Use the 5 P's of Fraud Schemes to Spot a Scam

Prize Scam text on phone

You're not the only one looking to fill your holiday stockings this season. While you're hunting for small gifts for loved ones, scammers are on the prowl for a much larger haul – their next victim. These bad actors use a variety of tactics to steal private financial information and holiday joy. Once they have access to credit card or bank account details, they can make unauthorized charges, drain your accounts, and steal your identity.

But when you recognize the five P’s of common fraud schemes, you can give them what they deserve – a lump of coal.

1. Fraudsters PRETEND to be from a known organization.

Scam artists often impersonate government organizations or companies you do business with, such as the Credit Union of Colorado. These criminals will also make up names that sound like well-known businesses or service providers and use technology to change the number displayed on your caller ID.

2. Fraudsters say there’s a PROBLEM.

These crooks know how to get your attention. They'll use scare tactics to get you to respond to demands for cash, gift cards, wire transfers, or account access. Victims are often convinced they need to open their wallets after being told they:

  • Owe back taxes 
  • Are in trouble with the law
  • Need to resolve an account issue
  • Are at risk of being physically hurt 
  • Have a family member in a financial crisis

The scammer always claims to have the solution but will only provide it in exchange for your money or private financial information.

3. Fraudsters PRESSURE you to act immediately.

Crooks want you to act fast and keep the communication secret. They might call, email, or text with threats to arrest, sue, or humiliate you if you don't immediately do what they say. They don’t want you to take the time to verify their story.

4. Fraudsters tell you to PAY in a specific way.

Thieves often insist that you pay by cash, gift card, wire transfer, or virtual currency like Bitcoin. These payment methods are not easily traced or canceled. Some will send you a fake paper check for more than the amount needed, tell you to deposit it, and instruct you to send them the difference.

5. Fraudsters ask you to claim a PRIZE.

Have you ever received an email, text, or phone call of congratulations for a contest or sweepstakes you don't remember entering? As enticing as the notification sounds, wise consumers ignore these attempts to lure victims into this common scam. Fraudsters will lie and say you've won money in a lottery or were approved for a free grant. But, there's one big catch – you must pay a fee to claim your alleged prize.

How to Avoid Scams

Awareness is key to avoiding scams all year round. Before acting on any unsolicited request for personal information, remember:

  • Impersonation scams take many forms. Government agencies and tech companies rarely call you out of the blue or send text messages demanding payment. If it's a legitimate request, they won’t mind if you call them back at the number displayed on the organization’s actual website.
  • Fraudsters manufacture fake problems and emergencies. Confirm claims of out-of-town accidents and legal trouble by contacting family or local law enforcement. Look up the number. Do not call the number provided to you by a caller or the one that appears on your caller ID - numbers are frequently faked!
  • Never pay to resolve a legal matter or claim a prize using virtual currency, cash, a wire transfer, or gift cards. These methods of payment are hard to trace and are most often associated with fraud schemes. You may not be able to dispute or recall transactions you authorize, even if you later discover it was a scam.
  • Credit Union of Colorado will NEVER ask you for a verification code, website password, or full activated card number over the phone, via text message, or email! Whenever you contact a financial institution regarding your account, you may be asked to verify your identity in other ways. You should never divulge financial details to someone who calls you out of the blue. 
  • If it feels off, it probably is. Lotteries, loans, and jobs do not fall through if you ask for a few hours to think about it. Trust your instincts! 

If you believe you may be the victim of a scam, we recommend using our Fraud Checklist to recover the security of your accounts and possibly your identity. Contact us immediately at 800-444-4816 if you suspect fraud related to your Credit Union of Colorado account. 

Additional Resources

We encourage our members to stay alert to potential fraud schemes. Your best defense is awareness. Our Risk Department recently found these specific scams to be on the rise across the country: