Go Phish: Beware of Financial Scamming

Economic upheaval gives scammers new ways to dupe people and steal identities.

ByMellody Hobson via via logo
November 06, 2008, 3:31 PM

Nov. 7, 2008 — -- Stock market woes and a major financial upheaval have given financial scammers a very fertile hunting ground. Big financial firms like Fidelity, Bank of America, Wachovia and Citibank have been particularly hard-hit by scammers looking to take advantage of the recent headlines. But there are some simple precautions you can take to keep your money safe from con artists.

Be Wary of E-Mails That Ask for Personal Information

Banks and other financial institutions will never ask you for personal information via e-mail. Never. So, if you receive an e-mail or get a pop-up ad on your screen asking for your information, ignore it. The key words to be on the look out for are: validate, update or confirm -- these are red flags that the request is fraudulent. If you find yourself receiving a number of suspicious messages, the Federal Trade Commission has set up an "in-box" to investigate. You can report the messages to reportphishing@antiphishing.org.

Make Sure Phone Calls Are From a Valid Number

Similarly, you need to hang up the phone if you receive an inbound phone call asking for your financial information. Tell the caller you will call them back -- and not to the number they provide. The best way to make sure you are calling a valid number is to look at the most recent statement from the company and call the number that is listed on the bottom. The scammers have become very good at generating phone numbers which may look official, but they are in fact anything but.

Other Tips to Beat Scammers

The best line of defense after appropriately handling inbound e-mails and phone calls is to equip your computer with the most up to date anti-virus software.

Often, an inbound e-mail will have a link posted within the body of the message asking for you to go to a specific, bogus Web site designed to encourage you to add your personal information. I recently received an e-mail with a link to a Web site that had the look and feel of Fidelity, but in fact, it was completely fake.

The good news is that most commonly used web browsers, like Explorer and Firefox, are equipped with anti-phishing software that will actually prohibit a user from going to a suspicious Web site. But, it is not enough to rely on the security of your browser or antivirus software alone.

Check Your Credit Report

I know I sound like a broken record on this one, but I cannot stress enough the importance of knowing what is on your credit report. Especially given the times, it is vital you make sure everything is correct.

According to the Public Interest Research Group, one in four credit reports has errors that are serious enough to disqualify consumers from opening a bank account, purchasing a home home, or evening getting a job! The easiest way to access a free credit report is to log on to www.annualcreditreport.com. Additionally, you can obtain a copy of your report by calling the toll-free numbers of the respective big three-- Equifax, Experian and TransUnion.

If You've Been Scammed, Take Action

First and foremost, contact your bank and all financial institutions where you have an account to notify them that you have been a victim of identity theft. Do not leave any stone unturned -- once the scammer has your personal data any of your accounts can be breached.

Second, you should contact the three credit bureaus -- TransUnion, Equifax and Experian and have a "fraud alert" added to your file. This is a good way to protect yourself from having additional accounts opened without your approval.

Third, file an official report with the FTC documenting that you have been victim of identity theft.

And finally, call your local police department to file a report to again document that a crime has been committed. Keep in mind, there is no guarantee your losses will be covered. Your financial institution will work with you to determine what you are responsible for based on the information you provided to the scammer.

I recommend you go to the FTC's web site as they have an excellent and very detailed list of exactly what you should and should not do. Their address is www.ftc.gov.

Mellody Hobson, president of Ariel Investments in Chicago, is "Good Morning America's" personal finance expert. Click here to visit her Web site, www.arielinvestments.com. Matthew Yale contributed to this report.

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