LendingTree Academy

Ways you can spot (and avoid) a financial scam

Written by

Jonathan McFadden


July 24, 2019

If there’s one thing we understand at LendingTree, it’s this: Money makes people emotional. And when emotions are high, clear decision-making gets harder.

Enter the scammer. Whether it’s an email from an alleged prince in need or a phone call demanding a wire transfer to avoid jail time, scammers are always looking for ways to exploit people and steal their money.

You don’t have to be a financial whiz to identify a scam. You also don’t have to be wealthy or famous to become a victim. Here are a few things you can watch out for, so you know what’s legit and what’s a fraud.

“Send money or else”

If someone calls claiming you’ll get arrested or lose your job if you don’t pay them, they’re trying to steal your money. Scammers often use scare tactics to convince you to hand over cash. Legit companies won’t threaten to have you arrested for not sending money you don’t owe.

Common signs

  • Threats of jail time or job loss
  • Aggressive behavior
  • A sense of urgency or immediacy
  • Call from a local phone number, not a 1-800 line

Get rich quick! Live the lavish life you deserve!”

Pyramid schemes promise luxury living for little investment on your part. These con artists try convincing you to buy a product or service, sell it and then make commission based on how many people you can recruit to join the organization. Truth is, only the people at the top make money. Word to the wise: if it sounds too good to be true, it probably is.

Common signs

  • Income based on recruitment numbers
  • Requirements to buy a certain number of products to remain in good standing with the company
  • Promises of a lavish lifestyle

Wire money fast!”

Be careful if you get a call from a stranger asking you to wire money, even if they promise to share money with you. When you wire money, it comes directly out of your bank account, without any safeguards or restrictions. That makes it difficult to recoup your funds if you realize you’ve been tricked. Plus, recipients can retrieve funds from almost anywhere, making the money trail hard to trace.

Common signs:

  • Calls from a stranger or imposter requesting that you wire them money
  • Letters, calls or emails with instructions on how and where to wire money to someone you don’t know
  • Instructions to deposit a check (which turns out to be fake) into your bank account, withdraw cash and then send some or all the money in a wire transfer

“We’re suspending your Social Security number”

Scammers are not above posing as government employees. One growing scam involves the Social Security Administration. The scammers call you, saying your Social Security number will be suspended unless you wire money, load cash onto a prepaid or gift card, or verify all or part of your Social Security number. They’re trying to steal your money and identity. The Social Security Administration will never threaten your benefits over the phone and tell you to wire money or send cash (even if they use the SSA’s actual phone number).

Common signs:

  • Threats to suspend your Social Security number and/or benefits
  • Calls from a person who sounds robotic.
  • Requests to verify your Social Security number over the phone

“Your grandchild needs your help!” 

This tactic pressures would-be victims to wire money to help a family member in trouble. If you get a call like that, avoid the temptation to act right away. Talk to other relatives before you send the money.

Common signs:

  • Calls from a stranger that a loved one is in jail, a foreign country or in some other kind of trouble and needs money immediately.

Other scammer schemes:

  • Invitations to a free luncheon to hear about an investment that yields major returns
  • A message saying you’ve won the lottery (usually in another country), although you haven’t purchased a ticket
  • Emails or calls from a stranger asking you to load money onto a prepaid debit card and share the serial number with them
  • Repeated calls from a friendly salesperson trying to get you to invest in penny stocks, gold coins or “the next big thing”
  • A call or message from someone claiming to be a representative of “Lending Tree” (note the two words), requesting that you pay to use the marketplace. LendingTree is free to use. No one from LendingTree will ever ask you for money.


There are way too many scams to cover in one blog. Check out this list from the Consumer Financial Protection Bureau, along with tips on how to protect yourself from scammers.