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Four Red Flags For Fraud

By Ryan L. Kaiser, CFE, Assistant Fraud Risk Manager, Canandaigua National Bank & Trust

November 14-20 is Fraud Awareness week – take a few minutes to review the below tips and tricks to identify signs that you’re dealing with a fraudster, as well as some general best practice guidelines.

  1. Scammers pretend to be working with an organization you know.

    Fraudsters are opportunistic and choose wisely when it comes to social engineering. They know you’re more likely to respond to outreach if they pretend to be from a government agency, or from a trusted business that you’re familiar with, like a utility company, service organization, or a charity.

  2. The fraudster either presents a problem to you, or incentivizes you with a prize.

    A bad actor may state that you owe money to the IRS, that a family friend has an emergency and needs help, or that your computer has been hacked – anything to inject a sense of panic in order to get your attention.

    Or, a fraudster may contact you saying you won a sweepstakes or some other free gift – these fraudsters draw on consumers’ curiosity and excitement of a possible payout.

  3. A scammer will exert pressure to act immediately.

    The last thing a fraudster wants is for you to have some time to consider all your options, to re-read that email, or think through that conversation one more time before acting. In today’s environment, it’s easy to research trending scams online – getting you to ‘act now’ reduces the probability that you’ll successfully identify a fraud scheme before it’s too late.

  4. Fraudsters request payments through specific channels.

    Scammers commonly request advance payments via wire transfer, money transfer services, peer-to-peer payment apps, or gift cards – any such request should draw significant red flags! These payment methods are difficult to trace, and typically irreversible.

    Other fraudsters will execute pay-and-return schemes, where a check is sent to you and the fraudster has you send funds back from an ‘overage.’ Later on, the original check bounces, leaving the consumer at a loss.

Best Practices –

  • Always verify you’re working with a legitimate organization. Legitimate organizations don’t call, email or text asking for personal information like bank account numbers, credit card numbers, or social security numbers, ever! Always err on the side of skepticism and caution.
  • Today’s technology makes it easy to mask identities of communications – don’t trust caller ID or assume that an email ‘Sent From’ field is accurate! Place a call to a known legitimate phone number of the person or organization, if you have doubts.
  • Resist the urge to act immediately. Legitimate businesses will give you time to make decisions and weigh your options. Anyone who contacts you and exerts pressure to immediately provide personal info or payments is almost certainly a fraudster.
  • Lastly, consult someone you trust before taking action. If you’re uncertain about a situation – tell someone what’s happening - perhaps a family member or trusted friend. Talking the situation through with someone could help you realize you’re falling for a scam.

If you spot a scam, report it at ftc.gov/complaint. Your reports help the FTC and law enforcement investigate scams and bring fraudsters to justice.

To stay up-to-date on trending fraud schemes, an excellent resource to refer to is usa.gov/common-scams-frauds