How to avoid falling victim to financial fraud from telephone scams

September 25, 2012 11:03 am

Some telephone scams are so overt and obvious that it’s unbelievable the con artist would even give it a try. “A Nigerian prince wants to give me $10 million? I just have to tell this stranger my bank account number over the phone and I’m made for life? Bonus!” Few people would fall for such a scam – and unfortunately, the majority of telephone scams are not nearly as easy to detect. How do you sort fraudsters from genuine callers? This article will explore some warning signs that the person on the other end of the phone isn’t being honest.

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They fail to ID themselves
Cold-callers are obliged to identify themselves before pitching a product or service over the phone. Failure to do this should be your first warning sign that a scam is on the way. If the caller does not provide their identity, pepper them with questions that they should be able to answer. What’s their name and job title? Who do they work for? Where is the company based? What’s the url for their website? What’s the phone number for their customer service centre? Scammers typically can’t answer many of these questions, and may hang up if you prove too tenacious.
What they offer is too good to be true
This is particularly predominant with over-the-phone credit card offers. A company will call you up and happily inform you that you qualify for a new line of credit. No limits, no credit history check needed, you just need to submit some of your personal information and we’ll send the card right away, thank you very much. Every financial transaction comes with some sort of catch, and actual companies who are looking to earn your trust will admit to the catches after a bit of conversation. If an offer sounds like a dream wrapped in a paradise, it’s a scam.
They try to hurry Through a transaction
Scammers know they’re one motion away from their plan falling through, so they’ll rely on fast-talking to push the conversation along to its desired conclusion. If you can’t get a word in, or if they ignore your questions and continue to spin out their proposal at supersonic speeds, hang up.
They offer something free, then ask for money
to ignore. Even if you’re told you’ll get your money back after you provide your information, remain wary – you’ll probably never see that cash again.
They claim a family catastrophe, then ask you to wire money
This scam is often used on the elderly, and plucks at the heartstrings. The scammer will pretend to be a family member, say they’ve been implicated in something illegal – Driving Under the Influence is a favourite – and then tearfully ask that you send along money to make bail. The scammer will know just enough information to pull off a superficial impersonation, and may employ a second scammer to make the call seem more officious. Even if the scammer sounds like a family member, treat monetary requests with skepticism and attempt to verify their story before sending along money. This can be done by asking pointed questions that only the legitimate family member could answer.

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They ask for personal details
Financial transactions over the phone usually do require some amount of disclosure on your part, but you should only give out such information when you’ve confirmed that the receiving company is legit. Never give out banking or personal information over the phone unless you know and trust the second party, and even then it’s not a great idea. This fact alone works as a handy warning flag against individuals who claim to be accredited institutions: for example, a bank will not ask for your card number or PIN, simply because they already have all the information they need on their databases to identify you.
They call at all times of the day
Many companies have call centres in different time zones which may pester customers well into the evening. Even so, at least in the United States, telemarketing companies are legally obliged to call between 8 am and 9 pm, and no time before or after. Failing to do so is a breech of FCC rules. Anybody who calls after business hours should be regarded with suspicion – and if it is a legitimate call, the company should probably be reported for breaking the rules.
The last way you can tell if you’re being scammed? The request doesn’t feel right. Maybe it’s the way the person talks, or the words they use, or the pitch they’re offering, or maybe even sounds in the background. Your brain will pick up on these little clues even if you don’t register them at first, and your gut reaction will tell you how to respond. Trust your instincts. Even if the phone call was legitimate, you’re safer rejecting the offer and missing out on an opportunity than accepting the offer and losing a bundle of money.

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