How to spot scam red flags to mitigate losses

To protect against financial losses, it’s crucial to equip customers with knowledge and strategies to identify and avoid scams. Actions to take now:

• Maintain vigilance and conduct thorough research when receiving outreach from an unknown entity.
• Limit account access to only essential parties to prevent unauthorized use.
• Recognize red flags specific to current scam trends (e.g., high pressure tactics that need immediate action).
• Avoid transferring communication off official channels (e.g., text messages/SMS, email).
• Remain skeptical to offers that seem overly favorable (e.g., promises of quick returns, minimal investments or no-risk investments).

According to the FTC, scammers impersonating institutions are now more commonly leveraging alternative communication methods, such as text messages, emails and social media,3 where they were previously leveraging phone calls to target customers. Institutions should share relevant guidance about scam trends through newsletters and online, making information widely available and demonstrating the institution’s dedication to customer awareness. It is impactful when institutions make their customers aware that they will never reach out via text message, so the customers are on high alert for SMS scams.

In addition to customer education, many leading firms have noted that additional friction in the customer experience is important in deterring fraudulent activity. Adding these additional anti-fraud measures makes sure their teams have ample time to review potential suspicious activity. Further, educating customers on the benefits of additional friction helps reinforce customer confidence while minimizing frustration caused by potential delays in processing.