Scams and fraud can happen to anyone at any time. It’s important to be aware of the most common scams and frauds to protect yourself from being a victim. This blog post will discuss some of the most common scams and frauds and provide information on how you can avoid them. So please keep reading!

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Adoption Fraud

Unethical adoption service providers might use the emotionally charged nature of the adoption process to mislead and scam prospective adoptive parents and birth parents contemplating adoption. Learn what to watch for, how to protect yourself and your loved ones, and what to do if you become a victim.

Common Schemes

Double matching: When a baby from a birth mother is paired with many potential adoptive parents.

Fabricated matching occurs when potential adoptive parents are connected with a fictional birth mother, a birth mother who is not pregnant, or a mother who is not interested in giving her child for adoption.

Fee-related adoption schemes: arise when adoption service companies charge prospective adoptive parents expensive up-front or recurring costs but fail to fulfill the promised services.

How to Protect Yourself

When choosing an adoption service provider, do your research. Be aware of what fraudulent providers may do or ask you to do.

Misrepresent professional licenses or education
Make unsolicited contact to signing up birth mothers or prospective adoptive parents
Be challenging to reach via phone or email, despite multiple attempts
Unnecessarily control communications between adoption participants
Quote highly negotiable and inconsistent fees
Encourage prospective adoptive parents to pay expenses immediately to avoid losing out on the opportunity to adopt
Demonstrate a pattern of requesting additional unexpected fees throughout the process
Make guarantees about the adoption process, such as:
Matching within a specified time-frame
Birth parents’ willingness to adopt
How quickly and efficiently will the adoption be legally finalized

Report Adoption Fraud

Contact the FBI online at tips.fbi.gov.
Reach out to your local FBI field office.
Report internet-enabled adoption fraud schemes to ic3.gov.

Know other red flags to look out for during the adoption process.

Lack of proof of pregnancy or proof with inadequate details, like missing dates
History of failed adoptions due to unusual circumstances
Adoption participants are pressured to sign documents they don’t fully understand
Adoption participants are encouraged to falsify statements and documents to finalize the adoption

Additionally, birth parents should recognize signs of an exploitative situation, which may include:

Being coerced or manipulated into placing a child for adoption
Getting assigned prospective adoptive parents without being involved in the choice
Being pressured to follow through with adoption or being told you will have to repay covered expenses if you change your mind

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Business and Investment Fraud

Business and investment fraud schemes can take many different forms, but they all have one goal: to separate you from your money.

Ponzi Schemes

A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors rather than from profit earned through legitimate sources.

How to Protect Yourself

There are several things you can do to protect yourself from becoming a victim of a Ponzi scheme:

Check out the backgrounds of anyone offering investments. You can do this by asking for their brochure and Form ADV Part 2A & 2B, which they should be happy to provide if they are legitimate. You can also check the SEC’s Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov) and your state securities regulator’s website.
Beware of unsolicited offers, especially if they promise high returns with little or no risk.
Be wary of investments that are not registered with the SEC. Most assets sold to the public must be recorded, but some exceptions exist, such as U.S. Treasury bonds and mutual funds. Always ask your financial professional if the investment is registered with the SEC before investing.
Do not invest in anything you do not understand. Get all promises in writing and read them carefully before investing. If you have questions, get answers in writing before investing.

Pyramid Schemes

Pyramid schemes are illegal scams where new investors are recruited to make payments to earlier investors. Like Ponzi schemes, there is no legitimate underlying investment activity, so eventually, the scheme will collapse when there are not enough new investors to keep making payments.

How to Protect Yourself

To protect yourself from becoming a victim of a pyramid scheme:

Be wary of unsolicited offers, especially if they promise high returns with little or no risk.
Beware of investments that require you to recruit other people to make money.
Do not invest in anything you do not understand. Get all promises in writing and read them
carefully before investing. If you have questions, get answers in writing before investing.

Telemarketing Fraud Schemes

Telemarketing fraud schemes are typically perpetrated over the phone by someone who contacts you out of the blue, often claiming to be from a legitimate company or organization. They may try to sell you something or get you to sign up for a service, often using high-pressure sales tactics. But in reality, they are just trying to steal your money.

How to Protect Yourself

There are several things you can do to protect yourself from becoming a victim of telemarketing fraud:

Never give out your personal information, such as your Social Security number, credit card number, or bank account information, to someone you don’t know.

Be wary of unsolicited phone calls, especially if they are trying to sell you something or get you to sign up for a service. If you’re not interested, just say “no” and hang up.

