Skip to content

How to Avoid Financial Phishing Scams

phishing scamsNo matter how technologically savvy you may be, criminals are always upping their game and financial phishing scams are still tripping up even the best of us. How, you may ask?

The latest tactics include psychological warfare and solid digital copycat efforts so good, that if we aren’t careful, could wreak havoc on our financial lives.  While the term “phishing” refers more specially to email scams, the practice has extended into other forms of communication.

How to Avoid Financial Phishing Scams

Here’s a closer look at how phishing scams are thriving in the new decade, and how you can avoid becoming a victim. 

IRS Phishing Scams


You: “Hello?”

Caller: “Is this (insert your name here)?

You: “Yes, it is. Can I ask who’s calling please?”

Caller: “I am Bill with the Internal Revenue Service. We are contacting you in regards to the tax bill that you owe. Did you get the official notice we sent you in the mail?”

You: “Um, no I didn’t receive a notice. What’s going on? I’ve already filed my taxes like I do every year. I’ve never had an issue before.”

Caller: “Our records indicate a discrepancy in your filings for the past 3 years, and now you not only owe more, but you will have additional penalties to pay. Our accountants have also verified that you have incorrectly been receiving refunds and you will need to pay it back. Your bill is $10,275.”

You: “I’m very confused! How can I possibly owe that much?”

*10 minutes of back and forth arguing*

Caller: Look, I’ve had enough! If you don’t cooperate, we will issue a summons for your arrest. Is that really you something you want your children to see? Your family? You need to settle this bill within the next 24 hours, or there will be serious consequences. We know where to find you and will not hesitate to arrest you in your home. Tax evasion is a very serious crime. Now, here are the instructions to wire the money.”

This conversation is based on something that actually happened to someone I know. The endless stream of authoritative sounding threats and harassment were enough to make them doubt themselves and become convinced that they actually HAD made a huge mistake. 

The money was long gone by they time they realized it was a scam. The incident was reported, but they were told there was no way to track the money and that nothing could be done. 

For the record, it’s important to know that the IRS will never contact you by phone.  Not even to make sure you “received their official notice.”

It might seem crazy that someone – a millennial even – actually got tricked into sending this unverified caller the money, but fear and self-doubt is a powerful motivator. It’s SO important to question everything and to make sure you understand any and all situations before signing any dotted lines or parting with your hard-earned cash. 

But what about situations that APPEAR to be authentic and the thought of a phishing scam is the furthest thing from your mind?

phishing scams - worn out coupleReal Estate Phishing Scams

A recent news story shares the plight of a young couple in California who were trying to purchase their first home but inadvertently ran into a simple, but effective, phishing scam.

The couple allegedly ended up losing their $775,000 down-payment to a scammer posing as their Escrow Agent.  The scammer sent an email that looked official and sent wire instructions for the deposit. Sadly, it wasn’t until at least a day after the transfer had been made that the real Escrow company caught it – but it was too late. FBI officials said the money ended up in a bank account in Singapore and there was nothing that could be done. 

Another man in a similar downpayment situation got lucky and quickly identified the fact that he was dealing with a scam.

As soon as he realized the email he had received was NOT from his lawyer, he contacted his bank and requested that a freeze be put on his account immediately. 

Apparently, scammers are getting good at hacking emails belonging to attorneys, real estate brokers, etc., and monitoring the conversations between the client and agent. Since they know when the wire transfer is supposed to be happening, they can intercept the email and send the wire instructions to an alternate account from an email that, if you aren’t paying close attention, can look similar enough to be trustworthy.

This financial phishing scam is no joke and can do some serious financial damage. 

Request for Political Contribution Phishing Scams

Another financial phishing scam that’s popular around election season is the tried and true robocall asking for money to support your favorite candidate. In fact, the caller ID will usually indicate that the call is from a legitimate organization. 

If you decide that, yes, you wouldn’t mind donating a few dollars to get your guy or gal elected, you will find yourself being transferred to speak to a live agent. This agent will ask for your credit card information and donation amount. And in a few seconds, you will have successfully given the scammer full and complete access to your funds. 

