How Victims Can Minimize the Impact of Financial Scams & Fraud

The Covid-19 pandemic has given scammers plenty of new opportunities to take advantage of their victims. Thankfully, Equifax, Experian, and TransUnion continue to offer free weekly credit reports to help victims identify and track problems. (

Scammers and fraudsters will always be around. While the advancement of technology has made everyone’s lives more convenient, it has also given scammers and fraudsters the opportunity to come up with sophisticated tactics to add to their repertoire of schemes. Because of technology, it is also less costly to organize scams not just on a local scale, but a global one.

Some scams may be perpetrated by one person, but it’s highly unlikely — at least in today’s ever-evolving landscape. It’s usually the case that scams and fraud involve an organized group that has a more broad network than you can imagine. The first part of this series tackles how to spot red flags and outlines what kind of tactics scammers employ to manipulate potential victims. It also lists down some of the more common scams you should be wary of, such as credit card fraud, fake lotteries and charities, identity theft, and debt collection fraud.

While people are generally aware that scams and scammers exist, however, many still fall prey to their nefarious tactics. This begs the question, why do people still get scammed and how can you minimize the impact?

Why People Fall for Scams

It is an unfortunate reality that, similar to technology, professional scammers also evolve. Precisely because they’re professionals, they’re good at what they do and see an opportunity to victimize anyone at every turn. They use everything at their disposal to make themselves look credible and trustworthy to potential victims.

It’s easy to say that people become victims of scams simply because they’re gullible or uneducated. This is not always the case. In fact, a 2017 study conducted by the AARP’s Fraud Watch Network reported that victims of investment fraud were more likely to have a four-year college degree and earn more than $50,000 annually. Famous scams that have previously been exposed, such as the Ponzi scheme, were able to reel in victims who are deemed unlikely to fall for such tactics.

So, why do people, regardless of their educational or financial background, still fall for scams? Some reasons include the following:

  • Wealth accumulation as a measure of success: It’s no secret that a lot of people equate money with success. While being wealthy is not entirely a bad thing to aspire to, scammers take advantage of this by getting you to believe that you will financially benefit from what they’re offering — even if you suspect that it’s fraudulent.

  • High-risk, high-reward mindset: Further to the previous point, people with a high-risk, high-reward view of wealth accumulation are often those who sign up for bogus schemes despite their suspicions. Similar to gamblers, these types of people are convinced that to accumulate money, they need to risk something. However, they often fail to realize that the risks far outweigh whatever gain they might have perceived from a fraudulent offer.

  • Reciprocity: One way scammers get people to listen to their sales pitches or even sign up for a scheme is to make it seem like they’re doing their potential victims a favor. A typical example is when scammers offer “exclusive deals” that make victims feel special or singled out in a positive way. Because of this, potential victims might feel the need to “return the favor” by signing up for the scheme.

  • Following the majority: People mistakenly regard numbers and figures as credible even if these claims are unverified. Mention a random percentage to represent a statistic and you will discover that people are likely to believe this without double-checking the source of the claim. Scammers are aware of this, which is why they might say something like “80% of people sign up for our offer.” Because of this, potential victims feel reassured that they’re just doing as everybody does.

  • Fear of missing out (FOMO): Fraudsters are aware that when people feel as though they’re going to miss out on an opportunity, they’re likely to grab it, even if it may be illogical to do so once the urgency factor is gone. People do not like to be haunted by “what ifs,” especially if it’s about money.

  • Brand recognition: One thing recognized brand names have built over time is credibility — which is exactly what scammers take advantage of. For instance, a fraudster might tell you that they’re associated with this brand or they got your name from this brand. To the unsuspecting victim, that name-dropping tactic might sound like an indirect endorsement from the big-ticket brand itself.

Identity theft is on the rise, with no signs of slowing down. Identity Theft and Your Social Security Number is a guide the Social Security Administration has published to help victims.