Never wire money or send gift cards to someone you don’t know.

Advance Fee Schemes

Advance fee schemes are scams where you are asked to pay upfront to receive a promised service. The scammer will often claim they need the money to cover taxes, fees, or other charges to release the funds or provide the promised service. But in reality, there is no service, and you will never see your money again.

How to Protect Yourself

To protect yourself from becoming a victim of an advance fee scheme:

Be wary of unsolicited offers, especially if they require you to pay for a promised service upfront.
Never wire money or send gift cards to someone you don’t know.
Get all promises in writing and read them carefully before paying any money.
If you have questions, get answers in writing before paying any money.

Nigerian Letter or 419 Schemes

Nigerian letter or 419 schemes are scams where someone contacts you, often by email, claiming to be from Nigeria or another country. They may say they need your help to transfer money out of their country and offer to give you a share of the money if you help them. But in reality, there is no money, and you will never see your own money again if you send it to them.

How to Protect Yourself

To protect yourself from becoming a victim of a Nigerian letter or 419 scheme:

Do not respond to unsolicited emails, especially from someone claiming to be from Nigeria or another country.
Never wire money or send gift cards to someone you don’t know.
Get all promises in writing and read them carefully before paying any money.
If you have questions, get answers in writing before paying any money.

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Business Email Compromise

One of the most financially destructive cyber crimes is business email compromise (BEC), also known as email account compromise (EAC). It takes advantage of the fact that many depend on email to conduct personal and professional affairs.

In a BEC scam, thieves send an email that looks to originate from a reputable source and make a genuine request, like in the following examples:

Asking you to wire money to a new account for an upcoming project
Requesting your help to transfer funds out of their country
Asking you to purchase gift cards or send them directly to the scammer
The email may look like it’s from a legitimate source, but it’s actually from a scammer who has hacked into the email account or spoofed the email address to look like a legitimate sender. Once you respond to the email and fulfill the request, the money is gone, and there’s no way to get it back.
Send spearphishing emails to high-level executives and request large sums of money transfers.
Use malware to infect computers and gain access to email accounts.

How to Protect Yourself

There are several things you can do to protect yourself from becoming a victim of business email compromise:

Never wire money or send gift cards to someone you don’t know.
Verify requests for money transfers or changes in vendor payment location by calling the company directly using a phone number you know to be legitimate, not the contact information provided in the email.
Do not use the contact information provided in the email.
Do not open attachments or click on links in emails from people you don’t know.
Be suspicious of any email with a sense of urgency, especially if it’s from someone you don’t know.
Beware of spelling and grammar mistakes in emails. Many scammers are not native English speakers.
If you have questions, get answers in writing before paying any money.
Take your time when making decisions, and never feel pressured to act quickly.
Be mindful of the information you disclose online and on social media platforms. By publicly disclosing details such as your pet’s name, schools you attended, family ties, and birthdate, you might provide a fraudster with all the information necessary to guess your password or response.
Examine the email address, URL, and spelling of any communication with care. Swindlers exploit subtle discrepancies to deceive the eye and earn the victim’s confidence.
Never deactivate two-factor (or multi-factor) authentication for any account that supports it.
If feasible, verify payment and purchase requests in person or by phone to ensure their legitimacy. In addition, you must confirm any changes to the account number or payment processes with the requesting party.

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Charity and Disaster Fraud

In the wake of major disasters, scammers are not uncommon to contact individuals and businesses to take advantage of their generosity. They may do this by setting up fake charities or websites and asking for donations. They may also send emails or texts claiming to be from a legitimate charity and asking you to click on a link to donate. Unfortunately, once you click on the link, you may be taken to a website that looks legitimate but is a scam.

Scammers may also pose as disaster victims, looking for money to help them get back on their feet. These scammers often have heartbreaking stories that tug at your heartstrings and make you want to help. But before you donate, ensure that the charity or individual is legitimate.

How to Protect Yourself

There are several things you can do to protect yourself from becoming a victim of charity or disaster fraud:

Donate to charities that you know and trust and have a track record of helping people in need.
Do not click on links or open attachments in emails or texts from charities or individuals you don’t know. These may contain malware that can infect your computer or device.
If you’re contacted by someone claiming to be a disaster victim, ask how you can help them directly rather than clicking on any links or giving them money.
Research the charity before you donate, using resources like the Better Business Bureau’s Give.org or Charity Navigator.
Be wary of charities that use similar-sounding names to legitimate organizations.
Never give out personal or financial information to someone you don’t know.
Don’t hesitate to ask questions if you’re unsure about the legitimacy of a charity or individual. A legitimate organization will be happy to answer your questions.
Donate by cheque or credit card. If a charity or group requests cash, gift card, virtual currency, or wire transfer donation, it is likely a hoax. Find out more about this scam from the FTC.

