What are the signs of financial scams and how can you avoid them?

Financial scams are deceitful schemes designed to trick individuals into giving up their money or personal financial information. They exploit trust and often prey on vulnerable groups like the elderly or those unfamiliar with financial matters.

To protect yourself from financial scams, it is important to be aware of the common tactics that scammers use. Be suspicious of any unsolicited offers, especially those that seem too good to be true. Never give out your personal information to someone you don't know and trust. And if you think you may have been a victim of a financial scam, report it to the authorities immediately.

Think you can't be scammed? Think again.

Anyone can fall victim to fraud. Students, the unemployed, pensioners, business owners, even university professors – fraudsters don't discriminate. As fraud become increasingly sophisticated and harder to detect, we all need to be vigilant, informed, and proactive in protecting ourselves.

Scamming is a crime. It's about deception and theft, tricking you into giving up your money. Scammers create a false sense of reality, using any channel they can to connect with you. Before you become a statistic, enhance your resilience. Understanding how scams work is the first step in avoiding them.

It’s time to be alarmed if:

• You’re offered high-yield investments (like cryptocurrency) out of the blue.
• Someone pretends to be a bank employee or a law enforcement agent.
• Someone professes love quickly or asks for money early in a relationship.
• You receive suspicious links via email or text.

Here's what you need to know and what is trending now:

1. Investment Fraud

These scams promise high returns with little or no risk, but in reality, they are often Ponzi schemes or other fraudulent investments that will leave you with nothing. These scams can take various forms and often target vulnerable individuals, such as the elderly or those unfamiliar with financial matters.

How it looks like:

• You will be contacted by someone who will offer you a very high-yield investment opportunity (stocks, bonds, cryptocurrency, rare metals, alternative energy, investments abroad, etc.).
• The first call is usually to find out more about you as the potential victim.
• The offer made to you is emphasised as a personal one and fraudster may ask not to share this information. Fraudster will try to encourage you to invest.
• You will be contacted again later by someone new, who will give you more information about the investment and try to persuade you to invest.
• You will be directed to a website that shows you how your future investments will grow over time and earn huge profits.
• The fraudsters may also try to access your computer. You might be asked to share a screen via variuos software.
• If you say you don't have the money, they might encourage you to borrow the sum or to take a loan for it.
• The scammers want you to transfer as much as possible to their indicated account, and they always ask for more.
• If you will deny to share access to your personal device. They might ask you to install a software on your smart device that gives them remote access to the device. They will never say you the real purpose of such a software.
• As soon as fraudsters will receive the funds from you, they will disappear.
• It may be that they will contact you again after some time. They will promise to give you your money back, but only if you make another transfer to cover any extra costs.
• You will lose all the money you invested, as well as the extra amounts you paid!

How to act:

• Verify Licenses - always check if the person or company offering the investment is licensed and registered with the relevant authorities. Don't just take their word for it - independently verify.
• Scrutinize the Investment -thoroughly research any investment opportunity, no matter how promising it seems. Understand how it works, what the risks are, and where your money is actually going. Look for independent reviews and ratings.
• Be Wary of Unsolicited Offers - be skeptical of investment opportunities that come to you out of the blue, especially through cold calls, emails, or social media messages.
• Recognize red flags: "Guaranteed" high returns, high-pressure tactics, complex or secret strategies, celebrity endorsements.
• Seek Independent Advice of trusted advisor or at least get a second opinion. Don't rely solely on the information provided by the person selling the investment.
• Never share your bank account details, credit card numbers, or other sensitive personal information with someone you don't know and trust.
• Use strong passwords and enable two-factor authentication to protect your online accounts from unauthorized access.

If you suspect an investment scam, report it to the appropriate authorities, such as your local law enforcment agency, regulatory body and your financial institution. In case you've already fallen victim to an investment scam, don't be embarrassed to report it. You could help prevent others from becoming victims.

2. Romance Scam

Romance scams are a particularly cruel type of fraud that prey on people looking for love and companionship. Scammers create fake profiles on dating sites or social media, build trust with their victims, and then exploit that trust for financial gain.

