skip to main content

How Identity Thieves Work: Protect Your Money

By Elizabeth Whalen

  • PUBLISHED April 15
  • |

Make no mistake: Identity thieves are out to do more than steal your credit card numbers and go on a shopping spree. They want to get to your hard-earned savings. And they don’t just target huge company databases full of personal information. Scammers have developed a wide range of methods, some of which just might surprise you. Learn about their tactics so you can protect yourself, your identity and your money.
Sweetheart Scams
There’s nothing sweet about so-called sweetheart scams, which often start on online dating sites. The fraudster, who is often outside the United States, courts an individual via messages and gains their trust. When it comes time to meet in person, a sudden financial obstacle appears, and the scammer can’t travel unless the victim sends money—often a lot of money. The average financial loss from sweetheart scams is between $15,000 and $20,000. 
To protect yourself:

  • Stick to well-known and well-regarded dating sites.
  • Remain cautious about anyone you meet online, especially people overseas.
  • Be very careful if anyone you meet online asks for money. It’s probably a scam.


Tech-Support Pretenders
Some identity thieves pose as tech-support representatives. They try to persuade people that their devices are infected with viruses and then sell them a “solution.” That solution might be worthless software. Or, it might involve gaining remote access to a victim’s computer or installing malware that collects their personal information.
To protect yourself:


  • Never give passwords or control of your computer to someone you don’t know and trust.
  • Ignore messages claiming your computer is infected unless they come from the anti-virus software that you installed.
  • If you believe your computer is infected, call your anti-virus software company directly, using the phone number on the company’s official website or your software documentation.


Lottery Cons
Many people dream of winning the lottery, and con artists know this, and also how to turn those dreams into nightmares. They will contact victims claiming a big prize is waiting, just as soon as the victim sends money to cover phony expenses or provides personal information that the scammers can use to clean out the victim’s bank account.
To protect yourself:


  • Remember that no legitimate lottery asks winners to pay in order to get their prize.
  • Do not give anyone your personal information unless you’re absolutely certain the prize and the organization are legitimate.


Phishing Fraud
Scammers “phish” by sending messages that look legitimate but are, in fact, designed to collect your personal information and steal your identity. The messages can be emails, texts or phone calls.They can appear to come from banks, companies you do business with, or even friends or family members.
To protect yourself:


  • Only open links or attachments in messages if you’re certain they’re safe.
  • Be especially cautious if you receive a message that claims you’ll suffer negative consequences if you don’t act immediately.
  • Use two-factor authentication services whenever available.
  • If it’s from a bank or another institution, go to its website independently, rather than using the link provided in the email.


For more about phishing, see “How to Avoid Phishing.
IRS Imposters
Some scammers impersonate IRS agents to persuade victims to give up their personal or financial information or send money. Tax scammers will even take advantage of victims of natural disasters by making phony offers to help them get disaster-related tax relief.
To protect yourself:


  • Remember that the IRS typically contacts taxpayers through the U.S. Postal Service. Agents usually only call or visit in person after the IRS has already mailed notices.
  • The IRS will only ever ask for payment to be made to the U.S. Treasury.
  • In some cases, the IRS does hire private agencies to collect tax debt, and it lists those agencies on its website, so you can verify the source.

Fraud Targeting the Elderly
Identity thieves frequently target senior citizens. Phishing, lottery and tech-support scams are among the top 10 forms of fraud affecting the elderly. But the biggest risk to seniors is not from strangers. According to the National Council on Aging, 90% of all reported elder abuse, including financial theft, comes from the senior’s own family members. If you suspect a senior you know is being abused or defrauded in any way, contact your state’s Adult Protective Services program.
Staying Secure Online While Banking 
Identity thieves are constantly coming up with new ways to scam people. To keep your money safe online, always follow these additional tips.

  • Don’t rely on Caller ID to verify the source of a call. Con artists can make a call appear as though it’s coming from a legitimate source—or a local number—even when it isn’t. Fraudsters use this scam so often that it’s been given a unique name: “spoofing” or “neighbor spoofing.”
  • If you’re ever unsure about a message you receive, call back to confirm, using the publicly listed phone number for the organization. Independently verify the contact information of the organization, and don’t rely on the information the message, caller or emailer gives you.
  • Clear the cookies and cache of your browser to improve security. You can find instructions in your browser’s help menu.
  • Never use public Wi-Fi networks for personal or financial transactions.
  • Always log out of sites that have your personal information—including banks, shopping sites and social networks—when you’re finished using them.
  • Only visit secure websites. To check, simply look for “https://” at the beginning of the website address and verify that there’s a locked padlock icon next to it.
  • Report any suspicious activity to the appropriate agency. If it’s phishing, contact the Federal Trade Commission and the Anti-Phishing Working Group. Most companies and some federal agencies, including the IRS, have their own email addresses you can report phishing attempts to.

It’s always a good idea to deposit your money at a bank that’s a member of the Federal Deposit Insurance Corporation (FDIC), because your deposits are protected—up to certain limits —in case your bank fails. But remember, FDIC insurance doesn’t cover losses due to identity theft, so always be on guard to keep your identity, and your savings, safe.
Elizabeth Whalen is a freelance writer based in Berkeley, CA. She loves writing about business, financial services and sustainability.

Illustration by Justin Poulsen.

Read our companion piece, Identity Thieves: Protect Your Information.

Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now