3 Impostor Scams and How to Avoid Them

At the heart of most financial scams are people pretending to be someone they're not—and they can be very convincing. In 2024, the No. 1 fraud category reported to the Federal Trade Commission was impostor scams.1
"We're seeing an impact across all client demographics; everyone's a target," says Peter Campbell, director of financial crimes risk management at Schwab, who points to three especially pernicious hoaxes:
- Investment club scams: Social media makes it easy for fraudsters to impersonate a legitimate investment professional—even someone familiar to you from Schwab—by creating fake profiles that use identical photos and similar usernames on platforms such as Facebook, WhatsApp, and X. They then encourage you to join an exclusive "investment club" that promises outsize returns—and to spread the word among your friends. The goal is to inflate a stock's price, so the fraudsters can cash out at an artificial high, potentially leaving you with significant losses.
- Relationship-based investment scams: Bad actors build relationships on Facebook, Instagram, LinkedIn, and gaming sites, gaining a victim's trust over weeks or months before ever mentioning money. Eventually, they share impressive cryptocurrency returns and offer to let you in on their secret—typically by directing you to a phony but authentic-looking website where you "invest" in a number of fake opportunities before the scammers disappear with your money.
- Tech support scams: Criminals often pose as representatives from your financial institution's fraud department, sending emails or texts asking you to approve or deny a recent transaction. Fearing fraud, you click the link—inadvertently giving the scammer access to your computer, phone, or tablet, and ultimately your accounts.
While Schwab is always working to proactively thwart scammers, you can also do your part:
- Know the red flags: "These scams all share a common warning sign: uninitiated contact," Peter says. "But they're effective because we're less likely to have our guard up when a communication appears to be from someone in a position of authority." In addition, beware of communications that convey a sense of urgency, require secrecy (the better to isolate you), or request any kind of payment, especially via cryptocurrency or peer-to-peer apps. "Schwab employees will never request financial or personal information via unsecure channels like messaging apps," Peter adds.
- Trust your gut: If any communication from a company seems the least bit suspicious, don't engage. Instead, call your institution's publicly available number to confirm the details—and report any suspected scams to the entity being impersonated to help combat future fraud.
- Assume your information is out there: Even if you haven't been targeted directly by a scam, chances are that some past data breach at a credit bureau, government entity, retailer, or utility has already exposed much of your important information to bad actors.
"Everyone should enable the security features available for their financial accounts—think two-factor authentication, biometrics like face and voice recognition, and a verbal password," says Lisa Lang, a senior manager on the Financial Crimes Awareness team at Schwab. "The more obstacles you can put in front of your financial accounts, the more likely that scammers will just move on to easier targets."
1Consumer Sentinel Network Data Book 2024, ftc.gov, 03/2025.
Discover more from Onward
Keep reading the latest issue online or view the print edition.

Want to learn more about financial fraud?
Explore more topics
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.
Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.
Investing involves risk, including loss of principal.
All corporate names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.
Digital currencies [such as bitcoin] are highly volatile and not backed by any central bank or government. Digital currencies lack many of the regulations and consumer protections that legal-tender currencies and regulated securities have. Due to the high level of risk, investors should view digital currencies as a purely speculative instrument.