Don’t Fall for These 6 Popular Financial Scams in 2024
Consumers have always had to be wary of financial fraud and other scams, but new technologies, particularly AI-supported software and programs, have dramatically increased the prevalence of fraud. According to the Federal Trade Commission (FTC), American consumers lost more than $7 billion to fraud during the first three quarters of 2023, up 5 percent from the same period in 2022.
“Fraud is at a crisis level in this country,” says American Association of Retired Persons (AARP) director of fraud prevention programs, noting the perpetrators of these scams are often multinational criminal enterprises. “They have the money, they have the time and they’ve got the playbook to get you into that heightened emotional state.”
With scams becoming more sophisticated, it’s essential for people to educate themselves about threats. The FINRA Investor Education Foundation reports that individuals who have knowledge about particular types of scams are 80 percent less likely to engage with the perpetrators. With that in mind, here are six common scams to watch out for in 2024.
1. Student Loan Forgiveness
According to data from the U.S. Federal Reserve, the average student loan borrower in the US has a debt balance of $37,718. There are also more than 40 million people with outstanding debt. This, combined with the complications and changes surrounding President Biden’s student loan forgiveness plan, has created a massive scam opportunity for criminals.
In many cases, scammers will contact individuals and promise to help them alleviate or remove all their student loan debt by paying a fee. They’ll pressure victims with urgency in hopes of securing their banking information or Social Security number.
Student loan forgiveness applications can be filed free of charge with the U.S. Department of Education. There is no application fee, and moreover, representatives from the department never contact borrowers by phone.
2. Deepfakes
Generative AI has plenty of beneficial applications in practically every sector of society. Unfortunately, it has also given fraudsters the ability to create convincing and realistic media, including video and audio recordings. Scammers just need a sample of a person’s voice to generate complete and personalized dialogue aimed at tricking consumers.
For example, a criminal can use AI to copy a bank manager’s voice and reach out to clients to extract their personal information. The New York Times, in August 2023, reported one instance in which criminals used a deepfake copy of an investor’s voice in an attempt to trick the bank into moving the client’s money to another account.
While these sophisticated schemes can seem realistic, there are several clues that suggest the person on the other line of a voice call isn’t real, including a lack of emotion or inflection and robotic intonation. Before giving away any information in unsolicited calls, be sure to verify the person’s identity via an alternate communication channel.
3. Exploiting Personal Relationships
Scammers are also using deepfake voice recordings to exploit personal relationships in what’s commonly known as “grandparent scams”. In these scams, thieves create audio recordings of a person, usually in a scenario in which they’re in immediate danger and call their loved ones. They’ll ask for money and tell the person on the other line to keep the call a secret. Those who receive calls of this nature should first contact the family member or friend in question via their regular phone number.
4. Government Account Takeovers
Government account takeovers are a type of phishing scam that uses social engineering to manipulate victims into sharing personal information via email, phone calls, or social media. Often, scammers will send email or texts to targets posing as government agencies, i.e., the IRS, and request sensitive information for fraudulent purposes, such as giving out tax refunds. These messages look legitimate and will be even more difficult to detect as fraud with the ubiquity of AI. Consumers should directly contact the purported agency through reliable channels to verify suspicious communication.
5. Fake Employers
Online job scams have been increasing in frequency early in 2024 as scammers look to take advantage of people wanting more flexible work-from-home schedules and additional income. These scams usually promise quick and easy money through jobs that require minimal experience or qualifications. Scammers entice their victims with these promises and often direct them to fake websites where they might have to provide banking information and other personal information.
While some companies do actively recruit talent, it’s not often the case they’ll make hiring decisions with no interviews or background checks. If a job offer seems too good to be true, it probably is. Thoroughly research any company that offers you employment. A good rule of thumb is to Google search “company name+scam” to see if there’s anyone else who has had similar concerns or experiences.
6. Peer-to-Peer Payments
Peer-to-peer (P2P) payment apps, including Cash App and Zelle, are convenient for both consumers and scammers. Zelle users, in particular, have been targeted by P2P scams in recent months. Either through email, text, or voice call, scammers might pose as an employee from the fraud department of their target’s bank and claim someone was attempting to steal their money via Zelle. As part of the solution, they direct the target to send money to themselves, but it’s ultimately directed into the scammer’s account.
As with any form of unsolicited communication, consumers should verify the identity of the person with whom they’re talking and be cautious of urgent requests.
It is always a good idea to have a comprehensive identity theft protection and restoration plan in place-especially a plan that offers you help from a licensed private investigator, through the use of a limited power of attorney, as these professionals can fight these increasingly sophisticated frauds and battles on your behalf.
