Fraud Awareness

Financial Wellness

Avoid the snares of schemers, scammers, and fraudsters

We want our members to be aware of the latest trends in consumer fraud, scams, and identity theft. Educate yourself so you can recognize potential schemes and protect yourself and your money.

At CAFCU, we’re here to help! Below is information about recent vishing, phishing, and smishing scams as well as tips for how to avoid becoming a victim. Staying vigilant is the first step toward keeping yourself safe.

Click below to read about the latest scams and frauds.

Protect Your Home: Spotting and Avoiding Mortgage Relief & Foreclosure Scams

Hidden Costs of "Easy Money" Schemes

Debt Collector Scams: How to Protect Yourself

Scammers posing as debt collectors are becoming more common, attempting to trick people into paying debts that don’t exist or that they don’t actually owe. These fraudsters use aggressive tactics, such as threats of legal action or arrest, and may demand payment through untraceable methods like wire transfers, gift cards, or cryptocurrency. While dealing with debt collection can be stressful, knowing the difference between legitimate collectors and scammers can help you stay protected.

How to Spot a Debt Collection Scam

Scammers often use the following tactics to pressure you into making a payment:

Calls About Fake or Unrecognized Debts – They may claim you owe money on a debt you don’t recognize and refuse to provide details. Legitimate collectors should always provide written validation of a debt.
Threats of Arrest or Legal Action – Scammers may falsely claim you will be arrested, sued, or have your wages garnished if you don’t pay immediately. Legitimate debt collectors cannot have you arrested.
Spoofed Caller ID & Fake Agencies – Fraudsters manipulate caller IDs to appear as reputable financial institutions or law firms. Always verify their identity through a trusted source before providing any information.
Demands for Unusual Payment Methods – If someone insists on payment through gift cards, wire transfers, or cryptocurrency, it’s a scam. Legitimate collectors will accept traditional, trackable payment methods.
Fraudulent Debt Settlement Offers – Some scammers claim you can settle a fake debt for a discounted amount. Once paid, they disappear, and any real debts remain unpaid.

How Legitimate Debt Collection Works

Debt collection is a regulated process, and real debt collectors follow strict guidelines:

They must provide a written validation notice that includes details about the debt.
They will not threaten arrest or use intimidation tactics.
They will accept secure and trackable payment methods.
You can verify their legitimacy by contacting the original creditor directly.

Steps to Protect Yourself

Ask for written validation – Request official documentation before making any payments.
Verify with the original creditor – Contact the company directly to confirm whether the debt exists.
Never share personal information – Scammers may try to steal Social Security numbers or financial details.
Stay wary of high-pressure tactics – If someone demands immediate payment, pause and verify before acting.
Report suspicious activity – If you suspect a scam, report it to the Federal Trade Commission (FTC) or the Consumer Financial Protection Bureau (CFPB).

Considering Debt Consolidation?

If you're struggling to keep up with multiple debts, consolidating or refinancing with a personal loan could be a smart option. But understanding your financial situation and exploring all your options is key. At CAFCU, our Money Compass financial coaching program can help you create a plan to manage debt and improve your financial well-being. Schedule a free coaching session today at www.cafcu.org/MoneyCompass.

Your financial security is our top priority at CAFCU. If you ever receive a suspicious debt collection call, take a step back, verify the details, and don’t rush into payment. Staying informed is the best way to protect yourself from fraud.

The Hidden Danger of Microtransaction Scams

When people think about financial scams, they often imagine large-scale fraud involving thousands of dollars. However, one of the most insidious forms of fraud is far less obvious: the microtransaction scam. This method involves fraudsters stealing small amounts of money from a victim’s account over time, often going unnoticed for weeks, months, or even years. While the individual amounts might seem insignificant, these scams can collectively cause major financial damage to victims while funding large-scale criminal operations.

What Is a Microtransaction Scam?

A microtransaction scam involves unauthorized small charges to your account, typically ranging from a few cents to a few dollars. These charges are intentionally small to avoid detection. Many people overlook minor discrepancies in their bank statements, assuming they are accidental or too insignificant to investigate.

Fraudsters exploit this complacency by targeting multiple accounts simultaneously, turning those small transactions into substantial profits. For example, if a scammer charges $0.99 to 10,000 accounts, they collect $9,900 in a single transaction.

How Microtransaction Scams Work

Microtransaction scams often begin with compromised account details obtained through phishing, malware, or data breaches. Once scammers have access to your information, they may test the waters with small, inconspicuous charges. These charges might appear under vague or misleading merchant names, making them harder to identify as fraudulent.

Sometimes, scammers hide these charges under the guise of legitimate transactions, such as app subscriptions, online services, or trial offers. In other cases, they may pose as a charity or anonymous donation platform, taking advantage of people’s trust.