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Consumer Fraud Scames

There are many different types of consumer fraud, but they all have one thing in common: someone is trying to take your money.

Some common consumer frauds include:

Identity theft:

This is when someone uses your personal information, like your name, Social Security number, or credit card number, without your permission to commit fraud.

Phishing:

This is when someone tries to get you to share personal or financial information by pretending to be a legitimate company or organization. They may do this by email, text message, or phone call. Example: Nextflix account needing payment, payment on a parcel you have coming, the government tax refund, etc.

Imposter scams:

This is when someone pretends to be someone else to get you to send them money or give them personal information. For example, they may pose as a government official, a needy family member, or a charity representative.

Prize scams:

This is when someone tells you that you’ve won a contest or a prize, but to collect it, you have to pay a fee.

Sweepstakes scams:

This is when someone tells you that you’ve won a contest or prize, but you must pay taxes or shipping fees to collect it.

Telemarketing fraud:

This is when someone uses the phone to try to sell you something or get you to donate to a fake charity. They may also try to get your personal information, like your credit card number.

Cryptocurrency scams:

This is when someone tries to get you to invest in a fake cryptocurrency or buy into a bogus initial coin offering.

How to Protect Yourself

There are several things you can do to protect yourself from becoming a victim of consumer fraud:

Never give out personal or financial information to someone you don’t know.
If you’re contacted by someone claiming to be from a company or organization, do not reply with any personal information. Instead, find the company’s contact information and call them directly to verify that the request is legitimate.
Be suspicious of unsolicited phone calls, emails, or text messages. Even if the sender seems to know your name or other personal information, this doesn’t mean they are legitimate.
Never click on links or open attachments in emails or texts from someone you don’t know. These could contain malware that infects your computer or device.
If you’re asked to pay for something upfront before you can collect a prize, it’s probably a scam. Legitimate companies and organizations will not ask you to pay anything to collect a prize.
Do your research before donating to a charity. Ensure the organization is legitimate by checking out resources like the Better Business Bureau’s Give.org or Charity Navigator.
Never give out your credit card number, bank account information, or social security number unless you are the one initiating the transaction and you know with whom you are dealing.
Beware of offers that are too good to be true. If something sounds too good to be true, it probably is.
Use caution when buying things online. Ensure the website is secure and you use a fraud-protected credit card.

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Elder Fraud

Fraud targeting seniors is a serious problem that can rob them of their life savings, dignity, and independence. According to the FTC, people 60 and older reported losing nearly $3 billion to fraud in 2019.

There are many different types of elder fraud, but some common ones include:

Investment scams:

This is when someone convinces a senior to invest their money in a fake business or venture. The scammer may promise high returns with little or no risk.

Other financial scams:

These include credit cards, mortgages, loans, and debt relief scams. For example, a scammer may offer to consolidate a senior’s debt for a fee but then do nothing and leave the person with even more debt.

Health care scams:

This is when someone tries to sell seniors bogus health products or services or convinces them to sign up for a fake insurance plan. The scammer may also pretend to be from Medicare or Medicaid and try to get seniors to give them their personal information.

Telemarketing fraud:

This is when someone uses the phone to try to sell seniors something or get them to donate to a fake charity. They may also try to get the person’s credit card number or other personal information.

Sweepstakes and lottery scams:

This is when someone tells a senior they’ve won a contest or prize, but to collect it, they must pay taxes or fees. The scammer may also ask the person to give them their bank account information so they can deposit the winnings.

Home repair scam

This is when someone convinces a senior that their home needs repairs and overcharges them for shoddy work. The scammer may also try to get the person to take out a reverse mortgage or sign over the deed to their home.

TV/radio scam

Someone calls seniors and tells them they’ve won a free TV or radio, but they have to pay for shipping and handling. The scammer may also try to get the person’s credit card number or other personal information.

Family/caregiver scam

This is when someone takes advantage of a senior’s relationship with their family or caregiver. For example, the scammer may convince the person to give them money or property, or they may try to get a power of attorney to make financial decisions on the senior’s behalf.

