7 Financial Scams You Need to Be Aware Of
Key Points – 7 Financial Scams You Need to Be Aware Of
- Understanding Cybersecurity Risk Management
- Common Targets of Financial Scams
- Think Before Acting on Urgent Requests
- 9-Minute Read
Working to Protect Your Wealth Against Bad Actors
Imagine this. You’ve achieved financial independence. After years and years of hard work and diligent saving, you’ve finally reached the point where you can stop working and focus 100% of your time toward pursuing your goals in retirement. And then, poof — your savings are wiped out and your dreams dashed after becoming a victim of a financial scam.
It’s easy to say, “Oh, that could never happen to me. I’m careful and would never fall for that.” Being careful is critical, but as cybercriminals become more advanced with executing their attacks, we want to make sure that you’re taking the steps to reduce your risk against the many financial scams that are out there. Let’s review seven types of financial scams to be on the lookout for and how to combat them.
7 Financial Scams You Need to Protect Yourself Against
- Holiday scams
- Charity and disaster fraud
- Elder fraud
- Health care fraud
- Ransomware
- Tech support scams
- Spoofing and phishing
1. Holiday Scams
With the holidays quickly approaching, we figured it would be appropriate for this to be the first on our list of financial scams to protect yourself against. According to an October 2025 Adobe Analytics report, online holiday spending is projected to increase 5.3% from 2024 to 2025 to $253.4 billion despite uncertainty within the U.S. economy.1
However, as online holiday spending is on the rise, so is cybercrime. According to Cybersecurity Ventures, cybercrime costs are projected to eclipse $10 trillion in 2025.2 Before you make another online purchase, make sure to follow these four steps that we shared in another one of our cybersecurity blog posts, Cybersecurity Risk Management: Protecting Yourself from Cyberattacks.
- Use Strong Passwords
- Turn on Multi-Factor Authentication (MFA)
- Recognize and Report Phishing
- Update Software
We can’t stress enough how important it is to be vigilant as you’re shopping online. It can be exciting to find a good bargain, but ask yourself:
- Does this seem too good to be true?
- Is there a link on a website, email, or text that seems suspicious?
- Is the company (and company’s website) I’m purchasing from reputable?
- Am I being asked to wire money directly to a seller?
Holiday Scams Don’t Just Involve Online Shopping
The internet is one of many places where holiday financial scams occur. If you’re making a purchase over the phone and are asked to provide your payment or other personal information, think before you act. If you make the purchase, make it with a credit card rather than a debit card. Only provide that information if you initiated the call and verified that the company you’re purchasing from is legitimate.
The Grinch might be easy to spot, but cybercriminals can be much more difficult to detect. And the chances of a cybercriminal’s heart growing three sizes in one day like the Grinch’s and giving you your money back is very unlikely. So, if you’re in the giving spirit this holiday season, that’s great! Just keep in mind the precautionary steps we discussed while spreading your holiday cheer.
2. Charity and Disaster Fraud
Speaking of being in the giving spirit, that leads us to the second financial scam on our list: charity and disaster fraud. Unfortunately, scammers like to capitalize when disaster strikes to make a terrible situation worse.
For example, a typhoon hit western Alaska in October 2025 and displaced hundreds of people.3 Would you be inclined to contribute to relief efforts to help those who were impacted (or to fundraising efforts for a different cause that’s near and dear to you)?
In this case, the Alaska Community Foundation is a qualified 501(c)(3) operates the Western Alaska Disaster Relief Fund to help spearhead relief efforts.4 However, there were also several scammers that acted as if they were also fundraising for the typhoon relief efforts.5 Jeremy Zidek, Alaska’s Department of Homeland Security’s Public Information Officer, shared with Alaska News Source that these financial scams have included fake social media pages, websites, and phone calls that have targeted individuals who want to support the Alaskans who were impacted.
Verify the Legitimacy of the Charity You’re Supporting
Many people jump at opportunities to financially support causes they care about, especially in times of need. The cold, hard truth, though, is that scammers are now jumping at these opportunities as well. It’s important to be mindful of that so that your money is going to the cause you care about and not to scammers, as they could very easily take more from you than the amount you’re donating.
Our Modern Wealth team loves the fact that so many of our clients are charitably inclined. Before you donate to a charity and/or disaster relief fund, do a quick search on Charity Navigator to verify the legitimacy of the organization you’re giving to.6 You can also confirm if an organization is tax-exempt on the IRS’ website.7
As our tax team reviews year-end tax planning opportunities with our clients, charitable giving strategies are one of the main considerations. If you have questions about how to donate to charity in a tax-aware manner, don’t hesitate to reach out to our team with any questions and be on the lookout for our charitable giving content ahead of Giving Tuesday.
