11.4 - Scams & Frauds

Which of the following is likely a scam?

• A hotel receptionist asks you to verify the first and last name on your hotel reservation before giving you the key

• You call your doctor’s office and the nurse asks for your medical record number

• The IRS calls you and asks you to make a tax payment in the next 24 hours

• You receive coupons through a monthly email you subscribed to for your favorite online shopping website

mAll of the following statements are true about scams EXCEPT…

• Young people are less likely to fall for scams than older people

• The number of reported scams has continued to increase over the past decade

• There are many types of scams including credit card scams, imposter scams, and more

• Scammers are taking advantage of modern technology and shopping trends to scam people

Ben realized they paid a scammer using a credit card. What is the next BEST step they should take?

• Wait for their next credit card statement to verify that the payment went through

• Attempt to contact the scammer to get them to reverse the transaction

• Shred their credit card and limit purchases for the next 10 days

• Call their bank and ask them to reverse the transaction and get their money back

Which of the following is a red flag for a pyramid scheme?

• A business stresses recruitment of new members over sales of a product  

• A business hires three new people for its executive team

• A business posts on social media to promote its new product

• A business pays its employees an annual bonus at the end of the year

What is the difference between a Pyramid Scheme and a Multi-Level Marketing Company?

• A Pyramid Scheme is legal whereas a Multi-Level Marketing Company is illegal

• A Pyramid Scheme does not sell a product whereas a Multi-Level Marketing Company does

• A Pyramid Scheme sells an actual product whereas a Multi-Level Marketing Company does not

• There is no difference between a Pyramid Scheme and a Multi-Level Marketing Company

What is a "Pump and Dump" scam?

• A scheme which pools investors’ money together but only a small percentage of the pool is actually invested

• A scheme that attempts to boost the price of a stock through recommendations based on false or misleading statements

• A scheme where an investor collects your money for investment but never actually makes a purchase and instead keeps the money for themselves

• A scheme that attempts to beat the overall market's return by investing in high-cost index funds

The IRS reaches out to you stating you owe additional money in taxes that must be paid immediately. Which action below indicate this is NOT a scam?

• The IRS has contacted you by email

• The IRS has insisted on a certain form of payment

• The IRS has threatened to have local law enforcement arrest you for not complying

• The IRS has contacted you with a formal letter

What is phishing?

• Phishing is a business model that recruits members via a promise of payments or services

• Phishing is a fraudulent attempt to obtain sensitive information such as usernames, passwords and financial information via electronic communication

• Phishing is a fraudulent attempt to take over or delete your presence on social media

• Phishing is a fraudulent attempt to deposit funds into an FDIC insured bank account for later use

Before accepting an investment opportunity, you should use FINRA's BrokerCheck to research your broker. What information is NOT available on this website?

• A background check

• Any complaint history

• An opportunity to request evidence that this broker is a sworn fiduciary

• A list of this broker's fees and profits

What are the two red flags that Frank Abagnale tells consumers to look out for?

• Urgent need for Money & Personal information

• Urgent need for Money & Unconfirmed email source

• Personal Information & Credit Score

• Ask for email address & home phone number