While most credit card companies will refund the money, it’s no fun to be out thousands of dollars in the meantime. Not only that, purchases can now made in your name can leave a bit of an identity theft issue to clean up as well.

Always go to the candidate’s official website if you would like to donate and avoid any kind of over the phone transaction to be safe.  

But wait – there’s still quite a few more phishing scams out there! 

When it comes to phishing scams, this just scratches the surface. Other methods include using electronic means like text and email to:

  • pose as your bank or financial service center asking you to verify your login and password.
  • ask you to click on a link to verify your personal information.
  • act as credit card company asking you to submit your payment via the included link.
  • claim they are from the IRS letting you know you are eligible for a refund – you just need to confirm your social security number. 
  • pose as a legitimate company offering a coupon that you need to download (adding spyware to your computer).
  • state that your package (one you didn’t even order) is being delivered and to click to confirm your location.

Read More: The Increase in Online Financial Scams

And there are new scams popping up everyday! So how can you protect yourself?

While it may seem impossible to completely avoid these types of phishing scams, the best thing to do is to remain extra vigilant.

Question everything

It’s not uncommon to receive emails from your bank, credit card company or other subscription services. Phishing scams count on the fact that you probably won’t look at the sender’s email address too closely if you recognize the logo. 

However, when unexpected communication from any organization comes through, stop immediately and check the sender’s email address. If it does not match exactly to what you’ve received in the past, it’s very likely a scam. If the message seems important, but you simply aren’t sure, reach out to the organization directly via their website. DO NOT click on any links and downloads in an email until you are beyond certain it is legitimate. 

Keep your software programs updated 

One of the best lines of defense against phishing scams is to not only install anti-malware and anti-spyware programs, but to keep ALL your software programs up to date. 

Many programs are constantly working to strengthen their firewall for added privacy and security. The way this is done is through regular updates pushed out to users who then need to actually install the update. Don’t get lazy with this – especially when it comes to your malware and spyware programs.

These programs work hard to block random online popups and prevent hackers from being able to access your private a data. Don’t forget that this applies to your phone as well! 

Back up your data

I cannot stress this enough! If your computer, phone or email account becomes compromised due to a phishing scam, you will likely lose access to everything on those devices. It’s so important to have all of your personal and important data backed up! Whether it’s on an external hard drive or cloud based app, commit to making it happen at least once a week. 

The easier it is to access this information if anything has been compromised, the quicker you will be up and running again. 

Use multi-factor Identification

Finally, another layer of protection against phishing scams is to set up multi-factor identification (ie. both a password and a confirmation text, email, or phone call when logging in). This should be done on you email accounts, phone and any other device or program that allows you to enable it.

Even if it can’t fully prevent a determined hacker, it will give you a fighting chance of keeping them out. It will also alert you anytime there is suspicious activity found on your accounts and give you time to change your password. 

Read More: The Issue with Password Security: It Could Cost You

As technology continues to advance, scammers are getting even better at working the system.

Scammers count on the fact that most people won’t pay close attention and will just assume that if it looks or sounds legit, it must be. Don’t be afraid of being a little paranoid and double-checking everything. It could save you from an incredible amount of frustration in the long run.

If you’ve already been scammed

If you believe your identity and personal information has been compromised in any way, reach out to

You can also help shut down the phishing scams by forwarding it to the Anti-Phishing Working Group at [email protected] If you got a phishing text message, forward it to SPAM (7726). You should also report the phishing attack to the FTC at

What other financial phishing scams have you come across not covered here? What else would you do to prevent being “taken to the cleaners?”

Money Save Money

AUTHOR Kerah Kemmerer

Hello! I'm Kerah. I'm a writer and personal finance enthusiast with a background in marketing. I'm also a wedding and portrait photographer, part-time RVer and a lover of simple and minimal living. Always up to some project or adventure over @krisandkerah on Instagram.

Related posts