What You Need to Know About Phone Scams

1. Your smart phone holds a mother lode of data. It may be cordless, but, let’s face it -- you’re tied to your smart phone. You bank on it, check Facebook on it and call your Mom with it. Your smart phone may now even surpass your PC in the amount of valuable information it holds, from saved passwords to contact lists to GPS tracking data. As useful as that info is to you, it’s even more valuable to criminals.

2. Think before you click. A whopping four in ten users will follow an unsafe link on a mobile device this year, says mobile-security service Lookout. “The vast majority of people who run into mobile threats do so through clicking a bad link or allowing a suspicious download,” says Kevin Mahaffey, co-founder of Lookout. If it’s too good to be true or too enticing to be legitimate, ignore it. A common scam is a text, purportedly from your bank, claiming that there’s something wrong with your credit card and asking you to call a number, says Bill Hardekopf, of LowCards.com. When you phone in, you’re prompted to enter your account information. But you haven’t called your bank -- you’ve handed over your personal information to bad guys.

3. Scammers cast a wide net. Malware developers “are in their basements with their bags of Cheetos and they’ve figured out what a gold mine smart phones are,” says John Sileo, an adviser on protecting your digital privacy and reputation. Text phishing (known as smishing) is one of the key tools in a scammer’s toolbox. QR codes (bar codes that direct you to a Web site when scanned with your phone) and URL shorteners (think tinyurl and bitly) make it even harder to identify suspicious links and Web sites.

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4. That big bonus prize? It’s bogus. Be wary of text messages claiming you’ve won a gift card from a popular store, such as Target or Walmart. The link to access the store’s Web site is likely to send you to a phony site. In some cases, clicking the link could install malware, which may take over your phone. Up to 120,000 mobile-phone users were victims of last year’s DroidDreamLight -- malware that was concealed in as many as 24 seemingly legitimate apps in the Android Market.

5. “Toll fraud” could be down the road. The most common scam worldwide, says Lookout, is malicious code that prompts your phone to order ring tones or wallpaper without your permission. Your carrier charges you for the purchase, and the scammers collect the cash. Right now, toll fraud is limited mostly to Russia and Eastern Europe, but it could hit the U.S. soon. Early detection is key, so check your phone bill regularly for unusual charges.

6. You can fight back. If you’ve received unwanted messages or suspect fraud, register your complaint with the Federal Trade Commission. When you receive a spam text to your phone, immediately forward it to 7726 (which spells spam) to alert your carrier. You could download free anti-malware protection, such as Lookout, which will scan apps and links. But your best protection is to use your street smarts and ignore unsolicited downloads and text messages. If you’re not sure whether a message is real, contact the sender independently before clicking through.

This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine. It might be the best investment you ever make.