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Fraud Prevention - 5 Steps to Protect Yourself

A masked man committing fraud in a dark room

Author: Tammy Doss

Fraud comes in many forms. A few of the most common are bank fraud which includes identity theft, fake check cashing and credit and debit card fraud. The best way to avoid being a victim of fraud is to stay diligent and check and reconcile your monthly bank statements, credit card bills and get your free annual credit report from any of the three credit reporting agencies (Trans Union, Equifax, or Experian).

Below are some good tips that will help you avoid being taken advantage of by a fraudster.

1. Only share your personal information on a ‘need to know’ basis.

The fewer people you tell your social security number and bank account numbers to the better off you are. This is not information that needs to be told to people outside of your Certified Public Accountant who prepares your tax return, The Social Security Administration and the Internal Revenue Service who do not make calls to you. (They will correspond with you through a letter so do not respond to Phishing or Phone Scams.) Your lawyer for Trust purposes, your employer on your Federal W-4 form and CA State DE-4 forms. Limiting others’ access can increase your chances of NOT being swindled or defrauded.

2. Just because you get a phone call, and it sounds official, take every precaution.

As mentioned above Federal and State tax agencies will send you a letter. If you receive a solicitation for a donation over the phone, simply ask the caller to send the paperwork in the mail if you are interested in supporting the cause. If they have your phone number, they can figure out your address to mail it. Do not tell them. It just adds fuel to the fire. It is one more piece of information they have in their arsenal. If they are legitimate, they will look it up.

3. Annual credit reports are necessary.

There are many ways that you can also get credit reports for a very minimal cost. Your credit card company and/or your bank will run them for you. Closing out credit cards or loans that have been paid off is imperative. Take the steps to get everything off your credit report that is no longer active. This must be a high priority. Someone who is out to defraud you and steal your identity may get ahold of an old credit card number or loan information and before you know it, they have charged multiple items or fraudulently stolen the deed on your property and then it’s up to you to clean up the mess they created.

4. Be careful with Pay Pal, Venmo and Zelle.

They are all ways to send and receive funds to and from friends, family and for purchases online or almost anywhere. Be sure you only do these transfers with people or companies you trust 100%. Having a record of transactions is the best way for you to track where your money is going and what money you have received. These companies provide a statement that needs to be reconciled monthly. You can get it by signing into their Apps. For tax purposes you will need the statements to show where you sent money for donations. For example, your family member is hosting a fund raiser and you send them $50.00. Unless you have the back-up, you may forget to deduct it on your tax return.

These companies may charge a small fee for instantaneous deposits or withdrawals. You have the choice to use the option of the money posting to your account within a 24-hour period or right away.

5. Use a Credit Card Over the Phone

Payment for purchases you make online or via phone should always be paid with a credit card if possible. You have a much better chance of being reimbursed by your credit card company than with a debit card. Debit cards make you vulnerable because they are linked to your bank account. Paying for donations or anything with cash may seem like a good idea but then when you take $200.00 out of your bank account and pay for a donation, food, gas or anything else you really have no record of how you spent your money unless you are great at keeping all receipts.

Be smart and safe with your personal information including your social security number, credit cards, banking information and debit cards. Save yourself from being a victim of all forms of fraud.


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