Knowing red flags can help prevent phone scams

Red flags include callers who demand you wire funds or load money onto a prepaid card and send it immediately or callers who ask you to confirm confidential financial information.

Posted 9:48 p.m. Aug 10, 2015 — Updated 10:05 p.m. Aug 10, 2015

Criminals always seem to be one step ahead with their latest scam. But there are warning signs people can look for to make sure they’re not the next victim of a telephone scam.

By now, most people are familiar with the IRS scam. That's where scammers call warning taxes are owed and threaten arrest if payment is not made immediately. Other scenarios include the grandparent scam, and criminals who impersonate fraud investigators for credit cards.

Often, the scammers have just enough information, like a credit card number, to trick people into trusting them.

"The imposters may say they're investigating a fraudulent transaction and ask you to confirm you have the card in your possession by reading to them your security code,” said Consumer Reports money adviser Margot Gilman.

Giving out that number is a big mistake because it gives scammers everything they need to buy things with a card.

Red flags include callers who demand you wire funds or load money onto a prepaid card and send it immediately or callers who ask you to confirm confidential financial information, like credit and debit card numbers or Social Security numbers.

The IRS call is itself a red flag. The IRS never cold calls taxpayers demanding immediate payment

"You can also find out if a caller is legitimate by asking for their professional license number, their business name, phone and address. If they don't answer, the call is almost certainly a scam," said Gilman.

Another simple step you can take to protect yourself is demanding a validation notice be mailed to you verifying the amount of the debt and the creditor.

Any time you get a phone call out of the blue, call the creditor directly to verify the information. Look up the phone number and don't accept what the caller says.

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