Fraud can come in many different forms, and fraudsters are always changing their tactics. Remember to always ask yourself – is this too good to be true?
Using resources from the National Consumers League and the Federal Trade Commission, we've compiled a list of the most commonly reported types of fraud so you can keep yourself and your loved ones protected.
Credit, Debt, and Loans
Whether you’re in a pinch or are preparing for a big life event that will require a large amount of money—many people rely on credit, debt, and loans every single day. But don’t just take any opportunity for credit, a loan, or for paying off your debt.
Fake Scholarships & Grants
Prospective college students often look to scholarships to lessen the financial burden on parents and to avoid taking out student loans. Unfortunately, scam artists know how stressful paying for college can be and they’ve tailored scholarship scams to separate eager students and their families from their money. Beware of search services that guarantee you’ll receive scholarship money - no search service can control the decisions of scholarship sponsors.
For more information about scholarship scams and other resources you can use, visit StudentAid.gov, the U.S. Department of Education’s site for free information on preparing for and funding education beyond high school. You can complete the FAFSA here, and learn about other options here.
Advance Fee Loans & Credit Arrangers
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. When you need money, a promise to give you a loan or help you get one (even if you have a bad credit record) may seem like the answer to your prayers. But beware—it could be a crook trying to steal your money, not lend you money.
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. When you need money, a promise to give you a loan or help you get one (even if you have a bad credit record) may seem like the answer to your prayers. But beware—it could be a crook trying to steal your money, not lend you money.
If you have credit problems, we strongly encourage you to meet with a professional financial counselor who works at a nonprofit organization. Luckily for our members, we have some great options for you to choose from:
- The Roanoke Financial Empowerment Center: The Roanoke FEC offers professional, one-on-one financial counseling at no-cost to Roanoke area residents through a partnership between Freedom First Enterprises, the City of Roanoke, and the Cities for Financial Empowerment Fund.
- GreenPath Financial Wellness: GreenPath is a trusted national nonprofit in operation since 1961. Through their partnership with Freedom First, every member who contacts GreenPath receives a free financial counseling session.
- National Foundation for Credit Counseling: Founded in 1951, the National Foundation for Credit Counseling is the oldest nonprofit financial counseling organization with a mission to help all Americans gain control over their finances. They support a network of committed member agencies to deliver high quality, practical financial education and counseling services.
Phantom Debt Collection Scams
The phantom debt collection scam comes in a number of variations, but the common element in almost all of them is a claim that a consumer owes money on a debt and needs to pay or else face serious consequences. Regardless of whether the consumer actually takes out a loan, they may receive a call later demanding money be paid.
Consumers who receive calls from phantom debt collection scammers may have had their personal information exposed, raising the risk of identity theft. The Federal Trade Commission offers a step-by-step process for recovering from identity theft here.
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.
The best thing to do if you’re having trouble making your mortgage payments is to contact your servicer or lender immediately. Explain your situation and see if there’s a way for you to catch up on payments or modify your mortgage. You might also find free help and advice from a certified housing counselor who can evaluate your situation and explain your options.
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
Scammers pressure you to wire money to them because it’s easy to take your money and disappear. Wiring money with services like MoneyGram, Ria, and Western Union is like sending cash — once you send it, you usually can’t get it back. Never wire money to anyone you haven’t met in person — no matter the reason they give.
Be especially careful when dealing with large financial transactions, such as buying a home. Once hackers gain access to an email account, they will monitor messages to find someone in the process of buying a home. 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.
If you sent money using a wire transfer company like MoneyGram, Ria, or Western Union, contact that company right away. Tell them it was a fraudulent transfer. Ask them to reverse the wire transfer and give you your money back. If you sent the money through Freedom First, contact us right away so we can open an investigation and work to reverse the transaction.
Taxes & Social Security
Tax Fraud
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.
Social Security Administration Scam
The Social Security Administration (SSA) scam is the number one scam reported to the FTC. As soon as a caller threatens you, or demands you pay them with a gift card or by wiring money, it’s a scam. Even if the caller ID tells you otherwise. Scam calls may show up on caller ID as the Social Security Administration and look like the agency’s real number, but it’s not the SSA calling.
If you get a call from someone claiming to be from the Social Security Administration, hang up the phone and remember:
- Your Social Security number is not about to be suspended.
- The real Social Security Administration will never call to threaten your benefits.
- The real SSA will never tell you to wire money, send cash, or put money on a gift card.
If you’ve received a call like this, tell your friends, family and neighbors about it. Tell them to hang up the phone and to report it to the Federal Trade Commission.
Phony Prizes & Sales
You may think it’s your lucky day when you’re notified that you are the winner of a big cash payout or expensive prize. But many types of these scams exist that trick you into claiming your faulty prize, just to take your money.
Prizes, Sweepstakes, and Free Gifts
Congratulations! You’ve won a car, valuable jewelry, cash, or some other fabulous prize! Is this really your lucky day, or is your luck about to take a turn for the worse? Be cautious before you claim your big prize or sweepstakes win. These scams include fake lottery winnings and fake social media contests.