3. Elder Fraud
Another way that scammers capitalize on vulnerability is by preying on the elderly. According to the FBI’s 2024 Internet Crime Report, there were more than 147,000 fraud complaints from individuals 60 and older, resulting in $4.8 billion in losses in 2024.8
FIGURE 1 – 2024 Internet Crime Complaints by Age Group – FBI’s 2024 Internet Crime Report
There are a wide variety of financial scams that target seniors, such as tech support scams, government impersonation scams, and grandparent scams.9 Let’s review an example of a grandparent scam to help explain what to look out for and how to combat it.
An Example of a Grandparent Scam
In this hypothetical scenario, Mike and Cheryl have two grandchildren, Annie and Thomas. Mike and Cheryl are enjoying a relaxing day at home when suddenly, they get an urgent call from someone who appears to be Annie. They weren’t expecting a call from Annie, as she and Thomas were on a high school mission trip in Honduras.
The scammer impersonating Annie shared that Annie and Thomas have been arrested, and that Mike and Cheryl will need to post their bail of $100,000 apiece via PayPal for them to be released. There are a few initial red flags here.
- Why would Annie be calling Mike and Cheryl rather than their parents?
- Annie and Thomas have never been arrested before — this is out of character for them.
- Mike and Cheryl don’t even have PayPal accounts … and why would Thomas and Annie’s bail need to be posted via PayPal?
How Can These Scammers Seem So Real?
Again, scammers oftentimes like to capitalize on fear. Mike and Cheryl love Thomas and Annie and will do just about anything to ensure that they are OK. However, the scammer’s voice sounds exactly like Annie, though, and said that they were in Honduras. That’s because the scammer used AI to clone Annie’s voice and knew that Annie and Thomas were in Honduras after seeing Annie’s social media post.10 Still, even though the scammer sounds believable, there are a few other things Mike and Cheryl should do rather than immediately meeting the scammer’s demands.
- Ask the scammer things about Annie and Thomas that only Mike and Cheryl and other immediate family would know.
- Try calling Annie and Thomas on their cell phones.
- Also, consider calling the jail that they’re supposedly at, their parents, or someone with Thomas and Annie’s church that can get in contact with the youth group director or someone else on the mission trip to verify their whereabouts.
If you find yourself in a situation like Mike and Cheryl’s, remember that even though the situation seems dire, take time to think before you act. Don’t ever provide bank account or personal information unless you’re initiating the transaction and are 100% who is on the receiving end. The $200,000 that the scammer requested from Mike and Cheryl could end up being an even larger sum if the scammer gains access to their bank account information.
4. Health Care Fraud
Understanding your options for health insurance in retirement can be confusing, whether you’re eligible for Medicare or trying to bridge the gap until becoming Medicare eligible. Many scammers realize this as well and try to capitalize on the confusion via various health care-related financial scams. Being a victim of a health care scam includes risks such as:
- Unintentionally increasing your health insurance premiums … remember that your Medicare premiums are based on your Modified Adjusted Gross Income from two years prior (i.e.: IRMAA)
- Unintentionally increasing your taxes.
- Subjecting yourself to medical procedures that you don’t actually need.
Having health insurance coverage that meets you and your spouse’s needs without overpaying can be like trying to walk along a tight rope without falling. Scammers know this as well, which is why many health care fraud attempts involve trying to sell discounted health insurance. Ask yourself, “does this seem too good to be true?” and call 1-800-MEDICARE to verify whether the discounted health insurance is legitimate or a spoof.11
Another common health care-related financial scam involves scammers reaching out about new insurance cards. The goal of the scammer in this scenario is to obtain your financial or health care information or Social Security number. If you don’t need a new health insurance card, there’s no reason for you to provide that information. If you’re unsure about whether you need a new card, contact your health insurance company on a different line.
5. Ransomware
In the grandparent scam example we shared earlier, the scammer used ransom as a means to try to gain access to Mike and Cheryl finances and information. Paying a ransom is a big red flag to look out for when it comes to financial scams. Let’s talk a little bit now about ransomware.
Ransomware involves malicious software that blocks you from accessing files, drives, or other information on your computer. And in order to regain access to that information, you must pay a ransom.
All it takes for a scammer to execute a ransomware attack is for you to click on one link, ad, attachment, etc. that contains malware. You may not be aware of the ransomware attack until you see the ransom message. But by that point, the scammer has gained access to your computer and restricted your access on your machine.
So, how do you avoid becoming a victim of a ransomware attack? We’ve said it before and we’ll say it again — be careful when using your computer, phone, and other devices, especially when clicking on links and opening attachments. Hover over a link with your mouse before clicking on it to confirm the URL that it will take you to.
Additionally, regularly update your device’s software, back up your device’s data regularly and securely, and have anti-virus/anti-malware that runs regular scans.
