Protect Your Money From These 7 Common Financial Scams in 2023!


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In the era of technology and digitalization, the world is more interconnected than ever. This connection has brought about many conveniences, but it also leaves us vulnerable to a wide variety of financial scams. As we strive to protect our hard-earned money, it’s crucial to understand and recognize common scams that could potentially wreak havoc on our financial stability.

According to the Federal Trade Commission (FTC), Americans reported losing over $8.8 billion to scams in 2022. This number is likely just the tip of the iceberg as many scams go unreported.

In this article, we’ll delve into 7 of the most common financial scams circulating in our digital world today. From phishing scams to copycat social media accounts. Our goal is to equip you with the knowledge to identify and evade these traps before they ensnare you or someone you care about.

We’ll pay special attention to how these scams disproportionately target vulnerable populations, like the elderly and people with intellectual disabilities. As we explore these dangers, we’ll provide practical tips and advice on how to protect yourself and your loved ones.

Awareness is the first step in prevention. Let’s stay vigilant, stay informed, and ensure that our money stays safely where it belongs – in our own pockets.

1. Copycat Social Media Accounts Scams

In today’s digital era, copycat social media accounts have emerged as a popular scamming method. Cybercriminals create replicas of official accounts or impersonate an individual you may know or a public figure you follow. These fake accounts can be uncannily similar to the real ones, using the same profile pictures and posting similar content.

The main objective of the scammers running these accounts is to exploit your trust in the person or brand they’re impersonating. You may receive a message that appears to be from a friend asking for financial help. They may share that they’ve fallen on hard times and ask you to lend them a little money.

The scammer may pose as a brand or celebrity offering giveaways. To participate, they ask you to click a link. This link can lead to a phishing website. They may also request personal details for potential identity theft.

According to the Federal Trade Commission (FTC), there was a 120% increase in losses due to scams involving social media and online relationships from 2020 to 2021. These scams are particularly effective because of the level of trust people place in their social media networks.

It’s essential to be wary of any unsolicited requests for money or personal information, even if they appear to come from someone you know. Always be suspicious of friend requests you receive from people you are already connected to. This is the fraudulent account trying to gain access.

Here are a few tips to protect yourself:

  1. Verify the account: Check for verification badges on professional accounts. Most social media platforms provide a blue checkmark to verified profiles.
  2. Check the account’s activity: Fake accounts often have few posts and a recent creation date.
  3. Be cautious with links: Never click on a link from an unverified source. They can lead to phishing websites designed to steal your personal information.
  4. Report and block suspicious accounts: Report any account that appears to be impersonating someone else.
  5. Avoid sharing personal information: Scammers may use any information you share to guess security questions or to impersonate you to scam others.

By taking these precautions, you can protect yourself from the increasing threat of copycat social media scams.

2. Phishing Scams

Phishing scams are a prevalent type of online fraud where scammers pose as a trustworthy entity to trick individuals into revealing sensitive information, like passwords, credit card numbers, or Social Security numbers. These scams can occur via email, text messages, or phone calls.

Typically, a phishing email might appear to come from a reputable company, such as a bank or an online retailer. These emails create a sense of urgency, suggesting that there’s a problem with your account that requires immediate attention. The email usually contains a link leading to a fake website designed to look legitimate. Unwitting victims who click on this link are asked to input their personal information, which the scammers then steal.

According to a report by Cybersecurity Ventures, phishing scams are projected to result in damages of $10.5 billion annually by 2025. It’s not just individuals either, large companies have had large data breaches from the same phishing attacks looking to empty out our savings. 

Protecting yourself from phishing scams involves being vigilant and cautious when opening emails or messages from unfamiliar sources. Always double-check the sender’s email address for inconsistencies, avoid clicking on suspicious links, and never share your personal or financial information via email or text message. If you believe there’s an issue with an account, reach out to the company directly using contact information from their official website, not the information provided in the suspicious email.

3. Tech Support Scams

Tech support scams prey on your fear of viruses, malware, and other technical issues that might harm your computer or compromise your data. Scammers, pretending to be tech support specialists from a trusted company like Microsoft or Apple, contact you via phone, pop-up messages, or emails, claiming your computer has a serious problem that needs immediate resolution.

They may instruct you to download software. This software is actually malware designed to steal your information. They might also direct you to a specific website. There, they’ll ask you to enter your credit card details to ‘purchase’ tech support services.

