The 5 biggest financial scams financial experts have seen so far in 2021

Recently I have received weird emails and voicemails from people trying to sell me something or claiming to have steps I can take to get “rich quick”. I found this baffling, especially since I do a lot of online banking and investing. I wanted to make sure that my information was safe and that I wouldn’t be subject to hacks or identity scams.

According to Internet Crime Report 2020 By the FBI’s Internet Crime Complaint Center (IC3), nearly 800,000 Internet crime complaints were reported to IC3 in 2020, with losses exceeding $ 4.2 billion.

To make sure I got a feel for the latest financial scams out there, I reached out to a handful of financial experts to find out about the biggest financial scams they’ve seen so far in 2021. Here are the scams to watch out for for this year.

1. Synthetic identity fraud

According to Justin Nabity, a financial planner, one of the most recent types of fraud happening this year is similar to identity theft, but the hacker does not need to know the full identity of the person. It’s called “synthetic identity fraud. “

“It’s like identity theft fraud, but in this type of fraud, some information is stolen from an individual and some information is fictitious,” says Nabity. “For example, the name may be fictitious but the address is stolen in order to obtain authorization from an organization. This information is then used to open fake accounts and conduct transactions. In this case, the use of ‘an address can harm you. “

So how do you avoid this? Nabity recommends creating a unique and indecipherable password for each of your online accounts.

2. Worthless cryptocurrency

While cryptocurrency has been around for a while, 2021 has been a year when more and more people have started talking about it and showing interest in investing.

Financial planner RJ Weiss claims that one of the biggest financial scams to date in 2021 has been influencers pushing worthless cryptocurrencies to their audiences – without revealing they were being paid to do so.

“More often than not, they’re paid in currency, which they then sell once the price increases based on their recommendation,” Weiss explains. “The price then drops shortly thereafter, leaving their audience’s investment almost worthless.”

3. Theories of short compression

It seems like one of the buzzwords people will remember from 2021 is also the name of a company, GameStop, whose shares have exploded into a frenzy.

Asher Rogovy, an SEC-registered investment adviser, says that since the GameStop getaway earlier this year, stock bulletin boards have been inundated with short-squeeze theories.

“These messages are filled with disinformation, propaganda and nonsense. Many posters explicitly say to ignore market data contrary to their thesis,” says Rogovy. “The truth is, short-term interest across the market is at historically low levels. True short cuts are rare and are often confused with ordinary speculative bubbles. Nonetheless, bulletin board pumps and dumps are not new. stock market bubble. “

4. Money scams by celebrity impersonators

People are always on the hunt for the next best thing to invest in or make money in, and often when they hear a celebrity’s name they automatically think an opportunity has credibility.

Zach Reece, a CPA, says celebrity impersonator money scams are all the rage in 2021.

“The most publicized example is of people posing as Tesla CEO Elon Musk,” Reece said. “In a scam, Musk impersonators would claim they were hosting a ‘special event’ and post a link to it. People were told if they send Musk a certain amount of cryptocurrency within a lapse of time. in a very short time, they would get more (sometimes double the amount). “

Reece says to avoid this it’s important for people to understand that you will never be asked to send money first if you win a prize of any kind.

5. COVID-19 Stimulus Controls and Scams

With stimulus checks coming into people’s accounts all the time and so much confusion over COVID-19 relief programs, scammers have found an opportunity to take money from people in different ways.

Howard Dvorkin, a CPA, says the most common scams of 2021 so far have involved stimulus checks.

Whether by text, email or phone call, these scammers have all told the same lie, that you have to ‘confirm’ your personal information before you can receive your check. Social Security and other data, you’re toast, ”Dvorkin says.“ One variation of this scam offered “COVID relief grants” in addition to your stimulus checks. Of course, to apply for these substantial grants, you had to hand over all the personal data that these crooks could sell to even worse people who would use your credit cards and loot your bank accounts. “

Jen Glantz is the founder of the viral company Bridesmaid for hire, the creator of the project Finally the bride, the voice of the podcast “You are not getting any younger,” and more.

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