A $1,200 check for a $700 bike. You'd lose $1,200.
The story so far Now that you drive, you list your old bike online for $700. A buyer messages right away: they'll mail a check for $1,200, and you just send back the extra $500 by payment app for "the mover." The check arrives and your bank app shows the money. It looks real. But two weeks later the check bounces: it was fake. The bank takes the $1,200 back out of your account. You've lost the $500 you sent and the bike you handed over. This lesson shows how scams like this work, how to spot them in seconds, and how to protect your identity.
A scam is a trick to get your money or personal information. Identity theft is when someone uses your information to borrow or buy in your name.
Americans reported losing $12.5 billion to fraud in 2024 (FTC). Most scams work on smart people, because they're built to rush you.
Learn the red flags, slow down, check by calling a number you already trust, and lock your credit with a free freeze.
Fraud analysts at banks spot strange activity. Cybersecurity analysts protect systems. FTC investigators track scams and warn the public.
What you're looking at: a sketch of a fake bank text, the kind of message called phishing. The hook hanging from the link is the trap. The red box names its two tricks: rushing you with fear, and a link to a website that isn't your bank's.
How scams work, and how to beat them.
Scams come in hundreds of costumes, but almost all of them use the same few tricks. Learn the tricks and you can spot a scam you've never seen before.
The four red flags
A red flag is a warning sign. Most scams show at least one: 1. Pressure: act now, or something bad happens. 2. A strange way to pay: gift cards, crypto, a wire, or a payment app to a stranger. 3. Asking for codes or passwords: no real bank ever asks for the code it texts you. 4. Too good to be true: you won a prize you never entered, or a stranger overpays you.
- The bike buyer
- Two red flags: too good to be true (paying $500 more than your price) and a strange way to pay (sending money back by payment app).
The fake check scam, in numbers
By law, banks have to let you use deposited money within a few days. But it can take weeks to find out a check is fake. When it bounces, the bank takes the whole amount back, and you owe anything you already spent or sent. "The money showed up in my account" doesn't mean the check is good.
- The "overpayment"
- $1,200 check − $700 price = $500 you send back.
- When it bounces
- The bank removes the $1,200. The $500 is gone, and so is the $700 bike: $500 + $700 = $1,200 lost.
Phishing: the fake message
Phishing (said like "fishing") is a fake text, email or call pretending to be your bank, a delivery company, or the government. The link goes to a copy of the real site that steals what you type. The fix is simple: don't click or call back from the message. Open your bank's app yourself, or call the number on the back of your card.
Tap every part of this text that's a red flag. There are 4.
URGENT: Your Riverbend account will be closed in 1 hour. We noticed a sign-in from a new device. Confirm it's you at riverbend-verify.net and reply with the 6-digit code we just sent you. Thank you for banking with us.
What you're looking at: a made-up phishing text pretending to be Riverbend, the bank from earlier lessons. Tap a part to check it. Found flags turn orange.
- What to do
- Don't tap the link and don't reply. Open the Riverbend app yourself. If something's wrong, it will show there.
Payment apps are like cash
Apps like Zelle, Venmo and Cash App move money in seconds, and once it's sent to a stranger it's usually gone for good. They're great for paying friends. With anyone you don't know, use a credit card: as you saw in Lesson 4.2, your fraud liability on a credit card is capped at $50, and you can dispute a charge.
- The $500
- Sent by payment app to a stranger: almost no way to get it back.
Identity theft, and the credit freeze
Identity theft is when someone uses your information, like your Social Security number, to open cards or loans in your name. Then the late payments land on your credit report from Lesson 4.1. The best shield is a credit freeze: a free lock on your report at Equifax, Experian and TransUnion. Lenders can't see a frozen report, so nobody can open new credit in your name. You can lift it for a day when you apply for something yourself. Also: use a different strong password for each money account, and turn on two-factor login.
- Cost of a freeze
- $0 at each of the 3 bureaus, by federal law.
- Your checkup
- Your free weekly credit reports at AnnualCreditReport.com show any account you didn't open.
If it happens to you
Act fast, and don't be embarrassed: scammers are professionals. 1. Call your bank or card company using the number on your card, and report the fraud. 2. Change your passwords. 3. Freeze your credit at all three bureaus. 4. Report it at IdentityTheft.gov (for identity theft) or ReportFraud.ftc.gov (for scams), which gives you a recovery plan.
- The bike scam
- Call your bank about the fake check, report it at ReportFraud.ftc.gov, and next time accept only cash or an instant bank transfer, in person.
Two minutes. Just listen.
Tap any line to jump to it.