The FBI’s Internet Crime Complaint Center reported a loss of over $347 million due to tech support fraud in 2021 alone, demonstrating the seriousness and prevalence of these scams.

Protecting yourself from tech support scams involves recognizing the signs of a scam. Remember, legitimate tech companies will not initiate unsolicited contact to request personal or financial information or to fix your computer. If you receive a suspicious call or message, hang up or close the message immediately. Avoid clicking on any provided links or calling any given numbers. Never allow a third party to control your computer. Only make exceptions when you can confirm they represent a computer support team you contacted. If you’re concerned about your computer, contact a trusted tech professional or the support team of your device’s manufacturer using the contact information on their official website.

4. Romance Scams

Romance scams, also known as dating scams or sweetheart swindles, involve scammers creating fake profiles on dating sites, apps, or social media platforms to exploit those looking for romance. These scammers often use stolen photos and identities to reel in their victims, portraying themselves as charming, successful individuals looking for a genuine relationship. The use of AI-generated images, which can’t be tracked down to a real person, has made this even easier. AI-generated text helps them communicate to their victims in any language.

Over time, they build a strong emotional bond with their targets. Once they’ve gained their trust, they concoct a believable story to ask for money. The reasons vary widely, ranging from travel expenses to visit the victim, medical emergencies, loss of a job, or investments in a promising business opportunity. Which ever reason, they typically give an immediate need for money. According to a study by the Better Business Bureau, victims in the U.S. and Canada have reported losing nearly $1 billion over the last three years to such scams.

Prevention involves a healthy dose of skepticism and vigilance. Be wary of individuals who profess their love quickly, refuse to meet in person or via video call, always have an excuse for not meeting, or ask for money for any reason. Conduct a reverse image search of the person’s profile picture to check if it’s associated with another name or with scams. And most importantly, never send money or personal information to someone you’ve only met online, no matter how compelling their story may be.

5. Social Security Scams

Social Security scams involve scammers pretending to be employees of the Social Security Administration (SSA). They contact you, usually by phone, alleging that your Social Security number (SSN) has been suspended because of a suspicious activity or linked to a crime. In some cases, they may threaten you with arrest or legal action if you don’t provide personal information or pay a fine or fee.

The purpose of these scams is to trick you into revealing sensitive information, such as your SSN or bank account number, or to extort money. According to a report by the Senate Aging Committee, Social Security scams were the most common form of fraud reported.

Protecting yourself from Social Security scams is crucial. Here’s what you need to know:

  • The SSA will never call you out of the blue to ask for your Social Security number. They will never ask you to pay anything, nor will they threaten your benefits.
  • Never give your SSN, credit card, or bank account number to anyone who contacts you. Don’t confirm the last 4 digits of your SSN.
  • If you receive a suspicious call, hang up immediately.

If you’ve received a call from someone claiming to be the SSA, you can call the SSA’s official number at 1-800-772-1213 to verify its legitimacy. And remember to report any scam calls to the Office of the Inspector General.

6. Lottery and Sweepstakes Scams

Lottery and sweepstakes scams capitalize on the dream of a big windfall. These scams typically begin with an unexpected phone call, letter, email, or even social media message, informing you that you’ve won a large sum of money or a valuable prize in a lottery or sweepstakes that you don’t remember entering.

However, they tell you that you must pay taxes, fees, or customs duties upfront to claim your ‘prize’. Scammers may ask for payment via wire transfer or gift cards (always be suspicious of gift card payments), which are hard to trace and recover. They’ll insist on secrecy, urging you not to tell family or friends while the process is completed.

To protect yourself from these scams, remember these key points:

  • If you didn’t enter a lottery or sweepstakes, you can’t win it.
  • Never pay money to receive a prize. Legitimate lotteries and sweepstakes will deduct any taxes or fees from the winnings.
  • Be wary of requests for secrecy. This is a red flag that the caller might be trying to involve you in a scam.
  • Do not provide any personal or financial information over the phone or via email to unverified sources.

Always do your research and trust your instincts. If something seems too good to be true, it probably is.

7. IRS Impersonation Scams

IRS impersonation scams involve scammers pretending to be IRS officials to steal your money or your personal information. The scammers might call you or send an unsolicited email stating that you owe taxes and threaten you with arrest, deportation, or license revocation if you don’t pay immediately. They may also leave “urgent” callback requests through robocalls or phishing emails.

