These are the 3 biggest financial scams in America: What to know and how to fight back

Considering that you spend most of your waking hours earning money, it only makes sense to keep the cash you worked so hard for safe from scammers. You probably know by now that identity theft is a biggie. But that's not the only scam you need to avoid. 

For all the talk about identity theft, it was actually just the third most reported scam in the country in 2016, according to the Federal Trade Commission. Debt collection scams were actually the most reported, followed by imposter scams, which the acting director of the FTC's Bureau of Consumer Protection, Thomas Pahl, called "a serious and growing problem".

These are the top consumer scams reported to the FTC in 2016, along with the percentage each made up of the 3 million total scam reports the FTC received.

Who gets scammed the most? Florida residents reported the highest rate of fraud, while Michigan residents complained the most about identity theft.

Happily for millennials, young people were among the least impacted by scams, with only 12% of the fraud complaints coming from people 20 to 29, versus 20% aged 60 to 69. Here's how to avoid the 3 biggest traps — and what to do if you've been scammed.

3. Identity theft

Identity theft is when someone represents themselves as you by using your personal identifying information, like your Social Security number or credit card account number to commit fraud or theft.

You may discover unauthorized withdrawals on your bank account and know immediately you are a victim of identity theft. You might find unfamiliar accounts on your credit report or get a strange bill in the mail. These are all signs that your identity has been compromised.

If you've been the victim of identity theft, call the companies where the fraud occurred, place a fraud alert, and report it to the FTC. Then follow the FTC's step-by-step guide to reclaim your identity.

How to protect yourself: To keep it from happening again, always keep your personal financial information secure. Never check financial accounts on a public computer. Always use a password on your mobile phone and any financial accounts you access on it. (And update your passwords regularly,) Lastly, consider getting a shredder for bank statements and other documents that would otherwise end up in the trash, where anyone can find them. The FTC has more tips here.

2. Imposter scams

Imposter scams play on your willingness to believe messages coming from a source that you know — or that you think you know. Thieves pose as friends, a computer technician, a company you've dealt with before or a government agency to induce people to send them money or provide information.

Government imposters are on the rise. Some examples include scammers claiming to be working for or connected with the IRS or the United States Citizenship and Immigration Service or, more boldly, a totally non-existent federal agency called the National Sweepstakes Bureau.

Thieves may also pose as a computer technician offering unnecessary software services or claim they are affiliated with a charity or company. They get you to answer the call or open the email because it seems to be an important message from a trusted source. 

How to protect yourself: Fakes are usually easy to spot. First of all, the IRS isn't going to call you if there is a problem with your taxes. They'll send you a letter. What do you do to avoid getting scam phone calls?

Be sure to enroll your cell phone and landline on the Do Not Call Registry. Once you've completed the free registration, there will only be a handful of solicitors that will be able to call you: charities, surveys, political groups and, yes, debt collectors (more on that below). If you still receive unwanted calls after 31 days on the list, you can report them to the FTC.

When it comes to suspicious emails, the best approach is not to reply at all. If you want to report the fraud, go to the website of the service you use directly (not through a link in the email, but through a billing link or internet search), then call or chat with a representative online to report the incident. 

If a friend sends you an email asking for money, well, it's a scam. You might want to alert them that their email account has been hacked, however.

1. Debt collection scams

Debt collection scams took the top spot. Even if you owe a student loan company or bank money, you have rights when it comes to how they collect it. Debt collectors break the rules by continuously, falsely representing the amount or status of your debt, by failing to send written notice of your debt and by falsely threatening to sue you. They may even try to collect on loans or debts that they do not have a right to collect on or debts that do not even exist. Even using profane language is in violation of debt collection rules.

How to protect yourself: If you are getting any of these kinds of calls, report them to the FTC. That's how companies get sanctioned. Last month a large debt collector, GC Services, was charged with using unlawful tactics to collect on federal student loans and other debts. They opted to pay a $700,000 civil penalty under a settlement with the FTC. 

And remember, never wire money to anyone. If you owe them money, always send it in a way that can be traced and verified in case you ever need to fight a fraudulent charge. But most importantly, be careful who you send money to in the first place.

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