Being aware of financial fraud is crucial because it helps protect your hard-earned money and keep you on track towards your financial goals. When you can recognize the signs of fraud, you can protect yourself and loved ones from scams that can cost you hundreds or thousands of dollars. In today’s podcast, learn about the most common types of financial fraud to be aware of and how you can keep yourself safe.

Have a financial question for us? Email  [email protected]. Don’t forget to subscribe on Apple¹, Spotify, or wherever you get your podcasts.

Here’s the recap of today’s 15-minute episode: 

• Recognizing and avoiding payday loan scams
• How Earned Wage Access can help you avoid high-interest loans
• Staying ahead of phishing and cybersecurity scams 
• Stay vigilant to avoid check overpayment scams or an online overpayment scams
• Avoid identity theft through smart credit reporting and credit checks 
• Tax season-scams and how to see them coming 

Listen below or read the transcript that follows.

Eric Rosenberg:

Hello, welcome back to the show. This is a friendly reminder that today’s episode is intended for education and entertainment purposes only and should not be considered financial or legal advice. Thank you. Hello everyone. Welcome back to the Payactiv podcast. As always, I am your host, Eric Rosenberg, and today we have a very special episode. Like always we’re going to talk all about a financial topic and today’s topic is financial fraud. That is something that’s near and dear to my heart. I want to help you and anyone else you know avoid being targeted by scams, and if a scam does come your way, I want you to know how to avoid it. Today as a special guest, I will be today’s special guest. That’s right. I’m going to do this episode solo. We don’t have anyone else to bring on today because I care so much about this topic and it’s something I’ve researched a lot and I’m very knowledgeable on.

We’re going to dive into a discussion today on what you can do to stay aware of financial fraud and avoid becoming a victim. All right everyone, it’s time to dive into our discussion on different kinds of financial scams to help you stay aware and avoid them. First we’re going to talk about payday loan scams. Payday loans are something we’re passionate about helping people avoid, especially in the Payactiv community. That’s part of how the company came to be. Payday loans, if you’re not familiar, are a type of super high interest loan that targets usually lower income communities and they offer funds right away so you can get cash right now, but then you’re stuck in a cycle of debt. Oftentimes, these loans charge hundreds of fees annually. If you don’t know what percentages mean, go back and check our past episode where we talked about that.

We’ve had a lot of great episodes before, but if you can avoid those high interest payday loans, you’ll be better off for your financial future. No question. Some people might say payday loans aren’t necessarily a scam, but in my opinion, just about every payday loan is a scam. It’s just not a good financial product. It’s something you should absolutely avoid and check out our Earned Wage Access product, EWA¹, from Payactiv where you can get a portion of your paycheck early without taking out a loan. You’re just getting funds that you’ve already earned before payday. That’s a great way to avoid payday loans. Another scam that you might run into is phishing or cybersecurity scams. With phishing scams, that’s spelled P-H-I-S-H. It’s not like fishing, going out to try to catch a fish. With phishing scams, you will often get an email or a text message or even a phone call, asking you to click a link or give your personal information away.

If someone can trick you into giving away your bank account information or your credit card number or anything like that, then they can use those numbers to try to steal your money and that’s no good. So be very suspicious if you get an email or anything else asking for some kind of financial data or financial information. Also, if you get a phone call from someone who’s claiming to be your bank or your credit card company, even your utility company, they might say that they already know you, they already have information about you and they’re just trying to confirm your information or get more. That’s often not what’s really happening. That can be a kind of phone scam. Actually, one time I was refinancing my mortgage and I got a call from a company that I didn’t recognize, from a person who I didn’t know, asking for all this financial data to help approve my mortgage and I didn’t know who they were so I hung up.

I told them if they were legitimate, I would call them back on a public phone number and I called my mortgage company and asked, “Is this someone who should really be calling me? Is this someone who really needs my information?” So confirm that and if you’re ever in doubt, call back on a public number for that financial institution because that way you know who you should be talking to. Another scam that a lot of people run into these days is called a check overpayment scam or an online overpayment scam. In this kind of situation, someone will send a check to you or something similar, make a payment to you and they will overpay or they’ll say they overpaid and say, “Can you send back the extra amount?” You might run into this when trying to rent an apartment or on Craigslist, there’s lots of different places you could run into this type of overpayment scam.