How to Protect Yourself

There are several things seniors can do to protect themselves from elder fraud, including:

Never give out personal or financial information to someone you don’t know.
If you’re contacted by someone claiming to be from a company or organization, do not reply with any personal information. Instead, find the company’s contact information and call them directly to verify that the request is legitimate.
Be suspicious of unsolicited phone calls, emails, or text messages. Even if the sender seems to know your name or other personal information, this doesn’t mean they are legitimate.
Never click on links or open attachments from someone you don’t know. These could contain malware that can steal your personal information.
Be wary of anyone who asks you to pay for something in advance, especially if they’re asking for money by wire transfer or prepaid debit card.
Never sign anything without reading and understanding it first. Then, if you’re not sure what something means, ask a trusted friend or family member to help you.

If you think you’ve been a victim of elder fraud, report it to the FTC at ftc.gov/complaint. You can also call 1-877-FTC-HELP (1-877-382-4357) if you need help filing a complaint.

When reporting a scam—regardless of dollar amount—include as many of the following details as possible:

Names of the scammer and company
Dates of contact
Methods of communication
Phone numbers, email addresses, mailing addresses, and websites used by the perpetrator
Methods of payment
Where you sent funds, including wire transfers and prepaid cards (provide financial institution names, account names, and account numbers)
Descriptions of your interactions with the scammer and the instructions you were given

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Health Care Fraud

Health care fraud is any deception, misrepresentation, or other illegal conduct used to obtain payment from a health care program. This can include billing for services that weren’t provided, unnecessary services, or using unqualified personnel to provide care.

Health care fraud costs the U.S. billions of dollars annually and drives up the cost of health care for everyone. It also risks patients by diverting scarce resources away from necessary medical care.

There are many different types of health care fraud, but some of the most common include:

Billing for services that weren’t provided
Unbundling (billing for each component of a procedure separately)
Upcoding (billing for a more expensive service than the one that was provided)
Billing for unnecessary services
Using unqualified personnel to provide care
Waiving co-pays or deductibles
Falsifying records

There are a few things patients can do to protect themselves from health care fraud, including:

Asking questions about your care and treatment.
Make sure you understand what services are being billed to your insurance.
Checking to see if your provider is licensed and in good standing with your state’s licensing board.
Reporting any suspicious activity to your state’s attorney general or the National Health Care Anti-Fraud Association.

If you think you’ve been a victim of health care fraud, report it to the Department of Health and Human Services Office of Inspector General at oig.hhs.gov/fraud/report-fraud/. You can also call 1-800-HHS-TIPS (1-800-447-8477) if you need help filing a complaint.

When reporting health care fraud, be sure to include as much of the following information as possible:

The name of the person or company you’re reporting
The date of the incident
A description of the incident
The location of the incident (if applicable)
The names and contact information of any witnesses
Your contact information (so the authorities can follow up with you if necessary)

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Holiday Scams

Tis the season for giving, but it’s also the season for scammers to take advantage of people feeling festive and generous. Holiday scams can come in many forms, from fake charities seeking donations to bogus websites selling counterfeit merchandise.

Here are a few tips to help you avoid holiday scams:

Be wary of unsolicited emails, texts, and social media messages that promote deals or ask for donations.
Don’t click on links or open attachments from unknown senders.
If you’re shopping online, ensure the website is secure (look for https in the URL) and that you trust the seller.
Research charities before donating to make sure they’re legitimate.
Never give out personal or financial information to someone you don’t know.
Be careful how you pay for your online purchases, use a credit card, and watch your statement.
Monitor the shipping process with the tracking number provided and follow the shipping process.
Be suspicious of any credit card transactions if the cardholder’s billing address does not match the shipping address. Before sending any merchandise, always get the cardholder’s authorization.

If you think you’ve been the victim of a holiday scam, contact the Federal Trade Commission at ftc.gov/complaint and file a complaint.

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Money Mules

A money mule helps criminals launder money by transferring illegally obtained funds from one bank account to another. For example, the mule may be asked to open a bank account, receive cash into that account, and then transfer the money to another account (usually overseas) at the request of the criminal. In some cases, the mule may be asked to receive goods purchased with stolen credit cards and then ship them to another location.

Money mules may be recruited through job postings that promise easy money for very little work, often without requiring experience or qualifications. The job postings may be on legitimate job sites or on fake websites set up by criminals. The criminals may also reach out to people through social media or email.

If you’re approached about becoming a money mule, it’s important to remember that laundering money is a federal crime. If you agree to help, you could be charged with money laundering and face up to 20 years in prison.

