4 Top Ways To Spot and Avoid a Scam, According to an Expert

Sat, Aug 30, 2025, 8:18 AM 6 min read

You’re relaxing at home, winding down for the evening, when all of a sudden, your phone rings. It’s not a number you recognize, but the area code matches yours, so you pick up.

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The voice on the other end of the line is urgent yet calm. They’re from your bank’s fraud department and even reference your bank by name. They know your full name and the last four digits of your account. They tell you they’ve detected “suspicious activity” — a large transfer request you didn’t initiate.

Concerned and caught off guard, you follow their instructions to “confirm your account number for security purposes” and move your funds to a “secure, temporary account” while the fraud investigation is underway — assuring you that you’ll be able to access the money again soon.

Sure enough, you soon find out — the hard way — that this friendly-sounding neighborhood fraud agent was not what they seemed. They were the real fraudster, and now your hard-earned money is padding their personal coffers. It’s unfair, but it’s a scam that Andrew Lokenauth, a financial expert who writes TheFinanceNewsletter.com and founder of Be Fluent in Finance, has seen before.

Throughout 15 years on Wall Street and in banking, Lokenauth has learned the ins and outs of how scams work — and how to stop them. As part of our Top 100 Money Experts series, GOBankingRates caught up with him to discuss the smartest ways to protect yourself from being scammed.

Is it a pain to create a variety of complex passwords for each of your accounts? Yes. Do you have to do it anyway to stop scammers from strolling into your finances and treating them like a personal piggy bank? Also yes.

“From my years at JPMorgan, I’ve seen too many cases of identity theft that could’ve been prevented,” Lokenauth said. “Let me tell you about a client who lost $50,000 because they used the same password across all their accounts. The scammer got into their email and, within hours, drained their savings.”

It’s a common mistake, Lokenauth said — one that even the experts make. “Don’t write your passwords down anywhere. I made that mistake early in my career and learned the hard way.”

Instead, he recommends using a password manager. “LastPass or 1Password are solid choices. I personally use LastPass to generate unique passwords for every single account.”

Another must? Multifactor authentication, or MFA. Lokenauth calls it non-negotiable for every single account, but especially financial ones.