Scammers are getting smarter. Here are their most common tricks

Recent Federal Trade Commission data shows American consumers lost more than $10 billion to fraud in 2023 — the highest total ever recorded. And with fraudsters constantly switching their tactics and using AI to make their schemes more convincing, it’ll only get harder for consumers to spot red flags. 

“Scams vary in scale and process, but all result in the victim's participation in a fraudulent operation,” said Alexander Hall, a former fraudster and trust and safety architect at Sift. “Typically, these operations are used to extract value in four forms: identity information, account information, payment information and authorized payments.” 

As technology advances, so do the tactics scammers use to exploit unsuspecting victims. Here are some of the most popular financial frauds to watch for.

Most common financial frauds  

AI-driven impersonation. With AI-driven impersonation scams, fraudsters use artificial intelligence to create highly realistic fake audio or video messages to impersonate trusted individuals or organizations.

“These deepfake scams can convincingly mimic voices and appearances, deceiving victims into transferring money or divulging sensitive information,” said Pete Nicoletti, Check Point's global chief information security officer for the Americas. “Plus, the sophistication of AI makes these scams increasingly difficult to detect.” 

Phishing emails and messages. A phishing scam is when cybercriminals send emails or messages that appear to be from legitimate sources, like banks or reputable companies, to make the recipients click on malicious links or provide personal information. “These phishing attempts often create a sense of urgency so that they could pressure individuals to act quickly without verifying the authenticity of the request,” Nicoletti said. 

Investment and cryptocurrency scams. These scams are on the rise, with fraudsters taking advantage of people looking for quick and easy profits. According to the 2023 Cryptocurrency Fraud Report by the Internet Crime Complaint Center, losses from cryptocurrency-related investment fraud schemes reported to the complaint center rose from $2.57 billion in 2022 to $3.96 billion in 2023. 

With these types of scams, fraudsters will promise you high returns on investments, particularly in emerging markets like cryptocurrencies. “They may use fake platforms or impersonate financial advisors to gain trust,” Nicoletti said. “Once victims invest, the fraudsters disappear with the funds, leaving investors with significant losses.”

Tech support scams. Tech support scams happen when fraudsters pretend to be technical support representatives from well-known companies, claiming that your device is compromised. “They’ll persuade you to grant remote access to your computer or to pay for unnecessary software or services, which could lead to serious financial loss and potential identity theft,” Nicoletti said. 

Romance scams. “Romance scams have become the quintessential con, wherein a bad actor manipulates their target into establishing a digital relationship via phone calls, video calls, text messages and more,” Hall said. “Once trust has been established, the bad actor claims to need money and coerces the victim to send funds.”

According to the FTC Consumer Sentinel Data Book, reported losses to romance scams totaled $1.14 billion in 2023, with the median losses per person being $2,000 — the highest reported losses for any form of imposter scam. 

So if you’re an avid online dater, be extra careful of these types of deceptions. 

Red flags to watch for

Jacob Kalvo, a cybersecurity expert and founder and CEO of Live Proxie, says there are a few giveaways that you might be dealing with a financial scam. If a message feels rushed, has slight inconsistencies or comes from a sketchy-looking email address, you’ll want to proceed with caution.

“If it’s a deepfake scam, you’ll often notice subtle irregularities like lip-sync mismatch, unnatural pauses while speaking and weird facial movements. You can catch these by analyzing the video frame by frame,” he said. “And even though AI is building grammatically perfect phishing emails, most still have very minor inconsistencies in tone, strange URL patterns or attachments demanding immediate downloads.” 

How to protect yourself 

The most straightforward way to become less susceptible to online financial fraud is to think before you click. “If you get an email or text claiming there's an urgent issue with your bank account, a package delivery, a prize you’ve won or a service you use, don’t click on any links,” Nicoletti said. “Instead, visit the official website directly by typing the address into your browser.” 

You'll also want to take concrete steps to protect your accounts. Start by creating strong and hard-to-guess passwords for every site. Yes, it’s annoying to remember multiple passwords, but using the same one everywhere makes you an easy target. To make your life easier, Nicoletti suggests installing a password manager on your device to store your passwords securely. 

For added security, you’ll also want to enable two-step verification on your important accounts. “Just make sure your phone can receive text or email alerts for password changes,” Nicoletti said. 

And if you’re asked to set up security questions when you create an account online, don’t use obvious answers. Instead, Nicoletti recommends using unrelated answers to make it harder to guess. For example, if the question is "where were you born?" make the answer something like "green," so that fraudster will be less likely to guess it right since it doesn’t make sense. 

Ways to boost your online security

Nicoletti also recommends taking the following steps to strengthen your online protection:

• Set up alerts on your accounts to notify you of changes
• Visit HaveIBeenPwned.com to see if your email or passwords have been leaked in a data breach
• Install antivirus software like ZoneAlarm and scan your devices routinely
• Use a VPN when browsing online to keep your connection private
• Change the default password on your home router and make sure your Wi-Fi uses a strong password
• Never provide sensitive information like Social Security numbers or banking details over email, text or social media messages
• Use fingerprint, PIN or facial recognition on your mobile devices
• Use incognito mode when browsing sensitive sites
• Enable pop-up blockers to prevent malicious ads from appearing
• Avoid storing passwords directly in your browser

Falling victim to financial fraud can be extremely devastating because it undoes years of your hard work and savings in an instant. So, if you haven’t already, take some time to go through the steps above to safeguard your finances. 

And remember: If something sounds too good to be true, it probably is.