Phone Scams - many and varied, but four solid ways to avoid them

When I think of phone scams, I think of four characteristics, all of which can work in your favor to avoid being a victim of those who seek to scam you out of your money. Let's look at each of the characteristics to see how we might be better prepared to detect a scheme to get our money. For each one, I'll present what I believe to be a good approach to foiling your caller and their bad intentions.

The first characteristic is distance. Thankfully, those on the phone aren't in your immediate presence where they can talk a good game and appear "on the stage" with their good act as well. The other advantage of distance is their inability to "read" your expressions. This will have to be done by reading your voice inflections. Distance is your friend when dealing with those who would like to have you become a victim of their phone scams. The caller knows that they're at a disadvantage because they're essentially making a cold call. Use distance to your advantage to shut down the show and save your dough.

The second characteristic of a phone scam is a lack of information. Generally, those running the scam will only have a small amount of information about you and your situation. The rest they need to get from you. That's where you can help draw the line and avoid being a victim. Look for a caller seeking information of a personal or financial nature, and that should tip you off to a potential scheme aimed at nabbing some of your money.

The third characteristic of telephone scams is timing. The scam must be run quickly because the caller knows that they only have a short while to abuse your good nature. They can't keep calling back over several days - that will only irritate you and make you suspicious that you're being pressured into something. They have to keep moving their base of operation to cover the "bread crumbs" that will lead to them, so everything has to be done quickly. Use this speed of operation to your advantage, and make anything that's hasty wave a red flag in your face.

Of course, the fourth and last major characteristic of a phone scam is asking for money or asking for access to it. If you haven't tumbled to the scam by now, the part associated with money should be the point in the conversation where your red flags start waving like mad.

Phone Scam Prevention

Let's use the four characteristics discussed above and build a pattern of behavior that can serve as a defense against phone scams. It may seem quite unnecessary, but plenty of smart people fall prey to scam artists every day. You don't need to be one of them. Remember, they are professionals at getting money through trickery.

I present this discussion of responses in the order in which I would suggest you apply the preventive measures.

Distance - this should be your first and best defense, and it should be easy, but it takes practice. If you have any doubt about the authenticity of the caller, what they're proposing, their questions, or anything else that doesn't feel quite right, simply say, "I'm sorry, I don't mean to be rude, but I have to hang up now. We'll have to talk later." Then, immediately hang up the phone, no matter what the caller on the other end says.

This immediately distances you from the caller and allows you to step away from the phone and do some thinking about the call. Giving yourself time to think is key to identifying a phone scam from a legitimate caller. Give yourself time to think by getting off the phone the moment you sense anything that doesn't feel right.

If you need to, practice politely hanging up on your friends. You can always call them right back and explain the matter. Whatever works for you, get accustomed to getting off of the phone when there is even the slightest hint of misbehavior on the other end.

Lack of information - most callers won't know much information about you. That takes too much time and preparation before the call. Therefore, they're skilled at finding out information about you and your situation while they're on the phone with you. The key to success if never give out information. You can tell them that as well.

If you ever speak with individuals involved in national security matters, their canned response to casual inquiries is "I can't talk about it." No matter how much you're interested in small talk or what they do for a living, or anything other than their personal life, they'll repeat the phrase, "I can't talk about it."

You can do much the same with any caller. Simply say, "Our policy in this household is never to give out information over the phone." It's what I was taught as a child. It's still a good approach to dealing with anyone who calls you seeking information. And, this applies to any information at all, for once you start giving out harmless information, you're on the path to providing more useful information. When it comes to credit cards, the phone scams often ask about what kind of card you might use, the expiration date, the name on the card, and then the card number. If you give them any of the harmless information, like card type and expiration date, you'll be more willing to give them all of the information, so don't give any information at all.

The key is to refuse to give out any information at all. Even if they ask the time of day, you should refuse, "I'm sorry, I don't give out any information of any kind over the phone." If they insist on getting information, then this should alert you to the idea that they're running one of the phone scams, and you distance yourself by hanging up.

Timing - the element of timing is essential for the scam artist. They need to develop a sense of urgency so you'll act now. If you delay making a decision and taking action, you allow yourself time to consider certain aspects of the call and often you'll catch wise simply because you've had time to think about it.

Look for the sense of urgency that the caller tries to instill in you. It may be that someone you know is in trouble, or it's a limited time offer, or there are just a few items let in their inventory, or there are others with large and immediate needs. It's all designed to instill an "act now" mentality to get you to cough up your dough before you have time to think about it.

So, your best defense is to get off the phone so you can think about it. Again, each of the phone scams requires timing that limits your ability to pick up on clues that you're being scammed. You need to turn that around and give yourself time to decide. An easy way to do this is to say, "I'll need to think about this. I don't make any money decisions quickly. Let me think about this, and we can talk about it later. Thanks for calling."

Often the people running phone scams will insist that you make a decision on the phone. Resist that temptation, and put time on your side. Simply repeat that you always take time to make money-related decisions, and this is no exception. Then, politely hang up.

Asking for money - you might be like me, tired of people asking for money as if I'm always a ready source of cash. If nothing else, when people ask for money or want access to your money, that should be a very clear and bright clue that there may be something amiss with the whole situation.

This is especially true if you're being pressured to part with your money quickly and with a sense of urgency. Assuming you've reached this far in the conduct of one of many potential phone scams, here is a series of questions that you ought to ask out loud.

  • What made you think that I would be interested in this proposal? What in particular about me caused you to dial my number? How did you get my name and number? These questions turn the tables and get the caller answering your questions. The answers will also help put the call in perspective.
  • Have you (the caller) purchased, invested or donated as you're asking me to do? Why or why not? Another way to put things in perspective, and you might even hear them squirm a little.
  • If I were to see this same opportunity while shopping or going about my daily business, would I buy, invest or donate, or would I simply go on about my business? Only you can answer that.
  • Is this something that I absolutely need to get involved with, or is it best to leave well-enough alone? Often, many things are just fine without you, no matter how good or urgent they sound, and you're better off not getting involved. If it was such a great thing, why do they have to solicit your involvement and convince you to participate?
  • Does the cost seem reasonable? If not, then get off the phone and think about it. Often phone scams wind up being for thousands of dollars simply because they need to make it worth their effort to stage a confidence game on people. Usually it's not for tens or hundreds of dollars, but thousands.

Here's an example of one of the real life telephone scams that happened to someone I know. Read it carefully. You'll see the elements that I discuss above. Thankfully, the elderly person that answered the phone did a good job investigating the circumstances involved, and caught wise before it went too far.

Done with Phone Scams, back to Money Making Scams

There certainly is a broad scope of topics here at Frugal Living Freedom. When you think about it, money permeates so very many activities in our lives, therefore, being frugal encompasses a wide range of interests, from being employed to taking a vacation, and just about everything in between. Enjoy the variety, pick up some new ideas, and start making frugality a part of your signature.

I'm a big proponent of being debt-free, and I mean entirely debt-free - no mortgage payment. It's not essential for financial freedom, but you'll love the feeling once you get there. If you didn't have a rent or mortgage payment, how much more could you do for yourself with your current level of income? I suspect plenty.

If you ever hope to see an abundance of wealth, you need to plug the hole in your boat. The wealthy don't necessarily make lots of money, instead, they know how to hang onto what they make, and make it work for them.