This blog post, produced by Switchboard with assistance from the Consumer Financial Protection Bureau (CFPB), describes how service providers can help clients prevent and report fraud, identifies common scams that often affect refugees and newcomers, and shares resources to build newcomers’ financial literacy. This blog post accompanies Switchboard’s information guide Reporting Scams and Fraud to the Federal Trade Commission.
Preventing Financial Harm
In the financial sphere, fraud and scams broadly refer to actions that cause someone to wrongfully lose assets or money. These may be caused by someone either known or unknown to the target of the scam and may occur when targets are tricked into revealing personal information or directly giving money, or when information is stolen without the target’s knowledge.
Newcomers to the U.S. may be especially vulnerable to fraud and scams as they are learning how U.S.-based financial systems operate and may not yet recognize what constitutes a reasonable request for personal information. Avoid judgment when helping newcomers avoid fraud and scams. Remember that scammers are creative and often convincing, and that newcomers may struggle to know who they can and cannot trust in their new country.
To help prevent financial harm, advise newcomers to:
- Be cautious with their personal information and only share it with trusted individuals and organizations. See CFPB’s Protecting Your Identity handout.
- Hang up the phone if someone calls asking for money. If needed, clients can verify the correct phone number for the institution and call that number directly to follow up.
- Pay attention to warnings from financial institutions.
- Be cautious about wiring funds.
- Set up alerts on bank accounts and credit cards.
Common Types of Fraud and Scams
Introduce clients to the following types of fraud and scams, and discuss how to react if they encounter behavior that may indicate attempted fraud:
- Imposter scams: Scammers may impersonate government agencies (such as the Internal Revenue Service, or IRS; Immigration and Customs Enforcement, or ICE; or International Organization for Migration, or IOM) with the intent to deceive newcomers into making payments. Advise clients to verify payment requests by contacting the official government agency through verified channels.
- Debt collection scams: Scammers pose as debt collectors for debts that newcomers may or may not be aware of. Newcomers should directly contact the company or person they supposedly owe to confirm this debt.
- Grandparent scams (or family-emergency or relative-in-distress scams): Scammers pose as a family or community member who needs money urgently or faces some form of distress. These scams are prevalent in immigrant communities. Clients should verify the identity of the person through a trusted mutual acquaintance.
- Lottery or prize scams: Scammers claim their target has won a prize and request personal information in order for the target to receive the award. Caution clients that it is very uncommon to win a prize they have not entered to win.
- Mail fraud or document theft: Advise clients to closely safeguard any documents with personal information, such as passport or immigration-related identification numbers. These numbers should only be given to trusted people or organizations.
- Romance scams: Scammers develop a relationship with their targets, usually online, before asking for money or bank information. Caution clients against sending money to anyone they don’t know personally.
- Affinity fraud: Scammers target people belonging to the same community or group as them.
Recognizing Red Flags
If a client falls victim to a scam, help them protect their information for the future (such as changing important identifying numbers or setting freezes on accounts) and discuss how they can identify important red flags going forward.
- Extreme urgency: If a client is being pressured to make an immediate decision or send money quickly, it may be because the person asking for the money wants to ensure there is no time to check if they are legitimate. Reputable agencies (especially government agencies) will allow time to verify information so clients can make clearheaded decisions.
- Inconsistent information: If the information someone is giving changes, it may be because their claim is fraudulent.
- Refusal to put things into writing: Reputable agencies will keep records of what is owed and what payments are needed. If someone refuses to provide documentation about a debt, for example, they may be attempting to defraud.
For more on red flags and how to navigate them, see this Spotting Red Flags handout from CFPB.
Reporting Fraud and Scams
If a client has experienced a scam, help them make a report to designated authorities. There are several places to report fraud and scams:
- The Federal Trade Commission (FTC) is the primary U.S. federal agency that handles financial fraud. Reports can be made anonymously. Reporting to the FTC will not resolve a specific instance of fraud for the client but will help ensure that the scam is documented, preventing future harm. The FTC also offers a Fraud Handbook for Recent Refugees and Immigrants, available in seven languages.
- The state attorney general and the local police or sheriff’s office can help respond to reports of fraud and scams.
- IdentityTheft.gov (operated by the FTC) covers the necessary steps required to report and recover from identity theft in cases where a client’s identity has been compromised.
- The Consumer Finance Protection Bureau (CFPB) can respond if a client has been treated unfairly or illegally by a lender or financial institution. CFPB implements and enforces federal consumer financial law to ensure that consumer financial products are fair, transparent, and competitive. Consumers can submit complaints online or over the phone at (855) 411-2372; this service is available in 180 languages.
Want to Learn More?
Personal finance and navigating fraud are complex topics that many find challenging. The following resources, available in multiple languages, offer accessible, easy-to-understand explanations of various topics in personal finance.
Resources from Switchboard
- Blog: Resource Collection: Financial Empowerment For Refugees And Newcomers (2023)
- Guide: Reporting Scams and Fraud to the Federal Trade Commission (2023)
- Evidence Summary: What works to improve people’s financial capability? (2023)
- Blog: Three Ways to Support Newcomers’ Personal Financial Health (2023)
- Archived Webinar: Navigating Personal Finance and Avoiding Scams: An Introduction for Direct Service Providers (2022)
- Guide: Promoting Your Clients’ Financial Wellbeing (2019)
General Personal Finance
- The Newcomer’s Guides to Managing Money (CFPB) (English, Spanish): Four-part guide that addresses basic topics in money management: how to receive paychecks, open a bank account, pay bills, and select financial services.
- Your Money, Your Goals Booklets (CFPB) (English; some available in Spanish): Simple content on bills, debt, credit, and growing savings.
- Your Money, Your Goals Toolkit (CFPB) (English, Spanish, and Chinese) helps providers hold productive conversations on money-related topics with clients. The toolkit includes companion guides for specific populations; individual tools, such as an income and benefits tracker and a debt action plan; and a full list of resources from federal government and national nonprofit agencies.
- MyMoney.gov Tools: Calculators, budget worksheets, and planning checklists to aid in financial decision-making.
- Financial Capabilities Video Series (International Rescue Committee) (Arabic, Burmese, Dari, Rohingya, Spanish, and Swahili): Three-part video series discusses financial resilience and credit, setting up online banking, and filing taxes online.
- Financial Well-Being Scale (CFPB): 10-question quiz to assess financial well-being and spark conversations about personal finance
- Sending Money Abroad (CFPB): Handout to help individuals know their rights and protections before sending money to friends and family abroad
Banking
- Can I Get a Checking Account Without a Social Security Number? (CFPB): Guidance on how to help clients without a Social Security number open a bank account
- Bank On: An organization dedicated to identifying safe, affordable banking and credit union options
- Comparing Financial Service Providers (CFPB)
- Checklist for opening a bank or credit union account (CFPB) (English, Spanish)
Budgeting and Money Management
- Making Your Way (CORE): Provider-facing lesson plans on budgeting and personal finance
- Make a Budget (CFPB) Handout
- Income and Benefits Tracker (CFPB)
- Money Smart for Young Adults (FDIC) Client-facing guide on money management basics
Building Credit
- How to Find the Best Credit Card for You (CFPB)
- Understand Your Credit Report (CFPB) (English, Spanish)
- Credit Builders Alliance Training Institute Provider-facing resource to enhance credit-building programming
