Common Consumer Fraud Tricks (and how to avoid them)

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consumer fraud

consumer fraudHave you gotten an offer in the mail or online that seemed too good to be true? Chances are it probably was. Over 25 million Americans were victims of consumer fraud in 2011, and fraudsters and scammers are becoming more and more clever with how they steal your personal information. But you’re not completely helpless against consumer fraud. Here are some common consumer fraud schemes and scams and strategies for how to protect yourself:

Phishing Scams

As ludicrous as it seems, those ridiculous emails from a disposed prince of Nigeria asking for your bank account information is a common way to get consumers to give up their financial information. Phishing happens when someone takes and uses your personal or financial information in a fraudulent way. You’ll usually receive an email or letter that appears to be very legitimate; it could be a note from a financial institution or a well-known organization or person asking you to “verify” or submit confidential information. What can seem like an authentic email from a trusted source (like your bank or a government official) can be a scammer in disguise. So don’t immediately assume an email from a “trusted source” is the real deal, especially if you have to submit confidential information.

Foreclosure and Mortgage Scams

With so many homeowners still recovering from the housing crisis, mortgage scams are becoming more common. Real estate or mortgage professionals (or scammers claiming to be those professionals) will offer consumers foreclosure rescue packages or loan modification schemes that end up costing the consumer tons of money and don’t resolve their housing situation. You can protect yourself from these scams by avoiding any offers that you did not seek out yourself and walking away from a contract if it seems too good to be true.

Lottery Scams

These scams are the most tempting to believe. Lottery scammers contact consumers to let them know that they have won a large prize. In order to claim that prize, consumers need to send money to cover the lottery taxes. Not only is this sent (and then stolen) money usually never recovered, but the scammers will often recycle those consumers’ names and contact information for future frauds and scams. If you don’t remember entering a lottery that you’re later informed that you won or you’re asked to pay a certain amount before you receive your prize, it’s likely a scam.

Don’t Become a Victim – How to Avoid Consumer Fraud Tricks

  • Remember that personal information, especially your social security number, is very sensitive and should never be given to an unknown party.
  • Always initiate contact with a financial institution or other organization before giving them your personal information. If someone is calling you and claiming they need your social security number in order to process something, do not immediately assume they are who they claim to be. Call a verified customer service line before giving out personal information on the phone.
  • If it’s too good to be true, it probably is. Use your instincts and be smart about who and what you believe when it comes to your money.

For more information about common consumer fraud scams or reporting consumer fraud to the authorities, visit the Federal Trade Commission (FTC), the government agency in charge of protecting consumers against false advertising and unfair business practices. You can also get more information about consumer protection from the Consumer Financial Protection Bureau (CFPB).