Protect Yourself from Financial Scams: Expert tips to safeguard your money and identity

Financial fraud impacts people across the world. The internet is rife with warnings about the dangers of handing out personal information and the utmost importance of protecting accounts and passwords.

Even so, Federal Trade Commission reports show American consumers lost increasingly large amounts of money to financial fraud over the last few years — $1.9 billion in 2019, $3.3 billion in 2020, $5.8 billion in 2021, $8.8 billion in 2022 and a staggering $10 billion in 2023.

Wade “Pee Wee” Bartels, president and chief executive officer of Alliance Bank in Cape Girardeau, said cybercrimes — committed by individuals, often from other countries, working in organized groups to steal information and money — can place extreme emotional and financial burdens on anyone who is a victim of them. Bartels said both consumers and businesses are susceptible to financial scams. His bank deals with fraud of this kind every week.

A common tactic for scammers is to gain the trust of victims so they can take advantage of them later. Often, but not exclusively, targeting the elderly, looking for emotional hooks to connect with people. Bartels said scammers often pose as love interests or friends from the past.

“They think they have a relationship with the person they’re talking to, sometimes on the phone, many times through social media. They convince them over time to start sending money. It typically starts with small requests of some kind and then grows from there,” he said.

Contact is always unexpected and unsolicited, Bartels added. People impacted by fraud often say they found the interactions odd but still convincing.

“They’re typically going to require some kind of personal info … but many times they’re now asking for bank account information: usernames, passwords, security codes, that kind of thing, which obviously a bank would never ask for.”

Scammers also ask for unusual forms of payment, such as gift cards or cash.

“Many times they will ask you to go to your bank, get cash out, and go buy gift cards from various retail stores … something generalized that can be used for a lot of different things,” Bartels said.

Check fraud is also common, with checks stolen from mailboxes and either changed or copied to make a new check with different payees.

“We’re seeing [check fraud] a lot and that is a huge risk for any kind of commercial customer that is writing and mailing a lot of checks,” Bartels said.

Fraud has more of an impact than just stealing money from unsuspecting businesses and individuals. Bartels said it actively harms the communities they reside in.

“That money is gone. It’s no longer in our local communities where it stays and goes into local businesses … all of that economic activity is stopped because those dollars have left our communities,” he said.

Bartels trains employees on common red flags, so they can educate their bank’s customers. He said people have to have their radar up for unsolicited contacts and they should reach out to local law enforcement and bankers, especially if they have given out information. Bank personnel can help them through the process to determine if they have been scammed.

Many financial scams go unreported because the victims are embarrassed they fell for the scam. Bartels said it is important not to be embarrassed and to work with banks to find a solution quickly.

Safety from a security standpoint

Nathan Littlepage is the owner and sole employee of the Scott City-based Quantitative Network Solutions. Having worked in the internet service provider industry for more than 30 years, he has accrued clientele from across the country. His business teaches other business owners how to keep their companies safe from online scams and cybercrimes.

“Information is information, and that’s what everybody is after,” he said. “… They like to do the trick where there’s a problem with your computer, it has fraudulent software, then they get you to install some remote desktop-type application that allows you to gain access to your system, and from there, they’re able to pull data.”

Fraudsters could open up accounts of their own using any information given to them, he said. Phishing attacks do not have to come from blatant emails or messages. Even completing online surveys that ask for any kind of personal information to submit could lead to that information being shared.

Littlepage said it is important for individuals to make sure their technology — laptops, phones and the like — is properly updated and equipped with software to detect malware.

“I’m not going to talk about CrowdStrike and their little update that took down the internet, but 99.9% of updates are a good thing because what it indicates is the software has found flaws and security risks that could potentially leave you open,” Littlepage said. “By patching your systems or updating your iPhone, you are eliminating some of those. You are not just getting features.”

He said people should also archive and back up important information and ensure it is not shared with people who do not need to know it.

“It’s just a sad fact, but a lot of government agencies aren’t equipped to handle the small stuff. That's why people get taken for $700 or $1,000. [In regards to cybercrime] it’s small change, but if people are racking in 10 people a day that's $10,000,” Littlepage said.

The FBI does not get involved in recovering stolen funds unless the amount stolen is over $100,000, he added. He recommends people who have been victims of cybercrimes contact their banks or other financial institutions to try to recover their money.

Littlepage said businesses are also at risk if they do not keep their company’s information secure.

“A business is actually a physical entity that hackers may use to gain access to their physical network,” he said. “They might sit around and wait and fish around to see what they see, whether it’s financial records, whether it’s accounts.”

Littlepage said some hackers even target banks directly instead of consumers. They can hack ATMs by inserting flash drives that infect them with malware to force them to spit out money.

“What people need to understand is these organizations are not people in black hoodies sitting in their mom’s basement hacking away. No, these are organizations that take years and will dissect things,” Littlepage said. “A lot of them come from government agencies prior, and they’re in it for the money.”

Like Bartels, Littlepage recommended people who think they have been victims of financial fraud to contact their local banks and see if they can resolve the situation. He said they are among the best resources available to recoup losses and hopefully bring perpetrators to justice.