Avoiding Fraud Schemes

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If automobiles had been around in 1876, there is a chance Alexander Graham Bell would’ve received a call asking about his vehicle’s limited warranty shortly after inventing the phone. When Tim Berners-Lee invented the internet, odds are a Nigerian prince immediately emailed him requesting money in exchange for a shot at the throne. Fraud is sadly nothing new.

Now, in 2021, with unprecedented access to new technology and the internet, the way scammers are operating has evolved. Fraud attempts have gotten more intricate and harder to identify. Because of how creative fraud schemes are becoming, it is critically important to stay informed and cautious in an effort to guard against bad actors who are looking to get your information.

Our Risk Management team is constantly working to ensure our member’s safety and confidentiality. While they mostly function behind the scenes, they are always operating with your best interest in mind. Through their various external partners, the Risk team has pulled together some of the common scams we know our members could potentially encounter.

Family Emergency Scams

If you suddenly find out that a loved one or close family member is in an emergency situation and needs money, your instincts will likely lead you to act first and ask questions later. Individuals looking to commit fraud understand this, and look to take advantage of that fact. They will call or text you informing you that someone close to you is in jail, or needs money for an emergency medical situation – assuming that you will just send the money without questioning it.

Romance Scams

With the rise in online dating, there are frequently instances in which you could be in communication with someone for an extended period of time without having ever actually met them in person. While this scenario doesn’t always lead to fraudulent activity, there are times when that person could ask you to send them money via wire transfer so they can travel to meet you or get home to a loved one.

In romance scam scenarios, fraudsters are hoping to prey upon your good nature for either a one-time payday or potentially something much more long term. It may be hard to believe that something like this could go on for a lengthy amount of time, but in 2014, an Indiana woman ended up losing more than $150,000 to an online dating scam.

Money Mule Scams

The United States Postal Inspection Service is warning consumers against money mule scams.  According to the USPIS, money mules are people who receive and transfer money illegally obtained from victims of fraud. Money mules can be unknowingly recruited in a myriad of ways.

Work-from-Home Scams

Scammers post a fraudulent job ad promising easy money in exchange for reshipping packages, buying gift cards or money orders, or transferring money between different accounts. Because of the COVID-19 pandemic and the many people looking for jobs, these types of scams are on the rise.

Lottery Scams

A person informs you that you need to transfer or accept money in order to collect a prize or monetary winnings. If you play the lottery frequently or participate in a lot of community events that involve raffles or auctions, this could seem like a legitimate offer, but it is important to remember reputable organizations would never need you to transfer money on their behalf.

Romance Scams

Similar to the romance scams above, this type of money mule scam involves a person you’ve only met online or through a dating app asking you to transfer money or packages for them. While they are not taking money directly from you in this scam, they are using you to help essentially launder money they have taken from other victims of fraud.

The USPIS also reminds people that transferring money or other valuables on behalf of people you don’t know usually only benefits criminals. On top of that, falling prey to a money mule scam could also lead to serious legal consequences for you. For more information or to report a potential money mule scam, visit uspis.gov/money-mule or call 877.876.2455.

Tips for Preventing Fraud

We have recently been hearing from members that there has been an increase in individuals working to impersonate us or other financial institutions in an effort to gain sensitive information. Your security is our primary concern. Unless you initiate the conversation, Michigan First will never contact you via phone, text or email and ask for any of the information below:

  • Passwords
  • PIN number
  • CVV (three-digit code on the back of the card)
  • Full debit or credit card number
  • Full social security number
  • Full account number

Additionally, we have pulled together some very high-level tips that we hope you will keep in mind. These may seem obvious, but unfortunately, scam artists understand exactly how to trick people into giving them their hard-earned money.

  • Loan companies will never need your online banking information.
  • A buyer will never overpay for items you’re selling in order to pay “movers.”
  • Legitimate employers will never pre-pay for a job or ask you to buy supplies with a check.
  • Never purchase gift cards for someone you don’t personally know.
  • There’s no reason anyone would need your online account passwords – ever.

As a general rule, you should never give out personal information including bank account and debit/credit card numbers. If you’re ever in doubt, follow your instincts and play it safe. Unfortunately, fraudsters are always evolving so listing out every scam you may encounter is just not possible. For more information regarding fraud protection, visit MichiganFirst.com/fraud or call us at 800.664.3828.

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