How To Minimize the Impact of Financial Scams and Frauds

While many people constantly exercise vigilance, nobody is really immune to getting scammed. So, what should you do when you become a victim? Here are several options to consider to minimize the impact of financial scams and frauds:

Freeze Your Credit

A credit freeze is a tool you can use to protect yourself once you’ve become a victim of credit fraud. Simply put, freezing your credit prevents anyone from opening fraudulent credit accounts in your name even if they’ve managed to steal your personal information, such as your Social Security number. If you have a minor child, freeze their credit too as a safety measure.

However, keep in mind that if a fraudster has managed to get a hold of your credit card number, they can still use your credit account to make purchases without your permission. If you’ve been the victim of identity theft, freezing your credit can only prevent the scammer from using your stolen identity to commit fraud under your name.

Check Credit Reports Weekly

Your credit report contains your personal information, public records, inquiries, and, of course, your credit history from the last seven to 10 years, including your balances, statuses, and payment histories.

If you’ve been scammed, it’s a good idea to check your credit reports weekly for accuracy. Before the pandemic, people were only entitled to one free credit report each from the three major credit bureaus — Experian, Equifax, and TransUnion — every year. However, they have decided to extend this free access to credit reports until April 2022. You can check your credit report as many as three times a week for free at

Do Not Fully Trust Someone’s Online Presence

These days, a lot of people perceive a person or group’s online presence as a mark of credibility or authenticity. A few years ago, this might have still applied, as websites were not as easy or inexpensive to create. However, with the boom of social media platforms, free website creators, and the like, practically anyone can have an online presence — even scammers.

That said, never trust an online shopping site just because they have an online presence. Similarly, never donate to a natural disaster relief agency you have never heard of or have not thoroughly researched. It’s still a good idea to use the internet to verify the credibility of a person, shop, organization, business, or charity, but know the signs of fraud. When a website or social media page asks you to share your personal information or passwords, or if they ask you for some kind of payment, that’s usually a telltale sign of a scam.

Keep Your Cards Safe

If you’ve had your Social Security number or card stolen before, minimize your risk by keeping your cards in a safe location. Never keep them in your purse or wallet. This goes for other cards such as credit or debit cards, or other important cards. If you must take them with you, keep them in a wallet separate from the one you regularly use.

Beware of Social Media “Surveys”

You might have seen social media posts in the form of “slam book” questions. Often, these posts ask seemingly innocent questions, such as “What high school did you go to?” or “What is your favorite pet’s name?” or “What is your mother’s maiden name?” Resist the temptation to answer these questions as the information you provide can be used as answers to credit card security questions or when changing your email’s password.

File a Report

Last but not least, you can minimize the impact of financial scams by filing a report. Even if you think the authorities might not be of assistance, you will need the case number to dispute any fraud-related effects on your credit reports. Similarly, consider reporting your experience to the Better Business Bureau ( to warn others and help them avoid a similar situation.

Road to Recovery

When it comes to minimizing the impact of financial scams, one thing that people often miss talking about is the emotional damage such an experience might have on the victim. If you’ve been the victim of a financial scam, it’s important to remember that you shouldn’t blame yourself. While the chances of getting your money back might be slim, focus instead on emotional healing.

Being the victim of a scam can invoke feelings of shame, self-doubt, and even terror or helplessness. Instead of being preoccupied with the crime, concentrate on recovering from your experience and do all you can to minimize the impact of financial scams by considering the points stated above.

Author’s Note:

Earlier this year, I became a victim of identity theft. A large cell phone carrier had exposed my information, and a thief has used my social security number to apply for credit and to open a bank account. It’s not a pleasant process to go through, however, the government and various financial institutions have processes in place for a reason. While certainly frustrating, fraud and identity theft victims are not alone. Just stay vigilant. Protect yourself and monitor your report for new accounts and be sure to dispute them immediately upon discovery.


Rick Munster

About the Author

Rick’s been with Money Fit by DRS for 18 years and early in his career, he managed two divisions, customer service, and credit counseling, before settling in his current role of managing the organization’s marketing efforts. He is known for being someone who’d give the shirt off of his back for you, and smile while doing it! He takes that positivity and problem solving to consumers when relaying a message of help, hope, and better times ahead. When he isn’t helping consumers regain control of their debt, he loves traveling and seeing new places.