They’ll say they needed to pay you $500 for something and then they accidentally paid 700, so you should take the $200 and send it back to them using a wire transfer or a payment service like Western Union. But when you deposit the original check for $700 in your account, it’ll bounce. That difference that you sent back is just a loss for you so be very careful of those there. A lot more common than you’d think. I actually ran into something similar when I was trying to rent an apartment one time. So beware, especially when you’re working with people you don’t already know. All right, another kind of fraud that you could run into is identity theft. So with identity theft, someone will use your information to open up accounts under your name so they could maybe have stolen your mail.

That’s a way people could get your information or come across a check that you’ve written and using the information on those documents, they can try to open up new accounts in your name and if someone’s able to get your social security number, which is likely public online if you’re an adult, there was a big scam, their big breach, a data breach a few years ago, of one of the big credit scoring companies and anyone who had had a loan or a credit card or anything similar to that in the last roughly 10 years, their information was leaked in that breach. Tens of millions of people. If somebody gets ahold of your social security number or personal information that way, it’s also a route to identity theft.

Ways you can avoid that and be aware of what’s going on is to keep close track of your finances always. There’s free credit monitoring services out there, you don’t have to pay. You can get your credit score from a handful of different websites and those websites and apps will also give you your credit report. So review your credit report and keep a lookout for anything you don’t recognize and if something you don’t recognize shows up, contact the credit reporting agency and then the company who put that on your credit report right away to let them know it was identity theft and they can close the account. You can also lock and unlock your credit report. What happens when you do this?

Remember there’s three credit reporting agencies, you have to lock it with all three. If someone including you tries to open up a new credit account while your account is locked, they won’t be able to. You can unlock your credit for a number of days if you’re planning to get a new loan or a new credit card or something like that. But otherwise, keeping your credit locked prevents a lot of the negative that can happen from identity theft and identity schemes so be careful there. Also, I briefly mentioned credit monitoring. The credit monitoring services will send you an email or a text message, some kind of notification whenever there’s a major change to your credit. When you apply for a new account or open a new account or close an account or your balance has a major change up or down, you might get a message alerting you and those messages will help you know what’s going on so you can act quickly before the situation gets out of control.

Another scam to be aware of that usually happens more during tax season so between January and April, that’s the biggest tax season of the year. There’s companies or people who will offer you a large guaranteed tax return and these scams, someone will try to say they’ll do your taxes and get you this huge refund from the IRS, and once you pay them to do your taxes, they will disappear. They won’t be there anymore. Not only have you lost money because you paid the scammer, you also have to then go back and still do your taxes and there’s no way anyone can guarantee that you’ll get a specific refund amount or tax return. There’s only one accurate answer when you do your taxes every year. Whether you use accounting software or hire an accountant to do your taxes, there should only be one answer for what your refund is.

There’s no tricks that you can do to get a higher refund, otherwise you’d be scamming the government and that’s against the law so we don’t want to do that. Another type of scam you might run into are from debt relief and credit repair companies. These companies will make big grand promises kind of like tax scams saying that they can fix your credit right away or get you out of debt right away and they’ll do so after charging this big upfront fee. Oftentimes, these companies don’t have the ability or the power to do what they say they’re going to do. If you want to work with a debt relief company or a credit repair company, there are some legitimate ones out there, but in most cases it’s all stuff you can do yourself. You don’t have to pay anyone extra to help you through these situations. So be very savvy and aware of who you’re working with if you are reaching out to a company about debt relief or credit repair.

And if someone reaches out to you offering you one of these services, it’s probably a good idea to go the other way and not work with that company because they’re probably not working with your best interests at heart. Another common kind of scam you might run into is called a utility scam. Utility scams happen when someone poses as a utility worker claiming that a payment is late or overdue and the service will be shut off unless you make an immediate payment. Now, anytime someone says you need to pay immediately or quickly and tries to put a lot of pressure on you, you should put your alert ears and eyes on. Most companies, most legitimate companies will not say, “We’re going to turn off your power unless you pay us right away,” or, “We’re going to turn off your water or internet unless you pay us right away.”

Usually there’s a series of notices and they have a big procedure to do that. If someone calls you or shows up at your home saying that you need to make a payment right now or your service is going to be disconnected, it’s probably a scam. If in doubt, just like when we were talking about phishing by phone or email phishing scams, if you don’t think that something sounds right, call a public number for that utility company and talk to someone in the customer service department there and they can verify what’s going on with your account. Someone showing up at your door is probably just looking to get money from you. Now, another just general thing to be aware of when you’re looking at all different kinds of scams is how people or companies ask for money from you. Now, there’s a lot of different scams targeting elderly people or people with less education saying that they need to maybe pay their taxes right away and they need to do so using gift cards or prepaid cards.