Why Microtransaction Scams Are Effective

Small Amounts Go Unnoticed: Many people don’t review their bank statements thoroughly or assume small charges are part of their legitimate spending.
Automation: Scammers use automated systems to apply charges across thousands of accounts, quickly amassing profits.
Lack of Reporting: Victims often don’t report these charges, assuming the time and effort aren’t worth it for such small amounts.
Recurring Charges: Some scams involve setting up recurring microtransactions that gradually drain funds over time.

How to Protect Yourself

Monitor Your Accounts Regularly: Review your bank statements and transaction history frequently to identify unfamiliar charges.
Set Up Alerts: Use your bank or credit union’s notification system to receive alerts for all transactions, no matter how small.
Question Small Charges: If you see a charge you don’t recognize, investigate it. Contact your financial institution if it looks suspicious.
Be Cautious with Personal Information: Avoid sharing your account details or card numbers online unless you are confident in the platform’s security.
Report Fraud Immediately: If you notice unauthorized charges, report them to your financial institution as soon as possible. Acting quickly can prevent further losses.

How Credit Unions Can Help

At CAFCU, we prioritize your financial security. We offer tools like transaction monitoring, alerts, and dedicated support to help you catch fraudulent activity early. If you suspect a microtransaction scam, our team is here to guide you through the steps to secure your account and recover lost funds.

While microtransaction scams may seem minor at first glance, their cumulative effect can be devastating. By staying vigilant and taking proactive steps, you can protect your finances and prevent fraudsters from profiting off your hard-earned money.

Budgeting Apps Security Risk

Job Task Scams

Avoid Skimmers

Physical debit and credit cards used at in-store checkouts, gas station pumps, and ATMs are being compromised by fraudsters using skimming devices. A fraudster "skims" a card's information by placing a device within the card insert slot that can grab the specific details that are stored in the magnetic strip on the back of cards. They use this information to create a counterfeit card with a magnetic strip that now contains the same information as yours. Scammers are unable to create an EMV chip though, so they often use the card at readers that either do not have a chip reader or have a broken chip reader.

How to protect yourself from card skimming

Look out for skimmers with hidden cameras that record your personal identification number (PIN). These cameras are often placed above the reader or keypad and pointed toward where you will enter your pin. Watch for holes in those areas on the ATM. Another way skimmers will obtain your PIN is by using a keypad overlay to track which keys you press.
Watch for signs that an ATM has been tampered with, such as loose wires or machines that are not flush with one another.
Check for skimming devices placed over the card insert slot. Since card skimmers are designed to look exactly like the card insert slot, they might be challenging to spot, but there are a few tell-tale indicators that you can look out for, like not being flush to the machine, being raised or bulky, or having too much glue residue around them.
You can also try a touch test: Jiggle the reader around; if it moves, there is a chance that there is a skimming device attached to it. The same goes for the keypad. If any attachments seem loose fitting, haphazardly glued, taped, or jammed on/in the machine, be cautious and avoid that machine.

Protect yourself even more by avoiding machines or transactions that use the magnetic strip and opting to use these instead:

the EMV chip on your card
tap to pay (available at some terminals)
the mobile wallet on your phone

The reason these options are safer is because when an EMV chip or a tap to pay (utilizing NFC - Near Field Communication) is used to make the payment, it generates a unique one time tokenization code. This code is then sent to your financial institution where they are able to to match it to your account and approve the purchase.

To learn more about skimming scams and how you can protect yourself and your money, click here.

Merchant data breaches

Phony fraud alert text messages and phone calls

Protecting your mobile device*

When purchasing a smartphone, know the features of the device, including the default settings. Turn off features you don’t need to minimize the risk of attack.
Some phones have encryption available. This can be used to protect your personal data in the case of loss or theft. Ask your cellphone dealer if this is available on your model.
With the growth of the application market for mobile devices, be sure to look at the reviews of the developer/company who published the application.
Review and understand the permissions you are giving when you download applications.
Use a passcode to protect your mobile device. This is the first layer of security to protect the contents of the device. Also enable the screen lock feature after a few minutes of inactivity.
Obtain malware protection for your mobile device. Look for applications that specialize in antivirus or file integrity that help protect your device from rogue applications and malware.
Be aware of applications that use geo-location, which will track the user’s location anywhere. This application can be used for marketing but can also to assist a possible stalker and/or burglar.
Jailbreak or rooting is used to remove certain restrictions imposed by the device manufacturer or cellphone carrier. This allows the user nearly unregulated control over what programs can be installed and how the device can be used. However, this procedure often compromises the cellphone’s security, making it more vulnerable to attack.
Do not allow your device to connect to unknown wireless networks. These networks could capture information passed between your device and a legitimate server.
If you decide to sell your device or trade it in, make sure you wipe the device (reset it to factory default) to avoid leaving personal data on the device.
Smartphones require updates to run applications. Update your phone regularly to reduce the risk of the device being hacked or compromised.
Avoid clicking on or otherwise downloading software or links from unknown sources.
Use the same precautions on your cellphone as you would on your computer when using the Internet.

*Source: Federal Bureau of Investigations, IC3 (Internet Crime Complaint Center), October 2012.