3 Ways to Avoid Financial Scams in 2023

You don't have to be a victim.

We live in a digital age, and while that's a good thing from a convenience standpoint, it does open the door to more opportunities for financial fraud. Just think about the number of companies that have reported major data breaches in recent years. A single incident could leave thousands of consumers vulnerable to fraud and identity theft. And unfortunately, there's not much you can do individually to prevent a situation like that.

But that doesn't mean you have to just sit back and wait to become a fraud victim. There are a number of steps you can take to protect yourself financially. Here are a few to put into practice this year.

1. Don't respond to unsolicited communication

As a consumer and functional person, you might be reachable by email, text message, and phone on a perpetual basis. But one general rule to follow if you want to avoid falling victim to scams is to never respond to unsolicited communication with regard to a so-called financial matter.

You might, for example, get a phone call from someone claiming to be a representative of your bank asking you to verify your online banking password so as to not hold up your direct deposit. Give out that password, and you've just invited a criminal to empty out your savings account.

Similarly, you might get an email from your credit card company asking you to click a link to get your credit limit increased. Be careful -- it may look legit when it isn't.

A better bet in this scenario is to call the number on the back of your credit card, speak to a representative, and ask about getting a higher spending limit. And in the previous example, what you'd want to do is hang up and then call your bank back directly to make sure there's no problem with your account or scheduled deposits.

2. Shred all documents that contain personal data

If you're still receiving statements from your bank or credit card company by mail, it's important that you shed them rather than toss them out. If you don't shred those documents, a criminal could get a hold of your financial data and do something nefarious with it.

3. Sign up for electronic communications

In this day and age, there's no need to run the risk of having the information contained on different documents get into the wrong hands. Pretty much every bank, credit card company, and financial institution will allow you to sign up for electronic communications rather than receive documents in the mail. As long as you keep your various passwords secure, this is a much safer way to review your own financial data month after month.

Falling victim to a financial scam could have devastating consequences. A criminal could try to steal money from your bank account, run up charges on your credit card, or open new accounts in your name, which could ruin your credit if you don't catch it in time.

Avoiding financial scams could spare you a world of stress. So while you can't control massive data breaches, you can at least take some individual steps to safeguard your most sensitive information.