10 Common Types of Fraud – And How to Avoid Them
Posted Monday, Oct 15, 2012 by
We usually enjoy being fooled. We pay magicians to delight us with startling illusions. We demand filmmakers impress us with increasingly realistic special effects. We’re delighted when someone throws us a surprise birthday party.
But when we’re fooled into buying a product that’s never delivered, invest in a company that doesn’t exist or enter our credit card information on a phony website, that’s not fun at all. In fact, that’s fraud. It’s a crime. And, together, it costs us billions of dollars every year.
Here are 10 common types of fraud you’re apt to encounter on any given day and ways to avoid them.
1. Phony Checks. This is a simple and easy fraud. Someone pays you with a check when there’s actually little or no money in the account. To protect yourself, never take a check that doesn’t include an address and confirm both the name and address against the buyer’s driver’s license. That way, if the check does bounce, you know who to pursue.
2. Phony Internet Sellers. While surfing the Net, you’re liable to run across items (often name brand watches, jewelry or electronics) being offered at ridiculously low prices. Many of these sellers are phony; they’ll take your money, but never deliver the item. Always check user reviews and ratings before buying online.
3. Online Misrepresentation. This is a subtler form of fraud in which the seller offers a so-called high-value item at a steep discount price. Often, such items aren’t worth nearly what the seller says they are. Before buying, do an apples-to-apples comparison by checking what other sellers are listing the same item for on the Internet. If you can’t find the item anywhere else, chances are it’s a scam.
4. Website Misdirection. Even buying from a top retailer like Amazon.com or Overstock.com can be dangerous. No, those companies aren’t crooked, but sophisticated hackers have found ways to mimic these companies’ checkout pages so when you go to pay for your purchase, you’re actually giving your credit card information to someone else. Whenever you reach a checkout page, check the website address at the top of your web browser. Make sure it matches that of the original site and doesn’t contain an odd country extension like “.ru,” which means “Russia.”
5. Charities Fraud. Americans enjoy giving to worthy causes, which is something con artists are eager to take advantage of. Especially around the holidays, you’re apt to get emails or phone solicitations asking you to donate to any number of charities. Some may be legitimate. Many others are not. If you want to give to a charity, never respond to a solicitation. Choose the charity for yourself and donate directly.
6. Debt Elimination. Many Americans are in debt. Some seriously so. If you’re in such a situation, you may be tempted by ads by companies that promise to negotiate with banks and credit card companies on your behalf so you can zero your debt for just pennies on the dollar. Many of these scams ask for partial payment up front – often $1,500 to $2,000 – as well as all your credit card information. They’re bogus. And, in the end, you’re not only out $1,500 to $2,000, but you’ve also given away all your credit card information, which the scammers are now free to use.
7. Work-at-Home Scams. Millions of Americans now telecommute, so the idea of working from home sounds viable. But most of the ads that say you can “Make $25 to $200 working at home!” are frauds, especially if the company behind them asks you to pay to join their program. At best, you’ll be hired to get other people involved in the scam.
8. Pyramid Schemes. Frequently disguised as “multilevel marketing programs,” these schemes promise you high returns on your investment if you can recruit other people to work as your marketing network. Of course, they only way they can make money is if they recruit other people to become part of their marketing networks, etc. The way such programs evade the law is by making it possible to make money by selling actual products or services, but their real focus is the financial pyramid, which only serves the people at the very top. The best and only way to protect yourself is just to avoid them.
9. Online Pharmacy Frauds. On any given day, you will likely receive numerous spam emails advertising any number of prescription drugs at low prices through online pharmacies. Many of these pharmacies are scams that sell counterfeit or expired drugs that have been relabeled to look legitimate. At best, you’re just buying harmless sugar pills. At worst, the drugs could cause real harm. There are legitimate online pharmacies on the Internet, but again, investigate them thoroughly before sending them your money.
10. Identity Theft. The fastest-growing type of fraud in the world is identity theft. It occurs when the fraudster uses your credit card or bank account information to buy items and then charge them to you. The simplest way to protect yourself is to destroy receipts, bank card statements, credit card bills, etc., before throwing them in the trash.
Consider a Criminal Justice Degree from Everest University Online
Want to fight fraud? You can lay the foundation for a career in fraud investigation with a bachelor’s degree in Criminal Justice from Everest University Online, a division of Everest University.
Everest University Online’s Criminal Justice bachelor’s degree program is designed for students and working adults who prefer the convenience of taking classes from home during the evening, on weekends, etc. The curriculum covers a wide range of related topics, including:
- Criminal evidence
- Criminal procedure
- Introduction to corrections
- Computer crime
- Introduction to interviews and interrogation
- Concepts of criminal law
- Methodology of economic crimes
Financial aid is available for those who qualify.