Author: Emily Guy Birken / Source: Wise Bread
We tend to think of financial fraud as a retiree problem. After all, older adults are more likely to be sitting on a large nest egg and are often resistant to getting financial help from others for fear of losing independence. Both of those traits make them tempting targets for scammers and con artists.
However, just because scammers traditionally like to hit up Nana and Poppy does not mean that young adults are shielded from the problem. In fact, according to a recently released Federal Trade Commission study, more adults aged 20–29 reported losing money to financial scams in 2017 than did any other age group. The study found that 40 percent of adults in their 20s lost money to fraud, as compared to only 18 percent of people over the age of 70 — although the median amount lost was lower among 20-somethings than among the elderly.
We’ve done a great job of helping to alert older adults to the dangers of financial fraud. Now we need to make sure everyone else also knows what they need to do to steer clear of scams. Here is what you need to know about protecting yourself from financial fraud.
The most common types of fraud
Of the types of fraud reported to the FTC, the three most common scams were debt collection (23 percent), identity theft (14 percent), and impostor scams wherein the scammer pretends to be either a government official, a loved one in trouble, or someone else the victim knows (13 percent).
Although debt collection was the issue most commonly reported to the FTC, impostor scams were the type of fraud that cost victims the most money.
Consumers reportedly lost $328 million total in 2017 to this type of scam.Each of these types of fraud requires a different protection strategy, and savvy consumers should use all of these approaches to make sure they are covered in case of any type of fraud.
1. Know your debt collection rights
Getting a phone call from a debt collector can be nerve-wracking for anyone, and debt collection scams rely on your natural fear of financial consequences. The best way to avoid becoming a victim of such a scam is to know your rights as a borrower. According to the Consumer Financial Protection Bureau, any debt collector who contacts with a claim that you owe payment is required by law to tell you the following information:
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The name of the creditor.
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The amount you owe.
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The fact that you can dispute the debt.
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The fact that you can request the name and address of the original creditor if it is different from the current creditor.
If a debt collector doesn’t provide this information when first contacting you, he or she is required to send you written notice that includes this information within five days of that initial contact.
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