Congratulations! You’ve won a car, valuable jewelry, cash, or some other fabulous prize! Is this really your lucky day, or is your luck about to take a turn for the worse? Be cautious before you claim your big prize or sweepstakes win. These scams include fake lottery winnings and fake social media contests.
Before you respond, pause. Don’t click on any links since they might contain malware. Ask yourself: Does this business need information like my credit card number to get this free prize? If it’s legit, probably not! Contact the business using a phone number, email, or website that you know is real. Ask if they really sent the message. If they didn’t, report the post and let them know that their account may have been hacked.
Online Merchandise Sales
The fake merchandise scam category covers a wide variety of fraud. Most of them include a seller posting an item online (typically high-dollar clothing, shoes, or electronics) at Craigslist or an auction site such as eBay. These regularly pricey items are being listed for a fraction of the typical price and seem like an attractive deal, but actually turn out to be scams.
The fake merchandise scam category covers a wide variety of fraud. Most of them include a seller posting an item online (typically high-dollar clothing, shoes, or electronics) at Craigslist or an auction site such as eBay. These regularly pricey items are being listed for a fraction of the typical price and seem like an attractive deal, but actually turn out to be scams.
Some ways to protect yourself from these types of scams involve becoming a savvy online shopper. Look for information about how complaints are handled. If there's no clear return policy or feedback channel, then beware. Be skeptical about incredibly low prices or rebates that promise to cover the entire cost of the product. The goods may not exist at all, or the seller may be on the verge of going out of business and never deliver the promised merchandise or rebate. You can also take a look at the “contact us” page. If there’s no telephone number to call, or if the number doesn’t work when you call, it could be a scam.
Money-Making Scams
Many people jump at the opportunity to make money quickly when it presents itself. But be cautioned that these opportunities may actually turn out to be scams that take your money, rather than help you make it.
Fake Check Scams
There are many variations of the fake check scam. In a fake check scam, a person you don’t know asks you to deposit a check. It’s usually for more than they owe you, and it’s sometimes for several thousand dollars. They tell you to send some of the money back to them or to another person, and they always have a good story to explain why you can’t keep all the money. They might say they need you to cover taxes or fees for a prize, to buy supplies for a job, to send back money they overpaid, or something else. But this is a scam.
There are many variations of the fake check scam. In a fake check scam, a person you don’t know asks you to deposit a check. It’s usually for more than they owe you, and it’s sometimes for several thousand dollars. They tell you to send some of the money back to them or to another person, and they always have a good story to explain why you can’t keep all the money. They might say they need you to cover taxes or fees for a prize, to buy supplies for a job, to send back money they overpaid, or something else. But this is a scam.
Never use money from a check to send gift cards, money orders, cryptocurrency, or to wire money to anyone who asks you to. Many scammers demand that you buy gift cards and send them the PIN numbers, buy cryptocurrency and transfer it to them, or send money through wire transfer services like Western Union or MoneyGram. Once you do, it’s like you’ve given them cash. It’s almost impossible to get it back. For more information on how to recover funds from a fake check scam, visit the FTC.
Investment & Cryptocurrency Scams
These scams cover investment opportunities in day trading, gold and gems, cryptocurrency, art, rare coins, and more - as well as companies that offer advice or seminars on investments and the like. Beware of promises that you’ll make big profits fast. No one can accurately predict how an investment will do. Often the investments that promise the most pay-off are also the riskiest.
These scams cover investment opportunities in day trading, gold and gems, cryptocurrency, art, rare coins, and more - as well as companies that offer advice or seminars on investments and the like. Beware of promises that you’ll make big profits fast. No one can accurately predict how an investment will do. Often the investments that promise the most pay-off are also the riskiest.
Never move or transfer your money to “protect it.” Your money is fine where it is, no matter what they say or how urgently they say it. Worried? Call your real bank/credit union, broker, or investment advisor. Use the number you find on your account statements. Don’t use the number the caller gives you. That’ll take you to the scammer. No matter what the caller says, there’s no such thing as a government Bitcoin account or digital wallet. There are no Bitcoin federal safety lockers. And only a scammer will give you a QR code to “help” you deposit your life savings in a Bitcoin ATM.
House-Selling Scams
Predatory businesses offering "cash for ugly houses" look to target individuals in difficult situations. These may be people who need cash quickly, who may be dealing with a death of a loved one, or who are experiencing cognitive issues. While buyers typically offer money up front, sometimes thousands of dollars, it comes with a catch. They may significantly undervalue the home, tack on junk fees, or trap the consumer in complicated contracts that make it difficult for the homeowner to back out.
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. Your boss should be paying you, not the other way around. If they tell you to deposit a check and use some of the money for any reason, that’s a scam.
Look up the name of the company or the person who’s hiring you, plus the words “scam,” “review,” or “complaint.” See what others are saying about them. You should also get everything in writing. Ask the employer to send you details of the job duties, the pay, and the hours. If they refuse, that could be a sign of a problem.
Tech-Related Scams
Scammers are evolving along with technology at an alarming rate. Breaching your personal information through your computer or other software can be one of the costliest scams and may be more than just financially devastating.
