Fraud Types

Internet, Mass Marketing, Mail, Wire, & Telephone Fraud

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Social Media Fraud

A growing trend on many social media sites, in particular Instagram, has been the creation of fraudulent accounts to employ an old money-flipping scam. A fake social media account is created. Next, a "friend request" is sent to a fellow social media user with some story seeking help with a business transaction.

The fraudulent social media account will sometimes include official-looking logos for a particular financial institution to imply some sort of legitimate affiliation with that institution. The user is then promised an income of thousands of dollars a month in exchange for establishing an account at the particular financial institution to facilitate some sort of money exchange. 

No matter how official-looking the logos or convincing the story, people should NEVER give access to their financial accounts. At the least, this can result in losing all funds in that account, at worst, a victim could end up owing the financial institution thousands of dollars.

For more information on these types of fraud, and steps you can take to protect yourself, visit this informative article on Fraud.org, a project of the National Consumers League.

 

Mass Marketing

Mass Marketing Frauds can target anyone. Victims are lured with false promises of significant cash prizes, goods, and services, in exchange for upfront fees, taxes, or donations.

• Credit and loan fraud includes a variety of scams that target folks applying for credit and dealing with debt.
• Advance-fee loan scams involve charging an upfront fee to guarantee a credit card or loan before you apply. These offers are illegal and often target people with credit problems.
• Debt settlement scams include deceptive ads that promise debt relief when in fact they are offering bankruptcy, and others that promise bogus creditor negotiation services in exchange for money.
• Mail fraud is a scheme to get money or something of value from you by offering a product, service, or investment opportunity. If any part of the fraud involves the use of the US Mail, it is considered to be mail fraud. For more information on mail frauds, how to protect yourself, and what to do if you have think you have been a victim, visit USPS at:
• Consumer Fraud by Phone or Mail
• Guide to Preventing Mail Fraud

Mortgage, Loan, Lending, and Related Fraud

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Traditional Mortgage Fraud

This is a type of fraud in which homebuyers and/or lenders materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan than would have been obtained had the lender or borrower known the truth.

 

Mortgage Rescue & Loan Modification Scams

Many so-called foreclosure rescue companies or foreclosure assistance firms claim they can help struggling homeowners save their home from foreclosure. Some even offer a money-back guarantee. Unfortunately, most of these foreclosure fraudsters take the money and run. Before committing, verify that the organization is legit by contacting the Better Business Bureau.

 

Reverse Mortgage Scams

A reverse mortgage is a special type of loan that enables senior homeowners, ages 62 and over, to convert some of the home equity into cash without selling the home or having to make monthly payments. Reverse mortgages can be useful products, but unfortunately have been associated with deceptive practices and allegations of high-pressure sales tactics and the risk of being steered into inappropriate loans and annuities. For more information regarding reverse mortgage facts, visit the FTC.

 

Wire Fraud Schemes

Criminals begin the wire fraud process long before the attempted theft occurs. Most often, this can take the form of email messages, website forms, or phone calls to fraudulently obtain private information. Through seemingly harmless communication, criminals trick users into inputting their information or clicking a link that allows hackers to steal login and password information.

Once hackers gain access to an email account, they will monitor messages to find someone in the process of buying a home. Hacks can come from various parties involved in a transaction, including Real Estate agents, title companies, attorneys, or consumers. Criminals then use the stolen information to email fraudulent wire transfer instructions disguised to appear as if they came from a professional you’re working with to purchase a home.

If you receive an email with wiring instructions, don’t respond! Email is not a secure way to send financial information. If you take the bait, your money could be gone in minutes.

The American Land Title Association provides these five tips to protect against wire fraud...

1. Call, don’t email: Confirm all wiring instructions by phone before transferring funds. Use the phone number from the title company’s website or a business card.
2. Be suspicious: It’s not common for title companies to change wiring instructions and payment information.
3. Confirm it all: Ask your bank to confirm not just the account number but also the name on the account before sending a wire.
4. Verify immediately: You should call the title company or Real Estate agent to validate that the funds were received. Detecting that you sent the money to the wrong account within 24 hours gives you the best chance of recovering your money.
5. Forward, don’t reply: When responding to an email, hit forward instead of reply and then start typing in the person’s email address. Criminals use email addresses that are very similar to the real one for a company. By typing in email addresses you will make it easier to discover if a fraudster is after you.

 

Tax Fraud

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Schemes that offer instant wealth or exemption from your obligation as a United States citizen to file tax returns and/or pay taxes are types of tax frauds. Participating in an illegal scheme to avoid paying taxes can result in imprisonment and fines, as well as the repayment of taxes owed with penalties and interest. For more information on tax frauds, visit the IRS.

 

Other Types of Fraud

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Charity Fraud

Everyone receives requests for donations in one form or another. Many legitimate charities use telemarketing, direct mail, email, and online ads to ask for contributions. Unfortunately, scam artists also use these techniques to pocket your money. If someone asks for a donation, take the time to familiarize yourself with the charity. Ask for the charity’s name, address, and phone number, and written information about its programs.  A common trick is to use a name that is similar to a legitimate charity.  Check out any charity you are not familiar with at the office that regulates charities in your state. For a list of state offices, visit the National Association of State Charity Officials. Additional information can also be found in the Charity Fraud section of the  FTC website.

 

Job Scams

Many people looking for work have been ripped off by scam artists who promise a job, access to special job listings, interviews, or a way to make a big income working from home – that is, if they just pay a fee or turn over their credit or debit card information. Don’t pay for the promise of a job.

Read more here.

 

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