Scams come in all shapes and sizes. Some arrive by mail, while others arrive by email or a telephone call. Regardless of the method used by the scammer the intention is always the same – to scam you.

In today’s digital age, scamming methods and techniques are becoming more and more sophisticated. Scammers today have greater access to information on their targets as well as tools that permit them to quickly modify their scam to avoid detection. There have been reported scam calls where the caller provided the target with his social security number and other sensitive information to convince the target it was a legitimate call. So how can you defend yourself against a scam? Look for the three red flags of a scam.

Regardless of the method used, all scams use the same elements to get between you and your money or your information. The three red flags of a scam include:

  1. Sense of urgency. You must do it now. You do not have time to call back or ask for outside help.
  2. A consequence for not complying. If you do not do it immediately, you will be arrested, or your account will be closed or suspended.
  3. Demands a specific form of payment or type of action. Payment, most often, is requested in the form of gift cards. Actions often include clicking a provided link or calling a provide telephone number. You will not be permitted to pay with any other form of payment. You will also not be permitted to call another telephone number or log in directly to your account from the main website. The scammer wants you to use their specific link or telephone number.

The first goal of the scammer is to catch you off guard and make you panic, accomplished by establishing a sense of urgency followed by a threat for non-compliance. Let’s look at the common IRS imposter telephone scam. The caller claims to be from the IRS and states that the target owes money. If the target does not pay immediately she will be arrested, or a warrant will be issued for her arrest. The target’s first reaction would be fear and panic. When a body encounters a threat, blood starts pumping to the extremities in a “fight or flight” response resulting in less oxygen to the brain, and not thinking clearly. If the target would dare question the caller or the validity of the call the caller will become verbally abusive or increase the threat. If the target were to say that she needed to speak with her accountant before taking any action the caller would say that if she hangs up they (meaning the IRS) will impose fines and penalties which will double or triple the amount owed. However, if the target pays now they will waive the fine and penalties.

The threats continue until the target agrees to pay the money supposedly owed to the IRS. The target might offer to pay by check, but the caller says that is not permitted. The target must pay immediately. The fastest way to pay them is with gift cards. Right now, you might be saying to yourself “the IRS does not take gift cards, who would fall for this?” Remember, the target has been taken off guard and threatened. She is now if “fight or flight” mode and is not thinking clearly. The caller tells the target that he will remain on the telephone while the target drives to the store and purchases the gift cards. Once the gift cards are purchased, the caller will ask for the gift card numbers along with the activation code. As soon as the caller has these he has the money.

Actual Scams

Let’s look at the following scams- all of them have the three red flags of a scam.

1. You receive a call from the Social Security department stating that your social security number is associated with criminal activity. They understand that you did not commit the crime. However, to avoid arresting you or issuing an arrest warrant, you need to pay for them to resolve the issue. You must pay them with Google Play gift cards.

2. You receive a call from a relative claiming to be in trouble. He needs your help, a.k.a money, or he will go to prison. He sounds funny because he was in an accident or fight and broke his nose. You must send money to his attorney or the jail or the courts, or he will be taken directly to prison. You must pay by gift cards.

3. You receive a call from the FBI stating that your address is under federal investigation. If you don’t immediately return the call, a warrant will be issued for your arrest. The voice is computer-generated. Side note, since when, do law enforcement agencies call and warn people that they are under investigation? They don’t. This is another red flag. If you return the call you are told that you must pay the fine or fee to resolve the case and avoid arrest. The amount due must be paid with gift cards.

4. You receive a text message from your bank stating that there is an issue with your account. If you do not click the link or call the provided telephone number immediately, your account will be closed or suspended. Side note: this one does not ask for money. The goal here is to obtain your login credentials or other sensitive information.

5. You receive an email from your credit card company saying that you have requested to reset your account password. If you did not do this then you must, immediately, click the link or call the telephone number provided in the email. Side note: these phishing emails are very similar to legitimate emails. The only way to truly tell the difference between them is to either log in to your account at the main website or call the main telephone number on the back of your credit card.

Three Simple Red Flags

The above are just a few examples of scams used to get between you and your money or information. Every one of them had the same three red flags of a scam:

  • A sense of urgency
  • A consequence for not complying
  • Demands a specific form of payment or action

The point is, regardless of the type of scam or the method used by the scammer, these three red flags always remain. Remembering these three red flags is easier than trying to remember every type of scam.