We know that the different companies and government agencies that have access to our financial and personal information try to protect that information using various methods and techniques. But hacks can and do happen from time to time. More importantly, scams that attempt to get you to divulge your personal information are growing in sophistication and are an ever-present risk in our world, particularly for those with substantial financial assets.
Scams come in a variety of forms, and there's not enough space to discuss them all. The IRS does maintain a list of common tax-related scams on their website if you're interested in specific examples.
So rather than focusing on a specific scam, we've identified ten tips that might apply to any scam. These ideas should help you spot and avoid a variety of potentially fraudulent activities.
Speak to a friend, your attorney, accountant, and/or financial planner and ask them for their professional assessment. You may be too close to the situation to recognize potential fraud, and a sanity check might help.
#3 If it seems too good to be true, it probably is
This is a time-honored technique and is going to hold up most of time.
#4 You probably didn't win anything
A new blender? A new car? A free boat? A trip to the Bahamas? $10,000? Probably not. People love free stuff, no matter their net worth - it's something that's built into our DNA. On the off chance that you did enter a drawing or lottery of some type and think you might have won, do not give away your personal or financial information to "confirm" or "validate" your winnings. See the other rules on this list and make sure that you conduct your due diligence.
#5 I just need you to confirm...
Someone from your bank calls or emails you to ask you to confirm your Social Security number or bank account number. It's probably not legit. The fact that the person was so nice doesn't matter, because...
#6 ...You need to be a little (or even very) cynical
Protecting your private information is an area where you need to be suspicious. You're not being mean, you're being prudent and methodical and you're managing your risks. You must understand that there are some people out there every day employing schemes and scams to try to steal your personal information and money.
#7 Focus on the information request, not the person making the request
I'm not a psychologist but I'm fairly certain that people are more likely to respond to a request from someone "nice" or "someone in need" or "someone with less". That's why it can be helpful to focus on the information being requested, not the person making the request.
#8 You're probably not the long-lost beneficiary on some account
Again, if you think you might be, proceed methodically. This is a situation that, if legitimate, will go through an official process - you'll be working with a local attorney or an insurance company or an investment firm, not emailing some person from a foreign country with an official sounding (though bogus) title.
#9 You don't need to respond to every email, voicemail and phone call
When it comes to your protecting your personal information, you don't owe everyone a callback. You need to apply your set of filters to determine who merits a response.
#10 Beware of communications that are time-sensitive, or threatening
"We need you to call back within 60 minutes to confirm your free big screen TV" or "If you don't remit payment for your past taxes within 24 hours we will garnish wages from your paycheck." The fraudsters are trying to get you to eliminate your methodical approach by getting you to make an emotional decision. Don't fall for it.