I promise you the IRS does not want prepaid cards. The IRS does not want gift cards. They do not want Apple gift cards or PayPal cards, nothing like that. If you are told that you need to give someone money using one of those methods, it’s a scam. You should just hang up the phone and not continue the conversation. Legitimate companies and government agencies want to be paid by check or electronic payments. They’re not going to use something you buy at the grocery store. Let’s be real there, right? All right, so there’s a big rundown of the most common types of scams to know about, but I want to go back to phishing scams one more time. Because they’re so common and they’re so prevalent. It’s easy for a digital bad guy to go onto your social media accounts and get information about you and call you up or email you or text you saying that they know you and they’ll share all this information about you and they’ll try to say they want to fill in the gaps for whatever reason.

Always be on alert. If you get a call or an email from someone you don’t know, never click a link on an email that you don’t recognize. If you get an email that says it’s from a company that has spelling or grammar errors in it or the logos don’t look right, that could lead you to a virus or some way that someone will try to break into your computer to do no good. Also, look, when you get an email that says it’s from a company, you can look up at the top and double check that the email came from an address that’s truly from that company. For example, there’s PayPal scams. If you get an email that says it’s from PayPal, before you click any links, look up at the from address and it should be [email protected]. If it’s from any other address or if it’s misspelled, sometimes the scammers will do something like pay-pal or something like that to try to get you to believe that it’s from that company.

But if you are alert and aware and check for those little details, you can save yourself a huge amount of stress and potentially money down the road. That’s all for our discussion today on different scams and types of fraud to be aware of. I know that was a big list. Scammers can be scary, right? There’s a lot of ways people will try to go after you to steal your money or to steal your identity or to separate you from your hard-earned paychecks. But at the end of the day, if you make it harder on them, they’ll probably move on to someone else. You don’t always have to be perfect in what you do to avoid scams, but if you take really good common steps, follow good digital security best practices. That means using a unique password on every app and every website. Don’t have the same password on lots of websites.

Keep your phone and computer updated. If you get a message in your phone from Google on your Android or from Apple on your iPhone that’s legitimately from those sources, do your updates right away because those are fixing security loopholes or security bugs that someone might try to use to get into your device. Again, at the end of the day, they’re trying to steal your money so keep your devices updated. That’ll also keep you safer. If you are out using public wifi, you should try to use a VPN. That’s a virtual private network app that will encrypt your data. Otherwise, you definitely should avoid doing anything involving banking or finance while you’re connected to that public wifi because someone could be trying to get into your information. Those are just a few more cybersecurity tips that can help you stay clear of scammers and fraudsters.

That’s all for this discussion and my interview of myself. We’ll be back next time with a regular interview with a regular episode, just as normal with a guest on an important topic to help you manage your finances. All right, well I hope you enjoyed that interview with myself. We’ll be back next time with a regular interview just as usual. If you found this episode valuable and learned something new, be sure to share that. You can share the episode with a friend or a family member or just talk to them about financial fraud and what they can do to stay safe. Because it is so prevalent, people lose so much money when they don’t need to. Also, note that Payactiv protects its members in two different ways from financial fraud. One, we talked about avoiding payday loan scams already in today’s episode.

If you are thinking about borrowing money for a short-term need, definitely check out Earned Wage Access from Payactiv. That is a way that you won’t have any interest due. There’s no loan to payback and you can get a portion of your paycheck early. Also, if you use the Payactiv Visa^® Ccard* and have your paychecks directly deposited into your Payactiv account, you’re protected by FDIC insurance that’s worth $250,000. If something goes wrong with the bank behind the scenes, you are still protected and the government will be there to make sure you walk away whole with all of your money. If you’re not already, check out the Payactiv app² in your app store for whatever device you use to get started. We’d love to have you there and thank you so much everyone, for listening. Till the end, we’ll talk to you next time. Now, get on out there and live the life you’ve earned. Bye-bye.

¹ Earned Wage Access requires employer participation. Employees can only access a portion of the wages they have earned to date.

² Standard data rates from your wireless service provider may apply.

*Central Bank of Kansas City does not administer, nor is liable for earned wage access. The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll free at 1 (877) 747-5862, 24 hours a day, 7 days a week. 

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