Financial scams are more common—and more convincing—than ever, thanks to artificial intelligence.

In fact, you’ve probably encountered a scam lately. According to Pew Research Center, 73% of U.S. adults have experienced some kind of online scam or attack, and about 1 in 5 reported losing money to an online scam or attack. These run the gamut, from fake investment opportunities to imposter scams. (Anyone else get incessant calls from the “IRS?”) 

As fraudsters constantly evolve their techniques, you might be wondering how to avoid financial scams—and if it’s even possible. The good news is, many of these scams share common red flags.

However you earn your money—whether it’s playing games on KashKick or working late hours at the office—it’s important to keep it protected. In this guide, you’ll learn about common types of financial scams and their red flags, how to avoid financial scams, and steps to take if you think you’ve been scammed.

What Is a Financial Scam?

Let’s first define a financial scam. A financial scam is a deceptive plan to steal money, personal information or financial access from a person or business. 

The Bureau of Justice Statistics turns to the Stanford Center on Longevity definition of financial fraud: acts that “intentionally and knowingly deceive the victim by misrepresenting, concealing or omitting facts about promised goods, services, or other benefits and consequences that are nonexistent, unnecessary, never intended to be provided, or deliberately distorted for the purpose of monetary gain.”

Financial scams can be difficult to detect. They may initially appear legitimate, especially when a scammer poses as a trusted organization, employer, or even friend or family member.

Here are a few common traits many financial scams share:

• Unsolicited contact. This can be via phone, email, text or social media.
• Urgent or threatening language. The idea is you feel pressure to act quickly.
• Requests for sensitive information or payments. 
• Promises of guaranteed returns or rewards. 

There’s a lot of psychology at play when it comes to scams. Often, scammers will try to trigger excitement, fear or confusion so people move quickly and don’t stop to think about what’s happening.

Common Types of Financial Scams (With Examples & Red Flags)

As you learn more about scams, you’ll start to notice patterns. Below are a few of the most common types of financial scams, along with warning signs to help you identify them.

1. Investment Scams

Investment scams continue to be one of the top financial scams year after year. Anyone can be subject to an investment scam—from big-time investors to everyday savers.

As defined by the FBI, investment scams happen when fraudsters lure individuals with promises of high returns and minimal risk, often using fake opportunities like stocks, cryptocurrency or real estate to steal money. 

These scams come in all shapes and sizes, from fake cryptocurrency investments to Ponzi schemes that promise sky-high returns. The idea is to trick you into thinking you’re putting your money into a “sure thing,” when really, they intend to drain your account and leave you with nothing.

But no matter the scheme, when it comes to investment scams, the rule of thumb is simple: If it sounds too good to be true, it probably is. After all, there’s no investment opportunity out there that comes without risk.

🚩 Investment scam red flags:

• Guaranteed high returns or “risk-free” investments
• Pressure to act quickly
• Vague explanations or overly complex language 
• Fake endorsements by celebrities, well-known companies or government agencies

2. Imposter Scams

Imposter scams are what they sound like: A scammer pretends to be someone you trust. This might be a bank representative, government agency, employer or even family member. The idea is to trick you into sending money or sharing personal information. These scammers might even use voice-cloning tech to trick loved ones.

Imposter scams surged during the government shutdown in November 2025. Scammers took advantage of the confusion and fear to try to access bank accounts and personal information.

These types of scams also often increase around the holidays with criminals pretending to be family members, charities or even delivery services that “were unable to deliver your package.”

🚩 Imposter scam red flags:

• Request for payments or personal details
• Sender details don’t match official contact information
• Threats of arrest or danger
• Asked to act in secrecy and/or with urgency

3. Business Email Compromise (BEC) Scams

Business Email Compromise, also known as BEC, targets business owners. It’s a favorite scam of cybercriminals due to its effectiveness and the substantial financial gains.

According to Microsoft, BEC occurs when criminals impersonate trusted leaders to trick employees into sending money or personal information. Unlike a mass phishing email, BEC scammers target their victims, hacking real accounts to send convincing requests or targeting executives directly.

Here are a few specific examples of BEC from the FBI:

• A vendor your company often works with sends an “invoice” with an updated mailing address.
• A scammer posing as your company’s CEO asks you to purchase a dozen gift cards to send out as employee rewards. The CEO wants the serial numbers so they can email them out to employees ASAP.
• A recent homebuyer receives instructions from their “title company” with instructions on how to wire their down payment.

