4 Major Warning Signs of Financial Fraud: How to Spot a Financial Scam

Middle-aged woman holding schnauzer dog browses online safely watching out for warning signs of financial fraud.

In today’s world, scammers have more tools than ever to separate you from your hard-earned money — especially as more people are spending time online and conducting business virtually.

Whether you’re trying to make smart investments or just protect yourself from being victimized, it’s important to know these major warning signs for financial fraud.

Keep reading to learn four signs to watch out for when it comes to protecting your identity and staying safe from financial fraud.

Financial Fraud Warning Sign No. 1: Unsolicited Contact

If someone contacts you out of the blue with an attractive investment opportunity or offer of money, this is a glaring sign you’re being targeted for fraud. 

Any unsolicited calls, letters, emails or knocks on your door should put you on high alert. Whether they’re coming from a slick-talking sales agent on the phone or an alleged royal via the Internet, these schemes are designed to make you poorer, not richer.

Unsolicited phone or email contact from seemingly legitimate sources should also put you on your guard. 

In these “phishing” scams, fraudsters impersonate actual businesses and financial institutions, trying to get you to click a link or call a number so you’ll give out your bank account number or open your electronic device to hackers. 

Always triple-check that the communication is from a contact you trust. Learn more about recognizing and avoiding scams online here.

TIP: Nowadays, everything is online or on your phone. However, that doesn’t mean your information is secure everywhere you tap. In this resource, learn why you need a secure (and complicated) password and get other tips on browsing and banking safely on-the-go.

Financial Fraud Warning Sign No. 2: Requests for Unorthodox Payments

A request for an unorthodox payment method, whether you’re the one giving or receiving, is a sure indicator of financial fraud. 

According to the Consumer Financial Protection Bureau, if you’re asked to send money by wire transfer, courier, prepaid gift card or any complicated scheme, you’re likely at risk. 

Wire transfers can be an especially bad idea because the transaction often can’t be reversed once you find you’ve been cheated.

Another clear warning sign is a request for access to your bank account, credit card or any other financial account. 

Man using computer and checking on fraud

Financial Fraud Warning Sign No. 3: Threats and Pressure

The more time you have to research a sketchy investment offer or consider a fraudulent request, the less likely you are to fall victim to a scam. Many fraudsters use pressure or even threats to get you to make a quick decision. 

The CFPB points out that pressure can come in a positive form, like a push to get you to act immediately on an offer or an investment before the opportunity is withdrawn. 

Pressure can also take more negative forms. If you’re being threatened with jail, a tax audit or other dire consequences for not taking action, a scam is likely afoot. Any type of guilt-tripping or intimidation should also put you on your guard.

Have you ever seen a message pop up on your internet browser claiming a virus has been found and that you should call the tech support number listed? Don’t do it – it’s likely a scam to get you to pay money to remove the nonexistent virus.

TIP: While financial scams affect everyone, seniors are common targets. Protect your loved ones from generational fraud, by keeping informed of the warning signs and behavior. Learn more about how to protect your loved one from generational fraud in this resource.

Financial Fraud Warning Sign No. 4: Offers That Are Too Good to Be True

You’ve probably heard this saying before: “If it seems too good to be true, it probably is.”

It’s advice that definitely holds true for financial matters.

Promises of market-beating investment returns, guaranteed or low-risk offers, and get-rich-quick schemes are all signs that you should avoid making a financial commitment. 

Your wealth management advisor is another good source to check with before making any risky financial decisions.

Try to avoid falling for offers based on secret or insider information that others can’t access. Even if this information isn’t false, acting on it could be illegal. 

Stay Informed and Protected With Minster Bank

It’s crucial to stay informed and alert when dealing with any aspect of your finances

As you move through the complicated and sometimes confusing world of personal finance, keeping these common warning signs in mind can help you avoid the schemes of cheaters and crooks.

At Minster Bank, we take protecting your identity and personal information seriously. Learn more about how you can defend yourself from scams and identity theft here.

Get Identity Protection Tips >>

Another way to protect yourself from identity theft is by shredding confidential documents you no longer need — safely. Throughout the year, Minster Bank hosts community shred events at our locations throughout the west-central Ohio and Dayton region.

Learn More About Minster Bank’s Community Shred Events >>


This blog was originally published by Minster Bank in November 2019 and has been updated in July 2023. Includes copyrighted material of IMakeNews, Inc. and its suppliers.


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