How it looks like:

• Scammers make false profiles on social networks and pretend to be other people. They often work in groups and are well-organised.
• The fraudster will try to make you trust them.
• You will meet or talk to the scammer online, for example, on social media or dating sites.
• The scammers will talk to you a lot. They want you to trust them so they can control you.
• They might ask you to send private photos or videos of yourself. They will use these later to trick you.
• After you have talked to them online for a while, the scammer will ask you for financial support. The reasons may vary, they can even ask you to finance their travel to meet you in person.
• The scammer may also be trying to get your personal information from you to use it later against you.
• If you do not agree to give the money, they will often start threatning you. If you persist and do hand over the money, the scammer will almost certainly ask for it again and continue to manipulate you.

How to act:

• Be wary of people who contact you out of the blue, especially if they seem too good to be true.
• Be suspicious of profiles with very little information or those that seem too perfect. Do a reverse image search of their photos to see if they've been used elsewhere.
• Be careful about what personal information you share online, especially on dating sites and social media. Limit it!
• Be careful of people who profess strong feelings very quickly or pressure you to move the relationship forward rapidly.
• Be suspicious if the person always has an excuse for why they can't meet in person or video chat.
• Pay attention to inconsistencies in their stories or if their online persona doesn't match their online activity.
• The biggest red flag is a request for a financial support. Never send money to someone you've only met online, no matter how convincing their story.
• Take your time, and communicate with them through different channels (e.g., email, phone, video chat) to get a better sense of who they are. Don't rush into an online relationship. Get to know the person gradually and ask lots of questions.
• Do your research. Search online for the person's name, photos, and any details they've shared to see if they have been used elsewhere or if any red flags come up. Discuss your online relationship with a trusted friend or family member. They may be able to offer a more objective perspective.
• No matter how convincing the story, never send money, credit card details, or bank account information to someone you've only met online
• Never share personal documents like your passport or driver's license.

If you suspect a scam, (a) cease all contact immediately and report to the dating site or law enforcement, (b) report the scammer to the dating site or social media platform where you met them, (c) if you've lost money or shared financial information, contact your local law enforcement

3. Phishing

Phishing is a cybercrime where attackers impersonate trustworthy entities to trick individuals into revealing sensitive information like passwords, credit card numbers, or bank account details. This is typically done through emails, text messages, or websites that mimic legitimate ones.

How it looks like:

• You are asked to share your personal information. This can be done through SMS messages, phone calls, e-mails, etc. Your information is then used for fraud.
• You will receive a link that redirects you to fake websites that look almost identical to your bank's real website. They copy everything – the logos, the colors, even the design – to trick you into thinking it's genuine. When you click on a link in a phishing email or text, you might be taken to one of these fake sites. If you enter your login details or other personal information there, scammers can use it to access your real bank account, apply for loans in your name, or make purchases with your card.
• Phishing scammers often use urgent situations to trick you into giving up sensitive information. They might pretend there's a problem with your bank account that needs immediate attention, like a payment that needs confirming or a refund that needs processing. They might even ask you directly for your login details, passwords, or credit card information.

How to act:

• Be cautious and check links BEFORE CLICKING - check the spelling and grammar. If there are errors in the writing, it is most likely a scam message. However, as nowadays scammers are actively using AI, it may look generic, but make sure to check the source and the link. For example, they may use the Cyrillic alphabet letter instead of the Latin alphabet letter. It looks similar, but it is not. Compare generic website links and email domains with the ones received.
• Verify the Sender - if you're unsure whether an email or text is really from your bank, a government agency, or another organization, it's always best to double-check. Don't use the contact details in the message itself, as those could be fake. Instead, find the official contact information on the organization's website or your official documents and reach out to them directly to ask about the message you received.
• Use strong passwords, Two-Factor Authentication solutions and keep Software Updated
• Think TWICE - note that banks and government institutions never ask residents to enter personal passwords/codes or update personal data during a phone call, via an email or SMS link.

