How to Spot and Prevent Phishing and Smishing Scams to Protect Your Credit and Finances

Introduction

Fraudulent scams are on the rise, with cybercriminals constantly finding new ways to steal sensitive information like passwords, credit card numbers, and even your identity. If you’re building credit or managing your finances, falling victim to these scams can have a devastating impact. That’s why it’s essential to understand how to recognize phishing and smishing attempts—and know how to protect yourself.

In this guide, we’ll walk you through the differences between phishing and smishing, how to identify these scams, and actionable steps to safeguard your credit and financial accounts.

Phishing vs. Smishing: What’s the Difference?

Phishing and smishing are two common ways scammers steal personal and financial information. While their methods differ, their end goal is the same—to trick you into sharing data they can use for fraud.

• Phishing: This scam happens through fraudulent emails or websites. Scammers send emails that appear to come from trusted companies, luring you to click on malicious links or attachments. These links might steal your login credentials, financial data, or infect your device with malware.
• Smishing: Smishing is phishing’s text message counterpart. Scammers send fraudulent text messages (SMS) pretending to be from trusted sources. These messages may include fake payment requests, warnings about suspicious activity, or verification code requests.

Both methods prey on fear, urgency, and confusion to trick you into acting quickly—often without double-checking the source.

How to Spot a Phishing Scam

Scammers use increasingly sophisticated tactics to make phishing emails look legitimate. Here are the key red flags to look for in suspicious emails:

1. Urgency or Alarm:some text
   • Phrases like “Act now or your account will be locked!” or “Verify your payment information immediately” are classic scams. Scammers want to scare you into clicking links without thinking.
2. Suspicious Email Addresses:some text
   • The sender’s email address may look similar to a trusted company but often contains typos or incorrect domain names.
   • Always compare the sender’s email to those listed on the company’s official website.
3. Suspicious Links or Attachments:some text
   • Hover over any links in the email to see the full URL. If it looks suspicious or doesn’t match the displayed text, don’t click it.
   • Avoid opening attachments from unsolicited messages—they may contain malware.
4. Requests for Personal Information:some text
   • Legitimate companies will never ask for sensitive information like passwords, Social Security numbers, or verification codes via email.
5. Poor Grammar or Formatting:some text
   • Spelling mistakes, awkward language, and inconsistent formatting are telltale signs of phishing.
6. Unfamiliar Tone or Design:some text
   • If the message looks very different from previous emails from the company (e.g., inconsistent logos or design), it’s likely a scam.

How to Recognize a Smishing Attempt

Smishing (SMS phishing) uses similar tactics as phishing but occurs through text messages. Since scammers know people trust their phones, smishing can be particularly dangerous. Here’s how to spot a smishing attack:

1. Requests for Sensitive Information:some text
   • Any text asking for personal data, like your credit card number, account login, PIN, or verification code, is suspicious.
2. Suspicious Links:some text
   • Text messages that include random links (especially shortened ones) are often attempts to steal information or install malware.
3. Fake Notifications or Alerts:some text
   • Texts claiming there’s suspicious activity on your account, a missed delivery, or unauthorized payments are common scams.
4. Unsolicited Attachments:some text
   • Legitimate companies rarely send attachments via text. Avoid opening any unsolicited files.
5. Poor Grammar or Spelling:some text
   • Just like phishing emails, smishing messages often contain typos or formatting errors.

Example of a Smishing Scam:
“Your card ending in 1234 was used for a $499 purchase. Was this you? Visit [link] to verify or cancel the transaction.”

Messages like these play on your fear of unauthorized spending. However, clicking the link often leads to a fake website designed to steal your personal or payment information.

How Phishing and Smishing Scams Can Hurt Your Credit

Phishing and smishing aren’t just about stealing your email password—they can have long-term financial consequences, including damage to your credit score.

Here’s how falling for these scams can harm you financially:

• Unauthorized Transactions: Scammers may access your credit card or bank account and make fraudulent purchases.
• Identity Theft: Your stolen information could be used to open new credit cards or loans in your name, leading to unpaid debts and credit damage.
• Account Lockouts: If scammers access your accounts, it may take time (and money) to regain control and restore your security.

Protecting yourself from phishing and smishing scams is critical, especially if you’re working to build or improve your credit.

Steps to Protect Yourself from Scams

Preventing phishing and smishing attacks requires a mix of awareness and proactive habits. Follow these steps to stay safe:

1. Be Suspicious of Unsolicited Messages:some text
   • If you weren’t expecting an email or text, approach it cautiously. Verify the sender before taking action.
2. Never Share Personal Information:some text
   • Legitimate companies will never ask for sensitive data (passwords, PINs, or verification codes) via email or text.
3. Verify Suspicious Requests:some text
   • If you’re unsure about a message, contact the company directly using official phone numbers, websites, or in-app support.
4. Avoid Clicking Links in Suspicious Messages:some text
   • Don’t trust links or attachments sent in unexpected emails or texts. Visit the company’s website manually instead.
5. Use Security Tools:some text
   • Install antivirus software and enable two-factor authentication (2FA) on all accounts for an extra layer of protection.
6. Monitor Your Financial Accounts:some text
   • Regularly check your bank statements, credit card activity, and credit report for unauthorized activity.

What to Do If You Fall Victim to a Scam

If you suspect that you’ve fallen for a phishing or smishing attempt, act quickly to minimize the damage:

1. Stop All Communication:some text
   • Do not respond to the scammer or provide further information.
2. Change Your Passwords:some text
   • Immediately update your account passwords, especially for financial accounts.
3. Contact Your Financial Institution:some text
   • Notify your bank or credit card company to block unauthorized transactions.
4. Monitor Your Credit:some text
   • Check your credit report for any suspicious activity. You can use credit monitoring tools to track changes.
5. Report the Scam:some text
   • Report phishing or smishing attempts to the company being impersonated and to government fraud agencies.

Protecting Your Credit with Ava Finance

Staying vigilant against phishing and smishing scams is essential, especially if you’re focused on building or improving your credit. Ava Finance, a trusted credit-building app, is designed to help you take control of your financial future. With tools like Ava Credit and Ava Save and Build Credit, Ava provides a secure way to improve your credit score without unnecessary risks.

By pairing smart credit habits with vigilance against scams, you’ll be well on your way to achieving financial freedom.