Scam or legit?
Eight messages land on your phone. Read each one and decide: is it a scam, or is it legit? One try each.
What you're looking at: made-up messages written like real ones. The sender line shows who it says it's from, which a scammer can fake.
The logic, step by step.
Four questions check any message, call or offer.
Step 1: Is it rushing you?
- The Riverbend text
- "Closed in 1 hour" is pressure. Real banks give you time.
Step 2: How does it want to be paid?
- The bike buyer
- Wants $500 back by payment app: red flag.
Step 3: Is it asking for a code or password?
- The 6-digit code
- It's the key to your account. Nobody real ever needs it from you.
Step 4: Does the math make sense?
- $1,200 for a $700 bike
- No real buyer overpays by $500. Total at risk: $500 + $700 = $1,200.
Worked example: checking the Riverbend text
- Rushing? Yes: "closed in 1 hour."
- The link? riverbend-verify.net isn't Riverbend's real site.
- A code? Yes: it asks for the 6-digit code. That alone settles it.
- Check yourself. You open the Riverbend app: no alerts, no lock.
- Result. Scam. Delete it, and report it by forwarding the text to 7726 (SPAM), which carriers use to block scam numbers.
The anglerfish's glowing lure.
Deep in the ocean, where it's pitch dark, the anglerfish has a glowing lure that hangs in front of its mouth. Small fish swim toward the light, thinking it's food. By the time they're close enough to see the anglerfish behind it, it's too late.
What you're looking at: an illustration, not data. An anglerfish in the dark deep sea, its glowing lure out front, and a small fish heading toward the light.
Why this sticks. Phishing is named after fishing for a reason. The message is the lure: a prize, a warning, a great deal. Before you swim toward any light, look for what's behind it.
The page you'd copy down.
- FTC: Americans reported losing $12.5 billion to fraud in 2024.
- Four red flags: pressure, a strange way to pay (gift cards, crypto, wires, payment apps to strangers), asking for codes or passwords, too good to be true.
- Fake check: money shows up fast, the bounce comes weeks later. $1,200 check − $700 price = $500 sent back; lose $1,200 total.
- Phishing = fake message from a "trusted" company. Never use its link or number; open the app yourself or call the number on your card.
- Payment apps are like cash. With strangers, use a credit card ($50 max liability, disputes).
- Identity theft: someone borrows in your name. Shield: free credit freeze at all 3 bureaus, unique passwords, two-factor login, weekly free credit reports.
- If it happens: call your bank, change passwords, freeze credit, report at IdentityTheft.gov or ReportFraud.ftc.gov.
Fill in the blanks
Grab a friend or a study group.
Scam show-and-tell
Everyone finds a real scam text or email they've gotten (hide personal info). Take turns pointing out the red flags in each one.
Write the scam
In pairs, write a fake message using two red flags. Swap with another pair and see how fast they catch both.
Protect someone older
Scammers often target grandparents. Share the four red flags with an older relative, and the rule: hang up and call the number on the card.
Just you and your money.
These stay on this device. Nobody else sees them.
Exam-style questions.
Written the way a college exam would ask them. Each right answer on the first try is worth 10 xp.
On the job: you're the bank's fraud analyst
A customer, Mr. Lee, is 68. He calls your bank's fraud line, worried. Here's what happened:
- A man called him saying he was from "the bank's fraud department."
- The caller said Mr. Lee's account was hacked and he must move $4,000 to a "safe account" by payment app today.
- The caller asked Mr. Lee to read back a 6-digit code the bank just texted him.
- Mr. Lee hasn't sent anything or shared the code yet.
Your task: tell Mr. Lee what's really going on, which red flags gave it away, and what he should do now.
See a model answer
What's happening: it's a scam. The caller pretended to be from the bank. Real bank staff never ask you to move money to a "safe account."
Red flags: pressure (today, or lose it), a strange way to pay ($4,000 by payment app to a stranger), and asking for the code the bank texted. That code would let the scammer into his account.
What to do: don't send anything and never share the code. Hang up on that caller. We'll check his account together now; if anything looks off, we'll lock it and change his password. He can report the call at ReportFraud.ftc.gov. And from now on: if "the bank" calls, hang up and call the number on the back of his card.
Protecting what you've built.
What you're looking at: a map of where this lesson fits in the course. Read it left to right: the lesson that comes before, this lesson in the middle, and the lessons it connects to.
- Before · Unit 6Insurance: health, car and renters
- You are hereSpot scams and protect your identity
- Back · Unit 4Your credit score
- Back · Unit 1Bank fees and fraud
- Back · Unit 4Credit cards