More Than 40% of Consumers Don't Recognize Red Flags of a Scam

×
Illustration of online scam
Getty Images
If you haven't received an email by now offering you a huge sum of money in exchange for a small initial deposit or fee, you should feel a little left out.

According to "Financial Fraud and Fraud Susceptibility in the United States," a new report from the FINRA Investor Education Foundation, 67 percent of consumers have received this type of email. Another 36 percent have received a letter that says they've won a lottery in a country they've never visited.

The survey found that all told, more than 8 in 10 consumers have been asked to participate in a potentially fraudulent offer.

While most people who are targeted by a scam aren't drawn in, 11 percent of those surveyed had lost a significant amount of money due to a fraudulent offer. But oddly, when asked if they had been a victim of fraud, only 4 percent admitted that they had.

Americans age 65 and older are not only more likely to be targeted by scammers, according to the FINRA research, but they're more likely to lose money if they are targeted -- 34 percent more likely than respondents in their 40s.

Red Flags Aren't Obvious to Everyone

It's frightening how frequently we miss the signs that someone's out to scam us.

FINRA found that more than 40 percent of the people surveyed failed to recognize some of the signs of a fraudulent offer, including some classic red flags, such as offers that tout:
  • A 110 percent annual return on an investment
  • A fully guaranteed investment
  • A promise of a daily rate of return of over 2 percent
In addition to the indications above such as unrealistic promises of a high return without risk, the Better Business Bureau says some of the most common red flags for a scam that consumers ignore include:
  • Your gut instinct tells you something is off. If something doesn't sound right or feel right, don't brush your instinct aside. At the very least, do some investigating.
  • High-pressure tactics. If you're told something is only available for a limited time or you're pushed into making an impulse decision, this often indicates a scam.
  • You're asked to use a money transfer. Money transfers can't be traced, so chances are higher that if you're asked to send money that way, you're being scammed.
  • You're asked for personal information. Scammers commonly ask for things like your address, phone number, banking information, and birth date to gather information about you that can be used for identity theft or to charge a credit card. They can use a variety of ways to reach you if they have some information and can ask you to log in or give them a password via email or phone that can seem legitimate.
  • Vague details. Most scammers attempt to give out as little information about themselves or the specifics of a deal or an investment so that there's less likelihood they can be caught.
  • No contact information. If you can't call back or reach the person who's contacted you, that's a good indication they're not legitimate.

While con artists constantly come up with new variations on old themes to steal your money, staying vigilant and watching out for these warning signs can help protect your bank account from their scams.

Michele Lerner is a contributing writer to The Motley Fool.


Increase your money and finance knowledge from home

Building Credit from Scratch

Start building credit...now.

View Course »

Advice for Recent College Grads

Prepare yourself for the "real world".

View Course »

Add a Comment

*0 / 3000 Character Maximum

136 Comments

Filter by:
galbraith45

THOMAS MONSON PRESIDENT AND MODERN DAY LIVING PROPHET IS A SERIAL PEDOPHILE

November 11 2013 at 9:38 PM Report abuse rate up rate down Reply
Mojavegreen Nln

Cool that like an 11% drop from the 2012 election cycle. A lot of people were scammed on that day lol. Glad I wasn't one of them lol.

November 11 2013 at 8:35 PM Report abuse rate up rate down Reply
white41990

If your stupid enough to fall for those scams out there, then you deserve everything you got coming. But then for some its the only way they learn, I do not feel sorry for anyone who becomes a victim to identity theft or fraud if they share there personal information with anyone asking for it, same goes with those who feel they are getting ripped off by a product or service they purchase and don't read the fine print that comes along with it that might say unless you call to cancel we will charge you whatever amount each month or tell you that in order to buy this or that you got to join and pay a fee every month which will be charged on the payment method you provide during your initial purchase. America needs to learn how to read and do there own research/investigating before just going right in on something, not only is time money, so is knowledge.

November 11 2013 at 2:36 PM Report abuse rate up rate down Reply
2 replies to white41990's comment
phedraop

America also needs to learn the difference in the use of there and their. Do a little research, such as looking it up in a dictionary and investigate. You will see, they do not mean the same thing. Knowledge is important.

November 11 2013 at 5:08 PM Report abuse rate up rate down Reply
rjoh959287

You are a shining example to the world

November 12 2013 at 11:13 AM Report abuse rate up rate down Reply
geraldinagram

NEWER Scam that arrived in our mail box this past week!! BIG, BiG envelope that reflects thed look of Pub.Clear. House\'s mailings. BUT there no company name, an individual\'s name for sign-off--A GRAND PRIZE WINNING FOR YOU--SEND check/MO in amount of $18.95 for add. info. EXPEDITE handling for additional $3 or $4.00. TARGET population are innocent ignorant and old. MILLIONS IN WINNINGS-FRAUD NEEDS INVESTIGATION!!! Pub.Cl.House must review ALSO!

