(American Bankers Association)
When young service members graduate from basic training or earn their commission, the biggest threat to their financial security isn’t that brand new muscle car for $0 down and a 15 percent interest rate. In fact, the biggest threat is one that targets service members across all ranks and Americans from all walks of life.
In 2019, Americans lost $1.9 billion to phishing and fraud. That year, the Federal Trade Commission received 647,000 complaints about imposter scams which topped $667 million in total losses, making them the number one type of fraud reported to the FTC Consumer Sentinel Network.
*You may be asked to verify confidential information if you call your bank, but rarely the other way around (American Bankers Association)
Imposter fraud most commonly takes the form of a criminal posing as a financial institution in order to scam information from a consumer in order to access their accounts. Every day, thousands of Americans receive calls, texts, and emails from these scammers pretending to be a bank. Depending on how much information the scammers have been able to find about the consumer, they may even pose as the consumer’s actual bank. In order to gain access to your accounts, the scammers need to ascertain certain information from you. Luckily, this information is standardized across the financial industry as information that banks do not ask for.
The other most common types of fraud scams are romance and employment scams. Romance scams will have a scammer posing as a romantic interest online who eventually asks to be sent a sum of money. Employment scams can be more complex and range in form from paid job applications to startup business ventures requiring immediate payment. These types of scams have also become more common due to the fact that many people are now working from home.
The easiest way to protect yourself from fraud scams is to recognize the signs. If you receive a call, text, or email that you believe to be fraudulent, contact your financial institution immediately. “If you even have an inkling that something doesn’t seem right, just call,” said Stacey Nash, USAA’s SVP of Fraud. “We can address the fraud before it becomes a problem.” USAA is a leader in the financial industry at detecting and combating fraud. As a digital institution, the bank has been forced to stay ahead of fraud threats in order to protect its members. “When we are alerted to fraud, USAA engages law enforcement with as much information as possible,” Nash said. “We’re committed to upholding justice.”
USAA’s 24/7 fraud prevention teams flag unusual activity and reach out to members to ensure that there is no possibility of fraud. In cases where a member is buying into a scam, USAA representatives will educate the member on the signs and dangers of fraud to help prevent them from becoming a victim.
Seventy nine percent of adults surveyed in 2019 say they were targeted by fraud over the phone. In total, it is estimated that nearly 50 percent of adults have been the target of an imposter scam at some point in their life. Aside from recognizing the signs of fraud yourself, the best way to combat the threat is to share the information. Among military ranks, it is of the utmost importance for leaders to educate their subordinates on how to protect themselves from scams like these. Though junior service members are not exclusively targeted, they can be a more vulnerable population. “Be vigilant,” Nash said. “At the end of the day, if it sounds too good to be true, it usually is.”