The Five Most Common Types of Financial Fraud and How to Prevent Them

Financial fraud continues to evolve as scammers develop increasingly sophisticated methods to steal money and personal information. From deceptive text messages to convincing fake websites, staying informed about current fraud tactics is your strongest defense against becoming a victim.

At Service Credit Union, your security is our priority. We want to help you recognize the most common types of financial fraud and provide actionable tips to protect your money and personal information before scammers can strike.

1. Phishing Scams: The #1 Digital Threat

Phishing attacks remain the most widespread form of fraud, typically delivered through emails, text messages or phone calls that appear to come from trusted sources. These deceptive messages pressure you to click malicious links, share personal information, or log into fake websites designed to steal your credentials.

Prevention strategies:

• Never click on links from unknown or suspicious senders
• Watch for misspelled URLs, urgent language or grammatical errors
• When in doubt, contact the company directly using official contact information from their website

If you’re targeted: Report and delete the message immediately. If you’ve already clicked a link or provided information, change your passwords right away and contact your financial institution.

2. Card Skimming: Protecting Your Payment Information

Keeping your credit and debit cards safe requires vigilance wherever you shop. Card skimming occurs when criminals install illegal devices on ATMs, gas station pumps or card readers to capture your card information. Once obtained, scammers can clone your card and make unauthorized purchases.

Prevention strategies:

• Use ATMs in well-lit, secure locations, such as inside your credit union branch
• Inspect card readers for anything unusual before inserting your card
• Always cover the keypad when entering your PIN
• Use contactless payments such as digital wallets to “tap to pay”

Pro tip: Digital wallets and services such as Google Pay or Apple Pay provide the most secure payment method and effectively prevent card skimmers from accessing your information.

If you suspect skimming: Monitor your accounts closely and report any unauthorized charges immediately. Many modern credit and debit cards include contactless technology that reduces skimming risks.

3. Identity Theft: When Personal Information is Stolen

Identity theft happens when criminals use your personal information—such as your Social Security number, date of birth or financial details—to open accounts, file tax returns or make purchases in your name without permission.

Prevention strategies:

• Shred documents containing personal information before disposal

Don’t miss Service Credit Union’s Shred Days for secure document destruction!

• Monitor your credit reports regularly for unfamiliar accounts or activity
• Create strong, unique passwords and update them regularly
• Never share sensitive information via phone, text or email unless you initiated the contact

If you become a victim: Place a fraud alert on your credit reports and contact all your financial institutions immediately. The Federal Trade Commission provides comprehensive recovery resources at identitytheft.gov.

4. Zelle and Peer-to-Peer Payment Fraud

While peer-to-peer payment apps offer convenience for quick money transfers, they can be risky when used with unfamiliar recipients. Fraudsters frequently pose as legitimate buyers or sellers online, requesting payments through these services. Once money is sent, recovery is nearly impossible.

Prevention strategies:

• Only use payment apps with people you know and trust personally
• Double-check recipient details before sending any money
• Be wary of urgent payment requests or deals that seem too good to be true
• Never send money to someone you’ve only met online

If you’ve sent money to a scammer: Contact your financial institution immediately. While peer-to-peer payments are typically not recoverable, quick action may help limit additional damage.

5. Account Takeovers: When Criminals Access Your Accounts

In account takeover fraud, scammers gain unauthorized access to your financial accounts and change login credentials, effectively locking you out. Once inside, they can transfer funds, make purchases, or use your account for other fraudulent activities.

Prevention strategies:

• Enable multifactor authentication on all accounts whenever possible
• Use unique, strong passwords for each account
• Stay alert to notifications about password changes or unfamiliar login attempts
• Review account activity regularly

If your account is compromised: Contact your financial institution immediately upon noticing suspicious activity. Change all related passwords and carefully review recent transactions for unauthorized charges.

Stay Protected: Your Fraud Prevention Checklist

What’s the most effective way to prevent fraud? Stay informed about current scam tactics, monitor your accounts frequently, and maintain healthy skepticism about unsolicited communications. Many scams succeed because people don’t expect them.

How can I protect my Service Credit Union accounts? Use strong passwords, enable account alerts, and never share login credentials with anyone. Trust your instincts—if something feels suspicious, verify before taking action.

What should I do if I suspect fraud? Contact your bank or credit union immediately. Quick reporting significantly improves your chances of limiting financial losses.

Financial Security Starts with You

While fraud can target anyone, developing good security habits and maintaining awareness of current threats provides strong protection. Know the warning signs, be proactive about account security, and don’t hesitate to reach out with questions or concerns about suspicious activity.

Your financial security is worth the extra caution: stay informed, stay vigilant and stay protected.