November 11 2013 at 12:02 PM Report abuse rate up rate down Reply
pdbliz

SCAM IS IN WASHINGTON ........HOW SAD AMERICA HAS BECOME TO BELEIVE A SCAM LIKE THIS .......LARGEST SCAM IN HISTORY,,,AND,,,THE REPORTERS AND TV NEWS CASTERS ARE INVOLVED ALSO......
ABC,,,CBS,,,MSNBC,,,NBC......YOU ARE SHAMEFULL IN YOUR LIES YOU SPREAD DAILY..........AND THEM AFTER YOU TELL THE LIE,,,COME BACK AND SAY,,,,YOUR SORRY........
I HOPE YOU ALL ,,,,ROT IN HELL.!!!!!!!

November 11 2013 at 8:21 AM Report abuse -1 rate up rate down Reply
pdbliz

TO ALL VETERANS...........

I want to thank you for your service to your country............May GOG BLESS YOU.!!
MAY GOD BLESS THIS COUNTRY AND FORGIVE US FOR WHAT HAS HAPPEN TO IT.!!!!
PDB NAVY 1968......

November 11 2013 at 8:18 AM Report abuse +2 rate up rate down Reply
1 reply to pdbliz's comment
pdbliz

,,,,,MAY GOD BLESS THIS COUNTRY.!!!!

November 11 2013 at 8:18 AM Report abuse +2 rate up rate down Reply
dcj0350

Consumers, who need or want to buy costly products or services, now have their own personalized and professional purchasing process to ask for proposals from suppliers and sellers, receive offers, negotiate, select the seller they want to do business with and then issue their own purchase order with their own terms and conditions of purchase and their own method of payment. My friend/partner and myself (with over 80 years of combined purchasing experience) have recently launched the secure website https://www.focusedbuyer.com to help protect the consuming public. There are no registration fees, no transaction costs and two GB of server capacity is provided at no charge. There is no software to purchase. Start spending your money more wisely by creating your own legal purchase order contracts and defining exactly how you will settle payment with a contractor or other seller. It's your money and you should spend it the way you want to spend it ... not the way suppliers and sellers dictate the terms of their sale to you. FocusedBuyer(R) holds a USA patent and is also a great business process tool for small and medium sized businesses, start-ups, non-profits and public entities who can not afford full time buying personnel or packaged software solutions. Start fighting back against fraud, illegalities, embezzlement and many other forms of deceptive theft associated with the process of "buying and selling". Use it a few times and you will become your own professional purchasing agent with your own standard, easy to use buying process.

November 11 2013 at 7:46 AM Report abuse -1 rate up rate down Reply
rlupia

Actually about 52% of American can not spot a scam. That is the percentage that voted for Obama.

November 11 2013 at 6:36 AM Report abuse +2 rate up rate down Reply
Gi Gi

How about wrinkle cream, and weightloss pills on face book. postage bought face cream and pills, but you had to notify them in 18days to cancel you out or you receive a can of cream for 75.00 . the pills arrived on sat. 99.00 was debited from my acct. on monday.
my 70 some dollars was reimburserd, i sent back cream.
they would only give me 25% off pills 10 pills arrived in trial size pkgs. I ended up paying Dr.Oz and OPRAH 80 some dollars for pills. I have gained6 lbs when Itook 10 trial size bottle.
Oh, yes, I was to return the month supply of,garcinia cambogia max.

November 11 2013 at 12:56 AM Report abuse +2 rate up rate down Reply
2 replies to Gi Gi's comment
phedraop

People really need to read the fine print. None of it says these creams WILL REMOVE the wrinkles, it says they will "reduce the appearance" but they never say for how long. The same with the weight loss pills - they don't absolutely guarantee that you will lose weight.

I don't know how you could have ended up paying Dr. OZ for pills - if you check his webpage and watch his show, he makes it VERY clear that he does not personally endorse ANY wrinkle creams or weight loss products. Some people may show their products on his show, but you never hear him endorse it. As for Oprah, if you look at her, it's obvious the weight loss pills don't do a darn thing.

Think about it - if this stuff actually worked, why would all these movie stars be getting surgical facelifts if these cream's will remove the wrinkles? Why isn't your doctor prescribing these pills for weight loss if they actually work? The reason is, they do NOT work. It's just a scheme or scam to get your hard earned $$$.

November 11 2013 at 5:06 PM Report abuse +1 rate up rate down Reply
1 reply to phedraop's comment
rjoh959287

If the gimiks touted on TV where any good you would be able to purchase them in a reputable store or receive them via your Dr.Anything thats sounds to good to be true is suspect

November 12 2013 at 11:18 AM Report abuse rate up rate down
rini1946

i agree with phedraop dr oz even on his show says do not buy anything from anyone that uses my name on a product now oprah is different

November 16 2013 at 3:58 PM Report abuse rate up rate down Reply
Gi Gi

today my daughter and I searched out a scam out of uk. bank good but bank has143 charges on one name. not legal name.
His wife died, he would even like to marry me, If he was for real, he could controll money given to me.
m y daughter googled him and bank. got bank report.

November 11 2013 at 12:38 AM Report abuse rate up rate down Reply