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How Scams Work and What You Can Do to Avoid Them

How Scams Work and What You Can Do to Avoid Them - October 19, 2018

You get a call or an email. It might say you've won a prize. It might seem to come from a government official. Maybe it seems to be from someone you know or maybe it's from someone you feel like you know. Whatever the story, the request is the same: wire money to pay taxes or fees, or to help someone you care about. 

IRS Imposter Scams 

Here's how they work: 

You get a call from someone who says she's from the IRS. She says that you owe back taxes. She threatens to sue you, arrest or deport you, or revoke your license if you don't pay right away. She tells you to put money on a prepaid debit card and give her the card numbers. 

The caller may know some of your Social Security number. And your caller ID might show a Washington, DC area code. But is it really the IRS calling? 

No. The real IRS won't ask you to pay with prepaid debit cards or wire transfers. They also won't ask for a credit card over the phone. And when the IRS first contacts you about unpaid taxes, they do it by mail, not by phone. And caller IDs can be faked. 

Here's what you can do: 

1. Stop. Don't wire money or pay with a prepaid debit card. Once you send it, the money is gone. If you have questions, go to irs.gov or call the IRS at 800-829-1040. 

2. Pass the information on to a friend. You may not have gotten one of these calls, but the chances are you know someone who has. 


Grandkid Scams

Here's how they work: 

You get a call: "Grandma, I need money for bail." Or money for a medical bill. Or some other kind of trouble. The caller says it's urgent - and tells you to keep it a secret. 

But is the caller who you think it is? Scammers are good at pretending to be someone they're not. They can be convincing: sometimes using information from social networking sites, or hacking into your loved one's email account, to make it seem more real. And they'll pressure you to send money before you have time to think. 

Here's what you can do: 

1. Stop. Check it out. Look up your grandkid's phone number yourself, or call another family member. 

2. Pass this information on to a friend. You may not have gotten one of these calls, but chances are you know someone who will get one - if they haven't already. 


"You've Won" Scams 

Here's how they work: 

You get a card, a call, or an email telling you that you won! Maybe it's a trip or a prize, a lottery or a sweepstakes. The person calling is so excited and can't wait for you to get your winnings. 

But here's what happens next: they tell you there's a fee, some taxes, or customs duties to pay. And then they ask for your credit card number or bank account information, or they ask you to wire money. 

Either way, you lose money instead of winning it. You don't ever get that big prize. Instead, you get more requests for money, and more promises that you won big. 

Here's what you can do: 

1. Keep your money - and your information - to yourself. Never share your financial information with someone who contacts you and claims to need it. And never wire money to anyone who asks you to. 

2. Pass this information on to a friend. You probably throw away these kinds of scams or hang up when you get these calls. But you probably know someone who could use a friendly reminder. 


Please Report Scams

If you spot a scam, please report it to the Federal Trade Commission. 

  • Call the FTC at 1-877-FTC-HELP
    (1-877-382-4357) or TTY 1-866-653-4261
  • Go online: ftc.gov/complaint 

Your complaint can help protect other people. By filing a complaint, you can help the FTC's investigators identify the scammers and stop them before they can get someone's hard-earned money. It really makes a difference.  


The information above is provided to you by the Federal Trade Commission. For more related consumer information, please visit: https://www.consumer.ftc.gov/features/feature-0030-pass-it-on