Even a text from “your manager” asking for your number so they can discuss a “quick task” they need help with should be reported to your company’s IT department or verified offline.

🚩 BEC red flags:

• Urgent requests for personal information or financial transactions
• Poor grammar and spelling and/or odd tone
• Pressure for secrecy (e.g., a top-secret acquisition)
• Unknown number or email address
• Request for single form of communication, like text, with an excuse that they’re traveling or tied up in a meeting

4. Digital Payments and Cryptocurrency Scams

Cryptocurrency and bank transfers are a fast, easy way to move money, but they’re also a playground for scammers. Cryptocurrency scams alone resulted in $9.3 billion in losses in 2024, according to FBI data. This was a 66% increase in losses from the prior year.

In these scams, fraudsters trick people into sending money to fake crypto wallets or using shady bank transfer schemes. Once the money is gone, it’s nearly impossible to get it back because these digital transactions are often irreversible.

To protect yourself from these scams, only use trusted platforms, don’t send money to anyone you don’t know, be cautious of any request for a bank transfer or crypto transaction you receive, and stick to verified payment methods with consumer protections when possible.

🚩 Digital payments and cryptocurrency scam red flags:

• Unsolicited contact via phone, email, text or even social media
• Requests for sensitive information—or even a trip to the ATM
• Unusual payment methods or restrictions like gift cards, wire transfers for payment apps
• Urgency, demands for secrecy

5. Online Shopping and Marketplace Scams

The majority of U.S. adults—85%—said online scams and attacks are a problem on shopping sites and apps, the Pew Research Center reported in November 2025. 

What’s more, 48% said online hackers have stolen their credit or debit card information and made fraudulent charges, and 36% said they bought an item online that either was counterfeit or never arrived and wasn’t refunded.

There are a few different types of online shopping scams out there, including:

• Fake e-commerce sites: Fraudsters set up legitimate-looking websites that mimic popular retailers, luring shoppers with discounted prices on high-demand items.
• Social media marketplaces: Scammers sell goods on platforms like Facebook Marketplace or Instagram, only to disappear after receiving payment.
• Subscription traps: Consumers sign up for free trials or discounted offers but are unknowingly enrolled in expensive recurring subscription fees.

A few tips to keep you safe while shopping online include buying from trusted retailers, checking reviews, and using a credit card instead of a debit card. Credit cards typically offer better fraud protection. 

🚩 Online shopping and marketplace scam red flags:

• Too-good-to-be-true low prices
• Blank or brand-new selling profiles
• Pressure to pay before your receive the product (for in-person transactions via a marketplace)
• Urgency because there’s lots of interest or the deal is expiring soon, for example
• Asking to move off platform to communicate

Note that as an online seller, you can also be subject to scams. Say you list an item on Facebook Marketplace. Be wary of individuals who “accidentally” overpay and want a refund for the difference (the original payment may be fake) or ask you to ship the item before payment.

6. Tech Support Scams

According to the FBI’s Internet Crime Complaint Center, there were approximately 36,000 complaints related to tech support scams in 2024 with reported losses reaching more than $1.45 million. These types of scams were most reported by adults ages 60+.

Tech support scams typically involve fraudsters impersonating legitimate companies like Microsoft or Norton, claiming to offer assistance for non-existent computer issues. These scammers often use various methods to initiate contact:

• Pop-up warnings: Victims may encounter alarming pop-up messages on their screens that falsely indicate a virus or security breach. They may include a phone number for “support,” leading users to call scammers who then request remote access to their devices.
• Robocalls and emails: Scammers also utilize robocalls or phishing emails that appear to come from reputable companies, urging recipients to act quickly to resolve supposed security threats.

Once they gain access, scammers can steal personal information and financial data or charge victims hefty fees for services that do not exist. In many cases, individuals are convinced to make payments via cryptocurrency or other irreversible methods.

In December 2025, The New York Times reported that tech report scammers stole $85,000 from a retired lawyer. The man thought Microsoft was calling him to help fix his tablet, so he followed the caller’s instructions and downloaded remote access software. This gave the scammers access to his usernames and passwords, and they were able to wire money out of his bank account.

