Consumer Financial Education: Fraud and Scam Awareness

It is unfortunate that embarrassment keeps many people from reporting that they may have been a victim of a fraud or scam. You, the consumer, play a vital part in alerting the appropriate agencies, so actions can be taken to prevent such financial fraud from happening to others.

Anyone can fall victim to unscrupulous business practices, financial frauds, or scams. All scammers have an agenda: to gain access to your personal information, and defraud you out of your hard-earned money/savings or property! Losing money to a fraud or scam can be financially and emotionally devasting, and very difficult to recover from.

Even more concerning is that seniors are known to be specifically targeted. They are typically more trusting, retired and more likely to have a nest egg, and often have access to substantial home equity. Scammers also prey on those who are vulnerable (i.e. those with mild cognitive impairment, widows, isolated/lonely); in these situations, a phone call from someone offering you “an opportunity” can become a daily call that you might welcome because they are “showing concern” or “checking up on you” and is now your friend. This is one of many ploys to gain your trust and get your money!

The Department of Financial Protection and Innovation’s Education and Outreach Unit has free educational material, namely the Protect Yourself from Fraud, which provides helpful information you can use to prevent yourself from falling victim to fraud or a scam.

Knowledge is power! It is imperative to safeguard your personal and financial information to minimize the risk of financial exploitation and identity theft. If you are educated about the latest frauds and scams, you become better equipped with tools to recognize potential red flags.

Common Frauds and Scams:

Some common scams and frauds have been around for years but continue to evolve in the way they are presented, especially now during an unexpected pandemic. Here are a few popular common methods to be aware of:

 Telephone Scams:

  • Imposter Caller: A call claiming to be from a known utility company (or mobile carrier, or credit card company) telling you there is a delinquent bill that needs to be paid right away or there will be consequences.
  • Social Security & IRS call: A call claiming to be the Social Security Administration (SSA), informing you that your Social Security card has been used and/or is now frozen. Often asks for information. Or can be a call claiming to be the IRS, telling you that you owe the IRS and need to pay now, or you will be arrested.
  • Debt Relief: A call claiming to offer help to reduce your debt, but requests fee in advance. Or can be a call claiming to be your credit card company offering a lower APR, but you need to provide the credit card number.
  • Relative/Grandparent: A call from a ‘relative or grandchild’ who has been arrested and needs money right away or they will go to jail.

Phishing Scams – Identity Theft:

  • Dumpster Divers: Fraudsters look for cancelled checks, credit card statements and other financial documents containing personal information.
  • Online Services: Keep your PIN (Personal Identification Number) and passwords protected and secure, and occasionally change them.
  • Copycat Sites: You may receive e-mails or text messages to appear as a legitimate site but are actually part of a scam looking to gain access to your accounts or personal information.

Helpful Tips to Avoid Being Scammed:

  • Government agencies DO NOT call you asking for payments. You will receive something in writing from the entity in question.
  • If you did not initiate a call, be cautious providing your personal information over the phone.
  • Do not just trash toss it – shred all unwanted documents, cancelled checks or applications that contain personal or financial information.
  • If you need financial relief, first seek assistance by going to the financial institution directly (i.e. mortgage servicer or financial institution). Fraudsters target people in distress with “relief opportunities”.
  • Keep a close eye on your banking and other billing statements. Report your discrepancies to the institution.

Further resources:

Reporting Fraud and Scams:

If you suspect that you have been a victim of financial fraud or a scam, you should file a complaint with the Department of Financial Protection and Innovation (DFPI). You can also file a complaint if a financial service provider is using unlawful, unfair, abusive, or deceptive practices.

To file a complaint, visit https://dfpi.ca.gov/file-a-complaint/.

Before filing a complaint, you should try to work out the issue directly with the financial service provider if they have a customer service representative or help center. Document those conversations if they are by phone and save email exchanges – this may provide the Department with valuable information about how an individual or provider is responding to consumers.

When filing a complaint with DFPI, we’ll ask you to explain what the issue is and provide documentation. Relevant information you can attach to your complaint includes branch information or business location, signed agreements, loan applications, applicable disclosure documents, and communication between you and the company or individual. For complaints against PACE program administrators, helpful documents include signed contracts from PACE administrators and contractors. Documents should be provided in PDF, Word, or JPEG formats. DO NOT include personal financial information such as Social Security numbers, and full account numbers.

If you have questions about something you suspect is a scam or you just want to check if a financial service provider is licensed by DFPI, you can email us at Ask.DFPI@dfpi.ca.gov or call toll-free at (866) 275-2677.

LEGAL DISCLAIMER

The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The DFPI updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be additional resources that also serve your needs.

Last updated: May 26, 2021 @ 10:42 pm