Current Fraud Alerts and Scams
This forum is used to provide insight into various fraud schemes and tips regarding the action that you can take if you fall victim to such schemes.
Information provided by investigative authorities and resources, as well as investigations handled by Principal Financial Group, have identified the following as some of the most common fraud schemes impacting the insurance and financial services industries and the general public. It’s important for you to have an awareness of these types of fraud schemes so you can take preventative measures to secure and protect your information and to avoid falling victim to such schemes:
Know your financial advisor
Have you received an invitation to a “free dinner” from a financial advisor? If you accept these types of invitations, you should know that a majority of these seminars include a sales or marketing presentation. These types of seminars can be educational and helpful, but a small number of these types of invitations can include fraudulent intentions or high pressure sales tactics. It’s important to keep the following in mind when attending one of these meetings to avoid someone taking advantage of you and to protect your investments:
- Before attending, do some homework to ensure the person presenting is properly licensed or registered (FINRA’s BrokerCheck or the SEC’s investor.gov website are good resources).
- Be wary of anyone who promises guaranteed or exceptional rates of return with no risk, or the same high rate every year with no fluctuations.
- Do not be pressured to have ongoing meetings with the advisor at your home.
- Never make an investment decision at one of these events. Take the time to fully review the information and make informed decisions.
Common IRS impersonation scams
The IRS has issued alerts warning taxpayers to stay vigilant against increased IRS impersonation scams. The IRS has seen an increase in “robo-calls” where scammers leave urgent callback requests through the phone. Once individuals call back, the scammers ask for their personal identifying information (such as social security number or date of birth) and may use this information to steal their identity. Below are some examples of varied tactics used by the scammers:
- Demanding payment for a “Federal Student Tax.”
- Demanding immediate tax payment for taxes owed on an iTunes or other type of gift card.
- Soliciting W-2 information from payroll and human resource professionals.
- “Verifying” tax return information over the phone.
- Pretending to be from the tax preparation industry.
Since these bogus calls can take many forms and scammers are constantly changing tactics it’s important to know telltale signs to avoid becoming a victim. Keep in mind that the IRS will never:
- Personally call you to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
- Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for failure to pay your taxes.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
- Require you to use a specific payment method for your taxes, such as a prepaid debit card, gift card or wire transfer.
- Ask for credit or debit card numbers over the phone.
Identity theft happens when a third party uses your credentials (such as your name, address, date of birth, social security number, passwords, etc.) to assume your identity and perform fraudulent transactions or other criminal acts without your knowledge or consent.
You can minimize your risk of identity theft (and related monetary loss) by taking personal steps to keep your credentials, account/policy information, usernames, passwords, security phrases and PIN numbers secure at all times. Regularly checking your credit reports and account/policy statements can help you spot problems early and address them quickly.
If you identify unauthorized financial transactions, be sure to report them to your applicable financial services company, bank, insurance company, credit card company, or other applicable entities as soon as possible. You may also find it necessary to report the situation to law enforcement and to contact the credit bureau for further assistance. For additional helpful tips regarding this topic, you may want to refer to the Federal Trade Commission’s website or your local Attorney General’s or Fraud Bureau’s website.
State judicial branches have received reports of a jury scam in operation throughout the country.
In the scam, the perpetrators call the victim and falsely claim to be from the local sheriff or police department wanting to verify the victim’s home address. The caller then informs the victim that there is a warrant for his or her arrest for failure to appear for jury service. The caller gives specific amounts owed to the courts and instructs the victim to get a money order or risk being arrested. A variation of the scam involves notices sent to the victim stating that there is a warrant for his or her arrest for failure to show up for jury duty.
The public should be aware that phone calls and notices like these are fraudulent. People who fail to appear for jury duty are not contacted by telephone. Also, law enforcement officers do not collect fines and fees. Typically, fines and fees are collected by the local clerk of court’s office.
Contact your local law enforcement agency to report the receipt of these types of calls and written notices.
Lottery, sweepstakes and other advance fee schemes
Perpetrators of these schemes typically use the name and logo of a well-known entity on correspondence or checks associated with international lotteries, sweepstakes and loan scams.
Red flags associated with these scams
- The recipient of the correspondence did not enter a drawing, lottery or sweepstakes or request a loan.
- Multiple entities are mentioned in connection with the lottery, sweepstakes or loan and the entities typically are not affiliated with such prize giveaways or loans.
- The correspondence contains misspelled information or poor grammar.
- The correspondence directs the recipient to send money to an international location so they can claim their prize money (typically if an individual wins something legitimately, they are not required to pay any up-front processing fees).
What you can do to handle these situations
- Avoid sending any up-front fees. With a lottery or sweepstakes, you should not be required to send money in order to receive money that you have won.
- Avoid cashing or depositing any checks associated with these scams. Such checks are typically fraudulent and will likely cause problems with your bank, credit union or check cashing facility.
- Even if you do not fall victim to the scam, you may want to consider reporting the scam to the Consumer Services Division of your local Attorney General’s office.
Phishing schemes/Telemarketing fraud
There are times when you may receive a cold call from someone you don’t normally conduct business with offering you a product or service or indicating that you need to take immediate action regarding one of your existing accounts or policies. While many of these types of calls are legitimate, you need to be careful about situations where the caller indicates that you need to provide information or money before they can assist you. They may also pressure you to act right away or the offer won’t be valid. Some of these types of situations can be attempts by the caller to misrepresent who they are, steal your information/identity, and receive money under false circumstances.
Always be cautious when you receive an unsolicited call and the caller asks you to provide personal identifying information or an immediate payment. If you are not sure that the call is legitimate, ask the caller for their name, the name and location of their employer, and phone number and indicate that you will call them back (if they are calling for legitimate reasons, the caller should be willing to provide you with this information). This will allow you time to research the information provided in the call to validate their request.
Suspicious calls at work
Be cautious when receiving phone calls at the workplace from callers who claim to be people in positions of authority such as a company executive, a regulator, or an employee asking questions about the company and its employees. Sharing proprietary information or employee data can help a fraudster commit fraud against the company and result in risk to the company’s reputation.
It is important to recognize red flags. Social engineers attempt to deceive people into sharing personal and business information through a variety of methods. Some red flags to be aware of and watch for are:
- Won’t provide contact information or a callback number
- Asks a lot of questions or “plays dumb”
- Name drops
- Is very emotional (angry, crying, etc.)
- Says it’s an emergency or the matter is urgent
Updated August 2017