5 Financial Scams To Avoid in 2024 as Expert Warns Fraud Has Reached ‘Crisis Level’ (2024)

Fraud and scams are nothing new, but some experts are warning they are now at a “crisis level” in the country, according to CNBC. With the advent of artificial intelligence (AI), as well as technology such as deepfakes, they are becoming harder to spot.

And the numbers reflect this trend: Fraud cost U.S. consumers more than $7 billion during the first three quarters of 2023, according to the Federal Trade Commission, reported CNBC. This represents also a 5% increase from the same period in 2022.

Here are five financial scams experts warn about for 2024:

1. Grandparent Scams

This scam consists of fraudsters impersonating relatives and grandchildren asking for financial assistance. They do so by mining social media or purchasing data from cyber thieves, as the Federal Trade Commission (FTC) explained.

Eric Croak, CFP and president of Croak Capital, called this scam “One of the oldest tricks in the book.” Typically, it involves some emergency — the scammer, using high-pressure tactics, convinces the victim that a family member is in dire need of money, he added. “Elder fraud is growing because scammers’ methods are getting more advanced. They’re using digital manipulation, likely with AI, to sound more convincing.”

Indeed, with AI, bad actors are able to replicate a voice with an audio sample of just a few sentences found on TikTok or other social media platforms, according to The Washington Post.

To protect yourself, the Office of the Attorney General of Minnesota offered a few tips: verify that it is your grandchild by contacting their parents or asking a question only your real grandchildren would know the answer to; resist pressure to send money quickly and secretly; and refuse to send money through wire transfer or overnight delivery.

2. Romance Scams

Unfortunately, this scam is very prominent, as well. In 2022, 70,000 people reported a romance scam, with losses hitting a staggering $1.3 billion — and the median reported loss standing at $4,400, according to the FTC.

These scammers often use dating apps as unexpected private messages on social media platforms, something that is becoming more prevalent. The FTC noted 40% of people who lost money to a romance scam last year said the contact started on social media, while 19% said it started on a website or app.

Scammers will often ask for payment in ways that are harder to trace and reverse, such as gift cards and peer-to-peer services such as Venmo and Zelle, senior industry analyst Ted Rossman told CNBC. “Be very suspicious if someone that you don’t know asks you for one of these payments,” he added.

To avoid dating scams, Equifax recommended not sharing personal details; not sending or receiving money; using trusted dating websites, thinking twice before using your webcam and trusting your instinct.

3. Cryptocurrency Scams

The FTC reported that consumers reported losing more money to investment scams — more than $3.8 billion — than any other category in 2022. As CNBC noted, with investment scams, crypto is central in two ways: It can be both the investment and the payments that can’t be reversed.

“Besides claiming to be a love interest who needs you to send them money, crypto scams may start with an ‘investment manager’ calling you out of the blue with a tip that seems too good to be true or a scammer claiming to be a celebrity who can quadruple your money,” according to CNBC.

To avoid these types of scams, you should know that a legitimate business or government entity will never email, text or message you on social media to ask for money, and will never demand that you buy or pay with cryptocurrency.

In addition, “don’t pay anyone who contacts you unexpectedly demanding payment with cryptocurrency,” according to CNBC.

4. Employment Scams

As the FTC noted, scammers advertise jobs the same way honest employers do — online, including in ads, on job sites, and social media, in newspapers, and sometimes on TV and radio. They promise you a job, but what they want is your money and your personal information, according to the FTC.

“These predominantly revolve around identity theft,” said Croak. “Employment scams are particularly problematic, given the rise of remote work opportunities and freelancing. Scammers pose as legitimate employers, requesting personal information such as Social Security numbers under the guise of background checks but actually aiming for identity theft.”

To avoid employment scams, CNBC recommended looking up the name of the company, plus the words “scam,” “review” or “complaint.” In addition, never click on a link from an unexpected text, email or social media message; and never pay a fee to get a job.

5. Online Account Tax Scam

Here, scammers try to sell or offer help setting up an online account on IRS.gov that puts their tax and financial information at risk of identity theft, according to the Internal Revenue Service (IRS).

“This information in the wrong hands can provide important information to help an identity thief try to submit a fraudulent tax return in the person’s name in hopes of getting a big refund. People should watch out for these scam artists offering to help set up these accounts because these are identity theft attempts to run off with the taxpayer’s personal or financial information,” the IRS noted in a statement.

To avoid these scams, the IRS said people should be wary and avoid sharing sensitive personal data over the phone, email or social media.

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