How to keep your money safe from text message scams

PennyWise: Personal Finance & Travel Tips

Text messages warning of financial concerns will prompt users to click on a link or call a number to resolve an urgent matter. But that message is very likely an attempt to extract sensitive information. On the latest episode of PennyWise, host Nat Cardona is joined by Elizabeth Ayoola of NerdWallet to share tips on how to avoid a common text messaging scam.

Read more on NerdWallet here!

About this program

Nat Cardona is host of PennyWise as well as Lee Enterprise's true-crime podcast Late Edition: Crime Beat Chronicles. Lee Enterprises produces many national, regional and sports podcasts. Learn more here.

Episode transcript

Note: The following transcript was created by Adobe Premiere and may contain misspellings and other inaccuracies as it was generated automatically:

Welcome to Pennywise, the Enterprises podcast. I'm your host, Nat Cardona. Today, we're talking scams. There are a million types of scams to choose from, but our focus today are those sneaky little text message scams that find their way to your phone. We have NerdWallet personal finance writer Elizabeth Ayoola with us today, ready to share a few basic but important precautions you can take to ensure that you don't fall prey to a bank impersonation tax scam.

Scams are here. They're everywhere. They come in a million shapes and sizes and formats. Today we're talking about the top tax message scam that's putting your cash at risk. And I was really shocked to find it's under the guise of being your banking institution. So the first thing I want to get into is can you call to lay out what this could look like when it comes to your phone?

Yes. So you may get a text message and someone a strange phone number may send you a link or tell you, hey, you have to call me right away, because if you don't, you're going to lose money or you're going to be locked out of your account. I personally have gotten those messages before. And when it comes to your money, that can create a lot of urgency or fear within yourself because you're like, my God, you know what's going to happen to my money?

And I want to protect my stuff? So sometimes that allows people judgment and the first thing that they do is click on the link or call the number and what the scammer might do on that and is now try to extract sensitive information from you. So it could be your account number, your source code, your Social security number, your address.

And unfortunately what they could do with that information is an array of things they can set up auto pays with your information and deduct money from your account that way. And also in some cases as well, they can actually use your information to get credit cards out or take out loans, which can be terrible for people, which is why it's so important as well to check your credit report regularly, to check your bank information regularly and flag any suspicious information that you see on there.

Right. I've had this actually happen to me personally, but it was under the guise of of what do you call it, a masked phone number. It was the exact same number as my banking institution. I mean, it said the name everything and yeah, and it was the phone number and it was I mean, it's just insane. But the text message I haven't personally seen, so it'll probably pop up with urgency.

But then going off of what you just said is never makamu under pressure like Hastings. Always.

Now I have personally an email. I've actually email scam. I've fallen prey to. And again, it was that urgency. And they said that actually I was getting overpaid in taxes. So my first instinct was really, I'm getting money back. But then I was just like, okay, so they take me to some forum. And again, these things are really sophisticated.

They really mimic the institutions they say they are. And I filled out my account number, my shortcode and everything, and after I did it, I was like, Ooh, this probably was a bad idea. So it's very, very easy to fall prey to that. But just be sure, take a pause, no matter how urgent it is, and call your financial institution to confirm first.

Sure. Which leads me to my next point here. But don't call a number that's texted to you.

Please don't. And in your case, that's crazy because it looks like the same number as your bank.

So it was insane.

Yeah, that's really, really crazy. So definitely go to your Financial institutions website and, you know, get the number directly from there. And a lot of these institutions also have an app, you know, customer service contacts. So sometimes you can log into your app and call directly that way. So call in a secure way and not from the number that they give you for sure.

And actually under the same header that I just read about, don't call the number that's texted to you. It seems that the median loss of these texts scams could be in the amount of like $3,000. It's so it's not an insignificant amount of money. I mean, it's not a 25 bucks. They got a gift card out of you or whatever, right?

Yeah. No, it's not always a significant amount, but a good tip for people is to definitely if you can bank with FDIC insured banks so that even if you do lose money, you can get some of your money back. Most banks that I've worked with personally are pretty good, and I have less lost money through fraud before. In kind of returning those funds.

They will launch an investigation first. But, you know, sometimes you can recoup your money.

So let's get into that a little bit more. It's kind of the last major thing here is like the worst has happened. You fell prey to don't just get past the shame and the embarrassment. It is what it is. What do you do if you were unable to avoid that scam, what's the next stop waiting to take?

Well, the first thing that you want to do is you want to contact your financial institution and you want to let them know what has happened. So most banks usually have a fraud department, so you can report that to the fraud department. The second thing that you want to do is reporting it to an institution like your local police station, even the FBI or any kind of institution that can basically help you with that.

And the importance of doing that last step as well is to help other people. I know it's not necessarily your obligation to do that, but when you report these scams, hopefully they can, you know, get investigated and shut down if possible, so more people don't fall prey to it.

Sure. Sure. I've seen stuff even in my local news. I live in the Madison, Wisconsin area. And when there is an uptick in these things and it somehow leads just strictly in the same area, there's always usually a good news story about it, about, you know, X amount of people that have been dealing with something. So, yeah, it does help if you report these things.

So and this is a thought that's popped in my mind and correct me if I'm wrong with your expertise, but like your book is not going to text you. Well, they'll probably text you. You know, the banking texts that I get are very robotic, like you made a deposit in X amount of money and it's like, but I've set it up that way so I know what to expect.

But like otherwise you're not going to have Jane or Jim texted you like, gosh, right now, right?

You're not. You're not. But again, some people get thrown off card with like, you know, getting a random text message. And again, when it has to do with your money, you're like, my God, my God. So you're just not thinking about your bank or financial institution is. I hope they're not going to affect you. For my experience, they're usually not going to call you and tell you to call the strange number.

The most I usually get is an encrypted message that says, Hey, even if they send you a message on your app, log in to your app. You know, we have something that we want to tell you. So again, always just call and confirm first. I think that's the best practice.

So there you go. Anything else you want to add about this topic?

Yes, just generally, because I do have to say I'm not a financial investment advisor and because everyone's financial situation is different, this information is not personalized. So I do have to put that out there. But otherwise you can go on nerdwallet dot com and get more information about how to keep your bank safe and secure. I will also add that it's good safe practices to get two step authentication.

Most platforms offer that, so that's another another layer added added layer of protection where aside from adding in your password, they might send you a one time code as well that you have to put in. So scammers will find it a lot more harder to hack into your accounts if you have to step authentication. I know we hate doing this, but change your passwords regularly, even if it means just adding a one to the end of your existing password because you just never know who might have access to that sensitive information.

thank you for saying that, because when I fell prey to it, the two the two factor authentication, it just it really changed my world. Yes, it's annoying. I feel ridiculous to have to press extra links, but that added layer of security is actually in the last few years since this snafu had happened. Breathing easier every day. Yeah.

Yes. But when a friend of mine set up alerts with your bank from emails and text. So anytime suspicious, suspicious information goes on in your account, you get alerted about it as well.

All about that piece of mind. Well, thank you so much, Elizabeth.

You're welcome.

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