If you suspect a phishing attack, report it to the organization being impersonated and to your local authorities. By staying vigilant and following these tips, you can significantly reduce your risk of falling victim to phishing scams.

4. Invoice Fraud

Romance scams are a particularly cruel type of fraud that prey on people looking for love and companionship. Scammers create fake profiles on dating sites or social media, build trust with their victims, and then exploit that trust for financial gain.

How it looks like:

• Scammers make false profiles on social networks and pretend to be other people. They often work in groups and are well-organised.
• The fraudster will try to make you trust them.
• You will meet or talk to the scammer online, for example, on social media or dating sites.
• The scammers will talk to you a lot. They want you to trust them so they can control you.
• They might ask you to send private photos or videos of yourself. They will use these later to trick you.
• After you have talked to them online for a while, the scammer will ask you for financial support. The reasons may vary, they can even ask you to finance their travel to meet you in person.
• The scammer may also be trying to get your personal information from you to use it later against you.
• If you do not agree to give the money, they will often start threatning you. If you persist and do hand over the money, the scammer will almost certainly ask for it again and continue to manipulate you.

How to act:

• Always verify invoices before paying them, especially if they are from new vendors or for large amounts of money.
• Be suspicious of invoices that you receive without having ordered any goods or services.
• Look for inconsistencies in invoices, such as mismatched logos, incorrect addresses, or unusual payment terms.
• Train employees on how to spot fake invoices and what to do if they receive one.

If you think that you may have been a victim of fake invoice fraud, you should report it to the direct manager, CISO, local authorities immediately. You should also contact your bank and credit card company to let them know what has happened.

5. IBAN or Billing Fraud

It is very similar to the FAKE INVOICE SCAM described above. However, this time fraudsters are using a real contact channel with your business partner. Imagine this: criminals break into the email box of a company you regularly work with. They lurk in the shadows, reading emails and learning how your company handles invoices and payments. Then, when the time is right – maybe when you're expecting a bill or during a busy period – they strike.

How it looks like:

• Cybercriminals gain access to the email account of a company you do business with.
• They use this access to gather information about your company's invoicing processes and payment procedures.
• Then, at a moment when it seems natural (perhaps when you're expecting an invoice or there's a change in your usual contact person), they send you a notice that your partner company's bank account details have changed.
• This notice includes a fake invoice with the fraudster's own bank account number, tricking you into sending your payment to them instead of your legitimate partner.

How to act:

• If you receive any notice about changes to payment details, like a new bank account, always double-check directly with your business partner.
• Review your bank statements and online transactions frequently to identify any suspicious activity.
• Never share your IBAN or other sensitive information in response to unsolicited emails, text messages, or phone calls.

If you suspect you have been a victim of IBAN fraud, report it to your bank and the relevant authorities immediately. Also, inform your business partner that they have a security breach to prevent further fraud.

6. Job Scams / Employment Fraud

Job scams are when fraudsters trick you into giving them your money or personal information by pretending to offer you a job. They might promise you an amazing job, loads of money or work you can do from home to boost your income. As always, the high salary comes with little effort. What they really want is your money or personal details. They make it look like a real job offer, but often the job doesn't exist.

How it looks like:

• When you're looking for a job or just browsing online, you might come across some dodgy offers on the internet, on social media or even on job search websites.
• Sometimes you can get an email, message on your social network or any messaging apps like Telegram or WhatsApp that look like they're from real companies, offering you a job or asking you to apply.
• The offer is often TOO GOOD TO BE TRUE. The grammar and spelling are usually really bad. • The whole hiring process is really quick – there's no interview or anything like that. The fraudsters often pressure you to act quickly, saying the job will be gone if you don't apply right away.
• You might be asked to top up an account with your own money or crypto to do tasks like transferring money, making purchases or receiving packages on behalf of someone else.
• And finally, you're told to pay a 'recruitment fee' or for training materials before you start the job and make any money.

