7 Red Flags of an Online Money Scam (and What to Do Instead)

One of the most common worries I hear from people nearing or in retirement isn't about the stock market.

It's this: "I'm afraid of getting scammed."

That fear makes sense. Scammers deliberately target people who have spent a lifetime working and saving. They're polished, patient and often very convincing.

The good news is that most scams follow the same playbook. Once you know the warning signs, they get much easier to spot.

1. Guaranteed returns. Every real investment carries some risk. Anyone promising high, guaranteed returns with no downside is either confused or lying.

2. Pressure to act right now. "This offer ends tonight." "Your account will be frozen." Urgency is designed to stop you from thinking it through or asking someone else.

3. A request to keep it secret. If someone tells you not to mention this to your spouse, your kids or your bank, that's a giant warning sign.

4. Unusual ways to pay. Gift cards, wire transfers, cryptocurrency, payment apps or cash sent by courier. Legitimate businesses and government agencies don't ask to be paid this way.

5. They contacted you out of the blue. An unexpected call, text, email or pop-up claiming to be your bank, Medicare, the IRS, tech support or a family member in trouble.

6. A new online friend who brings up money. Someone you met online, often warm and attentive, who eventually mentions an investment opportunity or a sudden need for money.

7. You can't explain how it works. If you can't describe in plain words how the money is made, or the answers keep getting more complicated, step back.

In medicine, we rarely make big decisions in a rush. Money deserves the same care.

Pause. No legitimate opportunity disappears because you took a day to think about it. Hang up, close the message, and walk away from the screen.

Verify. Contact the company yourself using a phone number or website you already trust, like the number on the back of your card or on a statement. Never use the number or link in the message you received. Before working with any financial professional, look them up on FINRA's BrokerCheck or the SEC's adviser search.

Talk. Run it by someone you trust: your spouse, an adult child, a friend or your bank. Scams lose their power when a second person looks at them.

And a few rules that never bend:

• Never share passwords or the one-time codes texted to your phone.
• Never let someone you don't know remotely access your computer.
• Never move money to "protect" it because a caller told you to.

First, there's no shame in it. Smart, careful people get caught every day.

• If money or account details were involved, call your bank or card company right away using the number you trust.
• Change any passwords you may have shared.
• Report it to the Federal Trade Commission at ReportFraud.ftc.gov, and online fraud to the FBI at ic3.gov.
• AARP's Fraud Watch Network also offers a free helpline for scam victims and their families.

Reporting helps protect the next person, too.

The best protection against scams is a plan you understand.

When you know your numbers, have a safety net and understand how your investments work, a "too good to be true" offer loses its pull. You don't need it.

That's the kind of steady, no-hype financial education Lisa and I share here.

If you'd like to start building that foundation, grab the free starter guide on our Financial Freedom page, or join us in the free Financial Freedom With Dr. Mike community.

And please share this article with someone you love. A two-minute read could save them a lot of heartache.

— Dr. Mike and Lisa

Educational disclaimer: This article is general education, not legal or personalized financial advice. Investing involves risk, including possible loss of principal.