6. Tech Support Scams
Speaking of technology, that leads us right into the next financial scam on our list: tech support scams. Technology can sometimes be your best friend, but that doesn’t mean that it can’t also be extremely frustrating — hence the need for tech support. So, how can you tell the difference between someone that’s truly providing tech support and a scammer that just wants your information or money?
With tech support scams, the scammer is the one who initiates the conversation. The scammer may reach out and tell you that something is wrong with your phone, computer, utility service, bank account — this list could go on and on. The scammer will say they’re with a company that provides tech support for those types of services and say that they can resolve your issue, but that you need to act quickly and pay a fee for it. These tech support scams may appear in the form of an unsolicited phone call/text or advertisement.
As with many of the other financial scam examples we’ve shared, the scammer is trying to get you to act upon fear to gain access to your personal/financial information. Just like with investment management, it’s important not to act upon the emotions of fear and greed. Take a moment, assess the situation, and remember that tech support employees won’t reach out to you about potential tech issues — they’re waiting for you to reach out to them. If you do end up on the phone with someone who you may suspect to be a tech support scammer, don’t let them have remote access to your device. That will likely give them the access to your personal/financial information that they’re looking for.
7. Spoofing and Phishing
Last, but certainly not least, let’s discuss spoofing and phishing, which are pillars of many email scams. Spoofing, phishing, and the other financial scams we’ve covered are all among the most common scams that the FBI deals with.12
Spoofing is frequently used in phishing attacks. It occurs when the scammer composes an email that appears that it may be coming from a colleague, business associate, or someone else you may know. However, the scammer makes a slight change to email address, sender’s name, or other email component.
For example, let’s say your boss’s name is Jonathan Johnson. The scammer that’s impersonating Jonathan sends you an email that says you need to contact him. Instead of the sender’s name being Jonathan Johnson, the scammer uses Jonathon Johnson — that’s the spoofing component.
The scammer indicates that there’s an urgent matter to contact Jonahtan about and contact him on his cell phone. Jonathan’s cell phone number is hyperlinked, but not to a link that will call Jonathan’s cell phone. Instead, it links to malware that grants the scammer access to important information about your company. That sensitive information is what scammers are after in phishing attacks.
Hopefully, you notice the typo in the sender name, report it as a phishing email, and delete it. If you didn’t notice the typo, hopefully you don’t click on the phone number. If you’re still unsure about whether it could be a spoofing email, contact Jonathan on his work phone or on his cell phone (but not using the link within the email) to make sure there isn’t an urgent matter you need to attend to.
Protecting Yourself from These Financial Scams
Being careful and not responding to unsolicited, urgent requests are key to protecting yourself from a wide range of financial scams. If you have accounts that have multi-factor authentication, make sure to set it up, as it serves as an additional layer of protection between the scammer and the information that they’re after. Additionally, be careful about what information you share about yourself online, especially on social media.
We hope that you don’t find yourself having to fend off scammers this holiday season. Before you do any online shopping, charitable giving, etc., make sure that you’re following these necessary cybersecurity risk management steps. You never know when someone like the Grinch may be trying to impersonate Santa Claus and try to ruin the holidays.
Protecting yourself against financial scams is a critical component to wealth management that many people don’t realize until after they’ve become a victim of a financial scam. To learn more about how to help safeguard your wealth and develop a plan that allows you to enjoy today, prepare for tomorrow, and connect with the causes you care about most, start a conversation with our team below.
Resources Mentioned in This Article
- Retiring at 50: Can You Do It?
- Short-Term, Mid-Term, and Long-Term Financial Goals
- Cybersecurity Risk Management: Protecting Yourself from Cyberattacks
- 5 Financial Planning Opportunities to Consider Before 2026
- Financial Advisors React to Financial Horror Stories
- Gifting and Taxes
- Health Care Costs for 2026: What You Need to Know
- The Medicare Annual Enrollment Period: Understanding Your Options
- Health Insurance Options for Retirees Under 65
- 2025 IRMAA Brackets (Income-Related Monthly Adjustment Amount)
- Navigating Economic Uncertainty: Special Market Update
Other Sources
[2] https://cybersecurityventures.com/top-6-cyber-threat-categories-shaping-2025/
[5] https://www.alaskasnewssource.com/2025/10/20/halong-disaster-relief-avoiding-ai-scams/
[6] https://www.charitynavigator.org/
[7] https://apps.irs.gov/app/eos/
[8] https://www.ic3.gov/AnnualReport/Reports/2024_IC3Report.pdf
[9] https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-frauds-and-scams/elder-fraud
[10] https://www.cbsnews.com/news/elder-scams-family-safe-word/
[11] https://consumer.ftc.gov/features/pass-it-on/health-insurance-scams
[12] https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-frauds-and-scams
Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.