🚩 Tech support scam red flags:

• Cold calls, emails or texts about viruses, security threats or device issues
• Alarmist language and urgent warnings
• Requests for remote access or software installation
• Demands for unusual payments via gift cards, wire transfers, crypto or payment apps
• Asking for personal information like passwords, bank credentials or Social Security number

7. Check Fraud

You might think checks are a thing of the past, but scammers are still cashing in—literally. Check fraud continues to be a big problem, even in this day and age.

Here’s the gist of check fraud: Scammers steal, forge or alter checks to get money directly from your account. 

They might steal checks out of your mailbox, rewrite them or even create fake checks in your name. This method has become alarmingly efficient, with reports that anyone with a smartphone can download an app called Telegram and get access to stolen checks in minutes.

To protect yourself from check fraud, switch over to digital payments, use a secure mailbox and keep a close eye on your accounts for any unauthorized transactions. 

You’ll also want to stay vigilant when depositing checks. Scammers may try to get you to cash or deposit the check, then ask for you to send the proceeds back to them. When the check is later found fraudulent, you’ll be responsible for the funds sent to the scammer.

🚩 Check fraud red flags:

• Physical check issues (poor quality, missing security features, altered info, overpayment)
• Unsolicited checks and requests for refunds
• Pressure to act quickly
• Vague or unbelievable stories
• Checks from unknown or out-of-state banks

8. Advance Fee Scams

Advance fee scams involve fraudsters convincing victims to pay upfront fees for goods or services that never materialize, leading to substantial financial losses. 

The types of advance fee scams have diversified, with fake advertisements for loans, jobs and rental properties becoming increasingly common. They often begin with unsolicited communication which may occur through email, social media or phone calls, and promise individuals and businesses significant financial returns or opportunities. 

Once the upfront payment is made, the scammer typically disappears without delivering any promised goods or services.

Rental scams, a form of advance fee scams, have become increasingly common. The FTC recently issued a warning on rental scams, with more than 65,000 reports of these scams and about $65 million in losses since 2020. (Note these are only the scams that have been reported.)

With rental scams, scammers will make fake rental listings (often copying photos and descriptions from legitimate listings) and:

• Request an upfront application fee, deposit or first month’s rent to “hold” the property before you view it. They might even set you up with a “self-guided tour” to help convince you the property is legitimate.
• Say you need to show you’re creditworthy and send you a link to fill out.
• Ask you to complete an application with information like your Social Security number and a photo of your driver’s license. 

🚩 Advance fee scam red flags:

• Requests for upfront fees (processing, insurance, tax, deposit, loan, etc.)
• Urgency or pressure to act immediately
• Too-good-to-be-true promises, like getting credit regardless of your credit history
• Cold calls offering loans or other forms of credit
• Lack of verifiable credentials

How to Avoid Financial Scams

There are a lot of scams out there, but don’t panic. Avoiding financial scams starts with slowing down and staying skeptical—especially when money or personal information is involved.

Take these steps to avoid financial scams:

• Verify the source. Always confirm who you’re dealing with. Look up their name and contact information independently rather than relying on the links or number they provide.
• Never share sensitive information. Legitimate companies will never ask you for passwords, PINs or verification codes via email or text. If you’re ever in doubt, don’t share these details.
• Be wary of untraceable payments. This includes gift cards, wire transfers, crypto or peer-to-peer apps. Scammers like these payment methods because they’re difficult to trace and reverse.
• Use security tools. Enable two-factor authentication, use strong passwords and monitor your financial accounts for weird activity.
• Get a second opinion. Again, slowing down is key. Don’t get caught up in the scammer’s urgency; that’s their goal. Instead, reach out to a trusted friend, family member or financial professional for a second opinion.

What to Do If You Think You’ve Been Scammed

The probability of being subject to a financial scam is unfortunately high. If you’ve fallen victim, it’s important to take these steps:

1. Cease communications with the scammer immediately. Block their number or email address.
2. Contact your bank or payment provider to report the issue and attempt to block or reverse the transaction.
3. Secure your accounts by changing your passwords and turning on additional security features.
4. Document everything, including call logs, messages, receipts and contact details.
5. Report the scam to the Federal Trade Commission, FBI Internet Crime Complaint Center and your State Attorney General. If you feel you’re in immediate danger, call 911 or your local police.

Acting quickly can help minimize financial losses and prevent further damage, and reporting the crime can help the appropriate organizations investigate what happened and hopefully prevent the same crime from happening to others.