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10 Tactics Scammers Use to Trick Credit Union Members

Excerpted from CUInsight article published June 30, 2020 by David Ver Eecke

Scammers are known for preying on victims’ vulnerabilities, such as financial hardship, fear and confusion. Given the particularly challenging circumstances surrounding COVID-19, people who believe they are savvy enough to avoid scams may still fall victim. 

Here are 10 common practices scammers keep in their arsenals to attempt to fool you and commit fraud. 

Faking an emergency. Scammers pretend to represent an official organization (like the IRS) and call, text or email victims to demand immediate money for bogus issues. They use threatening phrases such as, “Your 401k plan will be frozen,” “Your passport will be seized,” or “The maximum sentence for this crime is five years in prison and a $10,000 fine,” to catch you off guard and create a sense of urgency.

Expressing that resistance is ineffective. Once the scammer has created the emergency and instilled panic, they reinforce there is nothing you can do to remedy the situation. In the case of an IRS scam, they often tell you they must cooperate or face arrest or fines.

Rewarding cooperation with encouraging comments. Scammers sometimes try to play the part of a trusted friend, offering help and a way out of the emergency that would provide relief to you. They often tell you they seem like a good person and offer to help with the situation at hand.

Not allowing victims to hang up until they pay up. Phone scammers say it is a one-time opportunity for you to take action to avoid further consequences, and if you hang up the phone, you will not be offered another chance to resolve the problem.

Using official sounding titles and names for ordinary things. Scammers try to sound impressive to gain your trust. They use official sounding titles and names for merchants and everyday items. Examples include referring to a gift card as an “electronic federal tax payment system,” or instead of using the name of a store, they call it a “government-affiliated payment processor.”

Stating they are not asking for personal information upfront. Scammers know asking for personal information could raise alarm bells for you. Instead, they may say they are not looking to obtain this information, or they are not looking for an exchange of funds over the phone, which may cause you to let down your guard. This is why scammers often use gift cards to extract payment.

Signaling you are being recorded. In an attempt to sound legitimate, scammers say the call is being recorded and monitored by the IRS.

Threatening to alert the media. Scammers go to great lengths to keep suspicious or wary victims on the phone, and even go so far as to threaten to contact the media on behalf of the IRS if you do not comply with what is being asked. This is used as a last resort to salvage a conversation that might not be going well.

Exploiting engagement. Once scammers have you hooked, they may transfer the call to another fake agent in an attempt to further legitimize the call. Often, these scamming “call centers” employ multiple scammers who work together to make the initial call and then close the scam. Scammers are highly organized: some are responsible for getting members hooked, while others focus on closing the deal by extracting payment. They may say, “Please hold on the line, I am transferring the call to my senior treasury specialist,” or “Thanks for waiting, this is senior officer Matthews from the account department. My badge ID is…”

Insisting you keep quiet about special offers. If a scammer offers a special tax break, for instance, they will often demand that you not discuss it with anyone, as it would prevent them from getting the settlement. 

Campus Federal encourages you to report any suspicious activity you believe may be a scam as soon as it happens.