They often demand payment by wire transfer, prepaid debit card, gift card, or other unconventional methods. Scammers might also ask for personal information, like your Social Security number or bank account details.

The Treasury Inspector General for Tax Administration (TIGTA) reported that they have received over 2.1 million reports of these scams since October 2013, leading to a known loss of over $73.6 million.

To protect yourself from IRS impersonation scams, it’s important to know the IRS’s legitimate practices.

The IRS will never:

  • Initiate contact with taxpayers by email, text messages, or social media channels to request personal or financial information.
  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.

If you receive a suspicious phone call or message from someone claiming to be from the IRS and you owe tax or think you might owe tax, call the IRS at 1-800-829-1040. The IRS employees can help you with a payment issue if there is an issue.

Other Financial Scams to Avoid (The List is Growing!)

  • Facebook Marketplace scams (people listing items for sale, collecting the money via apps. like Cashapp, and then never shipping it to you)
  • Facebook buy/sell/trade group scams (purchasing used items like gym clothing through a buy/sell/trade Facebook group, collecting the money via avenues like PayPal or Cashapp, then never shipping the items and “disappearing”)

Vulnerable Populations

Scammers disproportionately target individuals they perceive as vulnerable, particularly the elderly and people with intellectual disabilities. According to CNBC, seniors lose more than $3 billion each year to financial fraud. A report by the American Journal of Public Health found that 1 in 18 cognitively intact, community-dwelling older adults reported being victims of financial scams in the past year. The intellectually disabled are also at high risk. They may have difficulty understanding complex financial information or may be easily manipulated due to their desire for social connections. 

Protecting these vulnerable populations requires concerted efforts from individuals, families, financial institutions, and governmental bodies. Here’s what you can do:

  • Stay involved in the financial lives of your loved ones. Regularly review their bank statements and look for unusual transactions.
  • Educate your loved ones about scams. Educate them on the common signs of scams and what to do if they suspect they’ve been targeted.
  • Encourage the use of direct deposit for benefit checks to prevent checks from being stolen from the mailbox.
  • Report suspected financial abuse to your local adult protective services agency and to law enforcement.

Protecting Yourself

While it’s concerning to realize the number and variety of financial scams that are out there, being aware of them is the first step toward protecting yourself.

Here are some additional steps you can take to safeguard your finances:

  1. Be Informed: Educate yourself about the different types of scams and how they work. Follow news and updates from trusted organizations such as the Federal Trade Commission, the Internal Revenue Service, and your local consumer protection agencies.
  2. Protect Personal Information: Never give out personal or financial information unless you’ve initiated the contact and you’re certain you’re dealing with a legitimate organization.
  3. Always Verify a Person’s Identity: If a friend or business asks for money online, call them directly rather than keep that conversation online. This simple tip could save billions of dollars each year.
  4. Use Secure and Traceable Transactions: When making payments, use methods that can be traced such as credit cards. Be wary of anyone asking for payments via wire transfer, prepaid debit cards, or gift cards.
  5. Secure Your Computer and Mobile Devices: Keep your computer security software updated. Use a firewall, anti-virus, and anti-spyware software. Make sure your internet connection is secure.
  6. Be Skeptical: If something sounds too good to be true, it probably is. Don’t be pressured into making fast decisions. Take your time to research the organization and the offer.
  7. Ask for Advice: If you’re unsure about an offer or a request for information, talk to someone you trust
  8. Report Scams: Report the scam to the FTC. Your reports help the FTC and other law enforcement agencies bring scam artists to justice and put an end to unfair practices.

Remember, staying vigilant and informed is your best defense against scams. By taking these steps, you can help protect yourself and your loved ones from becoming victims of financial fraud.


Our digital age is bustling with advanced financial scams. They pose a real threat to everyone, no matter their age or lifestyle. But don’t worry! By understanding these common scams and spotting their warning signs, you can actively protect your money and personal details. Knowledge is power, and we’re here to help you wield it effectively!

Remember, scam artists exploit fear, urgency, and trust to manipulate their victims. By maintaining a healthy skepticism, practicing secure transactions, and promptly reporting any suspicious activities, you can play a pivotal role in combating these illicit activities. Together, we can create a safer, scam-free financial environment for all.

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About the Author

Welcome! My name is Merilee and I’m the creator of Easy Budget. I started this blog to help other families like mine crush debt, budget, manage money, and meal plan like pros!

Everything you find here will be useful, motivating, and always easy. Need to contact me directly? Reach me here!

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