Common Scams and Frauds: How to Protect Yourself

Learn about common scams & frauds related to healthcare fraud, advance fee fraud, Nigerian scam & more & get tips on how to protect yourself from becoming a victim.

Common Scams and Frauds: How to Protect Yourself

Fraud and scams are a growing problem in today's world. With the coronavirus pandemic, the risk of becoming a victim of fraud has increased. It is important to be aware of the most common scams and frauds and to know how to protect yourself from them. Healthcare fraud is a type of fraud that does not directly target your money.

Instead, criminals use your health insurance information to pay for medical bills. This is also known as medical identity theft. Advance fee fraud, also known as upfront fee fraud, is any scam that promises to free you from debt in exchange for a fee or down payment. Victims can lose their property, incur additional debt, damage their credit rating, risk identity theft, or face legal action.

The Nigerian government warns against the Nigerian scam, which involves fraudsters posing as government officials who ask victims for help transferring millions of dollars out of Nigeria in exchange for a percentage of the funds. They ask victims to provide their name and bank account number and other identifying information and to send checks to pay bribes or legal fees. The perpetrators can also use the personal information received to empty the accounts and credit cards of victims. Cashier's check fraud is another common scam.

Fraudsters take advantage of the trust that people place in cashier's checks to steal money from your account or to avoid paying you for goods and services. Fraudulent cashier's checks are difficult to detect. When you deposit a fraudulent check into your account, the law requires your bank to make the funds available to you within a specified period of time, even if the check has not yet been settled through the banking system. Once the check is returned unpaid, your bank can generally void the deposit in your account and charge you the amount of the deposit. Identity theft is a serious crime that occurs when someone uses your personal information without your permission to commit fraud or other crimes.

The Federal Trade Commission (FTC) estimates that up to 9 million Americans suffer from identity theft every year. You should check your credit report and credit card statements frequently to verify that you have made the charges shown. Mortgage fraud is another common crime that is often carried out by real estate and mortgage professionals who misuse their specialized knowledge and authority. The FBI deals with thousands of mortgage fraud cases each year. Robocalls offering to lower credit card interest rates in exchange for a fee are often scams. In addition to paying a fee for not receiving any services, some of these fraudsters request personal information that they then use to commit identity theft. Fake charities use similar techniques as legitimate charities to raise funds.

Before you donate, make sure you know where your money is going. Prize and lottery fraud goes by many names: sweepstakes, sweepstakes, foreign lotteries and more. This type of fraud is usually aimed at older adults and originates with a phone call or a postcard. The FTC receives tens of thousands of complaints about prize and lottery fraud every year. Agencies that help prevent consumer fraud include the Federal Trade Commission (FTC), the state attorney general's office, and the Consumer Protection Agency (CPA). Scammers often target seniors and college students, but all consumers are at risk of fraud. It is important to be aware of these common scams and crimes and take steps to protect yourself from becoming a victim.

Check your credit report and credit card statements frequently, be wary of robocalls offering lower interest rates on credit cards, research charities before donating money, and be aware of prize and lottery scams.