Lesson 1: Spotting Scams

Objective

By the end of this lesson, you will:

Learn how to identify common financial scams
Understand the red flags that signal fraud
Gain confidence in protecting your personal and financial information
Know what steps to take if you suspect a scam

Definitions

Scam: A dishonest scheme or fraud designed to trick people out of money or personal information.

Phishing: A fraudulent attempt to obtain sensitive information by pretending to be a trustworthy source (usually via email or text).

Ponzi Scheme: A fraudulent investment where returns are paid to earlier investors using money from newer ones, not from legitimate profits.

Imposter Scam: A con artist pretends to be someone you trust—like a government official, tech support, or even a family member.

Common Types of Scams

Scam Type	How It Works	Red Flags
Phishing Emails/Texts	Fake messages ask you to click links or provide info	Urgent tone, unknown sender, suspicious links
Investment Scams	Promises of high returns with little/no risk	“Guaranteed returns”, pressure to act fast
Romance Scams	Scammers build fake relationships to steal money	Won’t meet in person, asks for money quickly
Tech Support Scams	Fake techs claim your computer is infected	Unsolicited call, asks to control your device
Lottery/Prize Scams	Claim you’ve won money—but you must pay a fee to claim it	“You won!” when you didn’t enter anything
Imposter Scams	Pretends to be IRS, FBI, Social Security, or a loved one	Threats, secrecy, or emotional manipulation

How to Spot a Scam

🚨 Watch for these warning signs:

Unsolicited contact from someone asking for money or info
Pressure to act fast or secrecy (“Don’t tell anyone”)
Requests for unusual payment methods (gift cards, crypto, wire transfers)
Poor grammar, misspelled words, or strange URLs
Promises that are too good to be true

🔒 Rule of Thumb: If it feels wrong or rushed, pause. Scammers rely on emotional reactions.

Protect Yourself

✅ Never share personal info via email, text, or phone unless you initiated the contact
✅ Use two-factor authentication on financial accounts
✅ Check URLs before clicking—look for misspellings or fake domains
✅ Verify identities independently before sending money
✅ Report scams to FTC.gov, local law enforcement, or your bank

Activity: Real or Scam?

Review these 3 short messages. Decide if they’re safe or scams:

“Urgent: Your bank account is locked. Click here to reactivate immediately.”
“Hi Mom, I lost my phone. Can you send $100 to this number?”
“We noticed suspicious login attempts on your account. Visit your account on www.yourbank.com immediately.”

➡ Discussion: What clues helped you decide?

Reflection Questions

Have you or someone you know ever been targeted by a scam?
Do you feel confident identifying phishing emails or texts?
What’s one thing you can do today to make your digital life safer?

Further Resources

🌐 FTC Scam Alerts
🌐 IdentityTheft.gov – For reporting and recovering from scams
📚 Scam Me If You Can by Frank Abagnale

Lesson Wrap-Up

Scams are constantly evolving, but so can your awareness. By recognizing red flags and staying cautious, you’re building a financial defense system that keeps you—and your money—safe.

Action Step: Take 10 minutes today to check your account security settings and update your passwords.

Smart Investing For Beginners