Common Types And Signs Of Consumer Fraud And How To Protect Yourself From Them

Fraud has long been a problem for authorities and the public anywhere in the world. It’s a common crime that involves deceiving people and stealing their money. Most of the time, it’s done in the guise of business practices and transactions that are tailored to attract consumers’ attention.

It seems like as the times change, criminals are finding more ways to commit fraudulent acts to steal. They’ve become more crafty than ever before, which is why authorities and financial institutions are encouraging everyone to be vigilant. It’s because fraud is usually discovered or caught when it’s already occurred and not beforehand.

If deceptive practices against consumers haven’t victimized you, then it’s your responsibility to make it stay that way. To do that, you have to arm yourself with information. So here are the common types and signs of consumer fraud and how you can protect yourself from each of them.

Phishing

The foundation of all scams and fraudulent activities nowadays is phishing. That’s where it usually starts, especially in an online setting. Phishing is pronounced like the word “fishing” because this criminal act is designed to bait you in so others can steal your information.

Phishing scams are typically conducted through email and the phone. You may receive an email from a bank or a company that you recognize saying that there’s a situation that needs your immediate attention. The email will direct you to click a phony website that looks like a legit one, and there, they’ll ask you to provide personal information such as your social security number for an “update” of their records.

Here’s how you can protect yourself from a phishing attack:

  • Don’t ever give your personal information to respond to an unsolicited request via email or phone.
  • Contact the financial institution or company yourself if you believe that the request was legitimate or to report consumer fraud if you suspect it is an attempt of committing it.

Identity theft

Identity theft happens when someone steals your information to commit fraud or other crimes. It’s a serious offense that’s met with severe punishment everywhere. Criminals usually steal an unsuspecting individual’s identity to assume it and drain them of their funds.

Financial institutions are very particular about identity theft because most victims end up with substantial financial losses on their bank accounts. Common signs of stolen identities include not receiving your bills and other financial statements and unexpected withdrawals from bank accounts.

Here’s how you can protect yourself from identity theft:

  • Place a fraud alert and obtain free credit reports. You can get your credit or any information regarding your banking transactions because it’s mandated by law that banks should be transparent regarding this matter.
  • Close or freeze your accounts if necessary.

Debit and credit card fraud

Fraudulent activities occurring because of stolen debit or credit card details are also rampant. Many are still falling victim to this, even more so nowadays due to the rise of online shopping and subscriptions. Aside from stealing your cards physically, criminals also find ways to steal their details virtually from your online transactions.

Red flags of debit and credit card fraud include charges or purchases that you don’t recognize, charges from unfamiliar places, and receiving unsolicited requests for your card information via phone calls.

Here’s how you can protect yourself from debit and credit card fraud:

  • Never respond to calls with information that the caller should already have.
  • Complain or report immediately once you see any suspicious activity involving your accounts.

Mortgage fraud

Authorities deal with many cases of mortgage fraud each year. It’s a challenging scheme to figure out because the people who do it are the same ones you approach for a mortgage. There are two common objectives for deceiving people on their mortgage: for profit or housing.

Mortgage fraud for profit aims to manipulate the lending process to steal money and equity from lenders and homeowners. On the other hand, mortgage fraud for housing represents illegal actions that a borrower commits to maintain ownership or acquire a house.

Here’s how you can protect yourself from mortgage fraud:

  • Ask for and verify the licenses of every broker, appraiser, lender, or lawyer that you transact business with.
  • Don’t pay anything in advance for their services.
  • Look for referrals and avoid any unsolicited contact regarding your mortgage dealings.

Wrapping up

Keeping yourself informed is the best way to protect yourself from fraud. Beware of any suspicious messages or conversations from anyone. Stay in the know to have a stress-free consumer life.

Author’s Bio:

Deinah Storm used to work in the corporate world as a marketing affiliate. She quit her job to pursue her passion for writing, but to this day, Deinah is committed to educating consumers about the different marketing scams and how to avoid them.

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