How to Avoid a Financial Scam on Social Media

How to Avoid a Financial Scam on Social Media
Mike Randall
By: Mike Randall
Posted: November 8, 2013's popular "How-To" series is for those who seek to improve, rebuild or better understand their subprime credit rating.

Social media and social networking venues have become an integral part of how we communicate and keep up to date on all sorts of things these days.

Social media has become the favored method of connecting for some of us, but the aspect that makes social media such a helpful tool is the same thing that makes it an easy target for scammers.

In fact, the “social” part of social networking may have the effect of keeping us from worrying about possible scams.

Social media has become such an open venue for sharing and connecting that we rarely even consider the potential damage that can be created if the information we put online were to get into the hands of a criminal.

Many scams on social networks can be easy to spot or at least avoid, if you know what to look for.

In this guide, I will list some of the most pervasive financial scams on social media and how to avoid them doing damage to you financially.

Potential scams:

  • Malware (short for malicious software)

Facebook and other social media websites use links and attachments as ways for users to share information. The problem is you do not ever know what the attachment really contains.

If a social “friend” of yours gets hacked, the bad guys can send out all sorts of malicious software to their friends list. This software can then infect your computer and others in your friend’s network.

Therefore, look out for links and attachments that do not look like normal activity for those you know.

  • Social networking chain letters

It used to be that so-called chain letters were confined to email and were pretty easy to spot. These days, scammers have figured out new and creative ways to scam you using chain letters.

If you receive a letter asking you to contribute to a so-called “good cause,” the chances are it is not legitimate. Ask your friend where they found out about it and whether they can vouch for the authenticity.

“The links you get from

social media may be scams.”

  • Cash sob stories

It seems unlikely, but these days there are still people who fall victim to scammers asking for cash. The twist on this old scam is now these crooks can back up their stories with facts they find from your social media profile.

For example, if you post that your family is on vacation, a scammer may send a message to your friends and family saying you have been in an accident and they need to wire cash immediately.

The shock of such a personal and scary story can often trigger the immediate response of sending money. The problem is you are sending it to someone who is only posing as you.

  • Imposter web addresses

Any message sent to you via social media (or other email sources for that matter) can contain links to bogus web addresses.

Even though the website you see when you click on one of these may look legitimate, it could be an imposter website.

Look carefully at the URL, the address in your browser’s link window. Does the address look like what you would expect? Does it end in a “.com” or something else?

If not, these are signs you may have been directed to an imposter website.

  • Investment scams

The types of scams involving bogus investments are numerous on social media websites.

If you see a post from a friend recommending a sure thing investment or a way to cash in on something that “hasn’t been announced yet,” you can be assured it is not legitimate.

Again, check with the source to see if they have any idea what was sent.

  • Identity theft

One of the biggest scams on social media venues is the old-fashioned identity theft routine. By gathering enough information about you, anyone can then pretend to be you.

In order to avoid falling victim to social media identity theft, never give out your personal information. This means not filling out those online surveys, instant prize pop-ups, personality tests and more.

These can easily be used to capture too much information and duplicate your personal identity.

How to avoid scams:

  • Use caution when granting friends access to your social media profiles.
  • Know your privacy settings on each of your social networks.
  • Verify the social media settings in your computer’s security software.
  • Do not post your vacation status on a social networking site.
  • Do not click on links in messages that seem out of character from the sender.
  • Do not share your personal information. Provide it only when necessary and only after you have verified what it will be used for.

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