.org to find a nonprofit counselor near you. If you’re dealing with identity theft, go to IdentityTheft.gov to create a recovery plan.

For questions about Social Security, Medicare, or other benefits, contact your local Area Agency on Aging or visit Benefits.gov. These services are free and run by trained professionals—not scammy companies trying to take your money.

Final Thoughts

Scammers are always coming up with new tricks, but the tactics are often the same. Stay cautious, ask questions, and never feel rushed into giving up your money or personal information. Knowing the warning signs and sharing them with others is one of the best ways to protect your community—and your wallet.