How to act:

• It's always great to see a job ad on a trusted platform or website, but remember that scammers can also post fake ads. If you do get scammed, report it in the app where you found it.
• Never send money or give your personal details to anyone you've only met online, by email or over the phone.Scammers may deceive you by giving you a small payment for a job or task, but never send your own money, you won't get it back.
• Know who you're dealing with. When contacting recruitment agency reps, use phone numbers that you've found online yourself.
• Don't be pressured into acting quickly; a legit offer won't require you to make a hasty decision. If the offer sounds too good to be true, it probably is.
• Don't take payment or rewards to recruit other people.
• Be careful about including personal information such as your physical address or date of birth in your CV.
• Never send your passport or identity documents to an employer or recruitment firm, unless you are certain they are genuine.

Report job scams to your bank straight away if you have received or initiated payments. Inform the relevant authorities immediately. Also, inform the platform administrator where fraudulent ads appeared to prevent further fraud.

7. Money Muling

As we talked about earlier, job scams (also known as employment fraud) are a type of criminal activity that can be closely related to another type of criminal activity called money mules. Money mules are people who've been tricked into helping criminals launder money. So if you are the victim of a job scam, you may become part of another criminal activity.

How it looks like:

• Money laundering is the process of trying to make money look like it came from somewhere else by moving it through different bank accounts. Criminals recruit people - money mules - to help them do this.Have you ever been asked to help transfer money by an online friend or love interest? Someone offering a way to make easy money? Someone claiming to need help because they can't use their own bank account? If so, you may have been talking to a 'mule herder' trying to recruit you as a money mule. If you did what they asked, you may have committed a crime.
• Imagine someone who tells you stories to get you to do something for them. They might say, "This is a super easy way to make some money!" or "I really need to send money to someone, but I can't use my own bank account." Sometimes, they might even offer you a treat or some money as a thank you. They'll use these stories to trick you into helping them move stolen money. They might send money to your bank account and ask you to send it somewhere else, or they might even ask for your online banking password or special codes so they can use your account themselves.

How to act:

• If you're selling something, they might offer to buy it and pay you with a bank transfer, but the money they use could be stolen, and then you'll lose the item and the money. The reason they do this is to hide where the money really came from, and if you help them, even if you didn't know it was wrong, you could get into trouble too.
• Mule herders often create fraudulent profiles on social media platforms and subsequently post advertisements offering quick cash or easy investments. When a member of the public likes or messages one of these profiles, the herders attempt to persuade them to follow their instructions by pretending there is no risk involved.

It's really important to act quickly if you think you might be involved in money muling. Contact your bank, repoprt it to the authories, stop all communications with the criminals, kepp records and do not feel ashamed. Remember that you are the victim of a crime, and that you did not do anything intentionally wrong.

Remember:

• Be careful with your personal information. Never share your social security number, bank account details, or other sensitive information with anyone you don't know, especially online or over the phone.
• Don't click on links in emails or texts if you are unsure about them. Scammers often send emails or text messages with links to fake websites that ask for personal information.
• Only download apps from trusted sources. Downloading apps from unreliable sources can infect your device with malware.
• Use strong passwords. A strong password should be a mix of letters, numbers, and symbols.
• Keep your software updated. Software updates often include security patches that protect against new threats.
• Warn your family and friends about what happened to you. By explaining the scam and how it works, you can help them avoid falling victim to the same tricks.
• Act fast if you suspect fraud! If you think your online banking details have been compromised – maybe you accidentally shared your login information, downloaded a suspicious file, or noticed unauthorized transactions – call your bank immediately. The sooner you report it, the better chance you have of limiting the damage and potentially recovering any lost funds.

Useful Links

• Entities not entitled to provide financial services in Lithuania
• Illegal gambling operators list
• International investment warnings
• CONSOB Warning List
• FINMA Warning List

Report a Fraud

If you think you've been scammed, report it to the police immediately. You can also report the scam to your bank and the relevant consumer protection agencies in your country.

If you suspect you’ve been scammed and transferred funds to an IBAN issued by Nexpay, email: [email protected]