Phishing & Spoofing
In a scheme called “phishing,” ID thieves trick people into providing their Social Security numbers, financial account numbers, PIN numbers, mothers’ maiden names, and other personal information by pretending to be someone they’re not. This is often accomplished by fraudulent links in emails or text messages where you are prompted to enter sensitive information on a spoofed website or by replying directly to the scammer.
In a scheme called “phishing,” ID thieves trick people into providing their Social Security numbers, financial account numbers, PIN numbers, mothers’ maiden names, and other personal information by pretending to be someone they’re not. This is often accomplished by fraudulent links in emails or text messages where you are prompted to enter sensitive information on a spoofed website or by replying directly to the scammer.
Don’t give your info to anyone who contacts you out of the blue. Honest organizations won’t call, email, or text to ask for information like your Social Security, bank account, or credit card numbers. Also, don’t click on any links. If you get an email or text from a company you know and do business with, contact them using a website you know is real. Or look up their phone number — but don’t call a number they gave you or the number from your caller ID.
Tech Support Scams
A fraudster, claiming to work for a well-known technology company like Microsoft or Norton, contacts you claiming that viruses have been detected on your computer. The fake tech representative alleges they can remotely remove the virus for a fee (typically between $100-400). Think twice before paying up or allowing them access to your computer.
A fraudster, claiming to work for a well-known technology company like Microsoft or Norton, contacts you claiming that viruses have been detected on your computer. The fake tech representative alleges they can remotely remove the virus for a fee (typically between $100-400). Think twice before paying up or allowing them access to your computer.
Never call a number on a security pop-up warning. Pop-ups that tell you to call tech support are always scams. Also, never give someone a verification code to log in to your account. Scammers want it to get into your account. When in doubt, hang up and contact the company using information from their official website or product brochures - not through a link that was sent to you.
Scams Using Emotional Manipulation
These types of scams tug at your heart strings and scammers manipulate your emotions in order to wring money out of you. The elderly are particularly common targets for this type of scam.
Friendship & Romance Scams
Romance scammers create fake profiles on dating sites and apps or contact you through popular social media sites like Instagram or Facebook. The scammers strike up a relationship with you to build up trust, sometimes talking or chatting several times a day. Then, they make up a story and ask for money. Scammers will tell you they can't meet in person, will ask for financial help paying bills or getting out of a bind, and they will tell you how to pay - usually by wire transfer, gift cards, money transfer apps, or cryptocurrency.
Romance scammers create fake profiles on dating sites and apps or contact you through popular social media sites like Instagram or Facebook. The scammers strike up a relationship with you to build up trust, sometimes talking or chatting several times a day. Then, they make up a story and ask for money. Scammers will tell you they can't meet in person, will ask for financial help paying bills or getting out of a bind, and they will tell you how to pay - usually by wire transfer, gift cards, money transfer apps, or cryptocurrency.
Here’s the bottom line: Never send money or gifts to a sweetheart you haven’t met in person. If you suspect a romance scam, do a reverse image search of the person’s profile picture. Is it associated with another name or with details that don’t match up? Those are signs of a scam. You can also search online for the type of job the person has plus the word “scammer.” Have other people posted similar stories? For example, search for “oil rig scammer” or “US Army scammer.” Either way, you should stop communicating with the person and report them on each communication platform they're using.
Family Emergency Scams
A con artist calls or emails the victim posing as a relative in distress or someone claiming to represent the relative (such as a lawyer or law enforcement agent). The “relative” of the victim explains they are in trouble and needs you to wire them funds that will be used for bail money, lawyer’s fees, hospital bills, or another fictitious expense.
A con artist calls or emails the victim posing as a relative in distress or someone claiming to represent the relative (such as a lawyer or law enforcement agent). The “relative” of the victim explains they are in trouble and needs you to wire them funds that will be used for bail money, lawyer’s fees, hospital bills, or another fictitious expense.
The scammer may already know a lot about you or the person they’re pretending to be. They may know your name, where you live, and other information they could have found on social media sites or by hacking a family member’s email. And sometimes they simply guess. Learn more about this type of scam and what you can do about it through the FTC.
Pet Adoption Scams
First, a consumer searching for a pet sees a desirable animal listed for sale online, often on a classifieds website like Craigslist.org or Oodle.com. Next, the consumer reaches out to the prospective seller and expresses interest in acquiring the animal. After a consumer sends money to the alleged owner to pay for the pet, she is told that additional funds are needed to cover the cost of things like “a ventilated shipping crate,” “insurance,” or other reasons. Regardless of how much money is sent, the alleged seller will find new reasons to ask for additional payment. This continues until the victim, now often out hundreds or thousands of dollars catches on and stops sending money.
Charity Scams
If you’re approached by an unfamiliar charity, check it out. Most states require charities to register with them and file annual reports showing how they use donations. Ask your state or local consumer protection agency how to get this information. The Better Business Bureau (BBB) Wise Giving Alliance also offers information about national charities. The FTC also has compiled useful information about how to donate safely here.