Here are a few things to keep in mind to avoid becoming a money mule:

Don’t respond to job postings that promise easy money for very little work.
Be wary of anyone who contacts you directly through social media or email about a job opportunity that sounds too good to be true.
Never give your personal or financial information to someone you don’t know.
Never agree to transfer money to someone you don’t know.
If you’re asked to open a bank account to receive money, be aware that the account may be used for illegal activity.

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Ransomware

Ransomware is malware that encrypts files on your computer and demands a ransom to decrypt them. Ransomware can spread through email attachments, infected websites, or malicious ads. Once it’s on your computer, it will scan for common file types (like documents, photos, and videos) and encrypt them. The criminals will then demand a ransom, usually in the form of cryptocurrency like Bitcoin, to decrypt the files.

To protect yourself from ransomware, you must have a backup of your files in case you get infected. You should also install security software on your computer and keep it up-to-date. And be careful about what you download and click on—only download files from trusted sources and be wary of email attachments and ads.

If you do get infected with ransomware, don’t pay the ransom. There’s no guarantee that the criminals will decrypt your files, and even if they do, there’s no guarantee that they won’t just infect your computer again. Instead, you should try to restore your files from a backup. If you don’t have a backup, you can try using file-recovery software to see if you can recover some of your files.

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Sextortion: What kids and caregivers need to know

Sextortion is when someone threatens to share intimate photos or videos unless you do what they say. For example, they might threaten to share the images on social media, with your friends, or with your family. They might also demand money from you. Sextortion can happen to anyone, but it’s widespread among kids and teens.

Sextortion can be very scary and upsetting. But, if you’re being blackmailed, it’s important to remember that you’re not alone and some people can help. You can talk to a trusted adult about what’s going on—they might be able to help you figure out what to do next. You can also contact the National Center for Missing & Exploited Children’s CyberTipline to report what’s happening and get help.

It’s also important to remember that you have a right to privacy, and no one has the right to share intimate photos or videos of you without your consent. Sextortion is a crime, and the people who do it can be prosecuted. If you’re being blackmailed, don’t be afraid to speak up—you have the power to stop them.

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Skimming

Skimming is a type of fraud where criminals attach devices to ATMs, point-of-sale terminals, or gas pumps that can copy your card information. They can then use that information to create a counterfeit card and make unauthorized charges.

To protect yourself from skimming, it’s essential to be aware of the signs that a device has attached to a machine. For example, it could be a skimming device if you see something that looks out of place on an ATM or gas pump or if the keypad feels loose or different. You should also never use your card on a machine that looks like it has been tampered with.

How to Protect Yourself at a gas pump

Choose a petrol pump closer to the store and inside the attendant’s line of sight. These pumps are less likely to be skimming targets.
Run your debit card as a credit card. If this is not possible, cover the keypad while entering your PIN.
Consider paying the attendant inside rather than at the pump.

How to Protect Yourself at ATM

Before usage, inspect ATMs, POS terminals, and other card readers. Look for anything loose, crooked, scratched, or damaged. Do not use a card reader if you see anything suspicious.
Pull on the keypad’s borders before entering your PIN. Then, cover the keypad while entering your PIN to prevent cameras from capturing it.
Utilize indoor, well-lit ATMs, which are less susceptible targets.
Be wary of skimming devices in tourist locations since they are frequent targets.
Chip-enabled debit and credit cards should be used. There are fewer gadgets that steal chip data than magnetic strip data in the United States.
Avoid using your debit card while your accounts are connected. Instead, use a credit card instead of cash.
After ending or canceling a transaction, contact your banking institution if the ATM does not return your card.

If you think you’ve been a victim of skimming, you should report it to your bank or credit card company immediately. You should also change your PIN and monitor your account for unauthorized charges.

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Spoofing and Phishing

Spoofing is when someone pretends to be someone else to trick you into giving them personal information or money. For example, they might pretend to be from your bank, the IRS, or even a friend or family member. Phishing is a type of spoofing in which criminals send emails or text messages that look like they’re from a legitimate company to get you to share personal information or click on a malicious link.

To protect yourself from spoofing and phishing,

you should never give out personal information in response to an unsolicited email, text, or phone call.
You should also be wary of any emails or texts that look suspicious, even if they appear to be from a company or person you know.
If you’re unsure whether an email or text is legitimate, you can contact the company directly to ask. And if you get a call from someone claiming to be from your bank or another organization, do not give them any information. Instead, hang up and call the customer service number on your account statement to verify that the call is legitimate.

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What to do if You Have Been a Victim of Consumer Fraud

If you think you have been a victim of consumer fraud, there are several things you can do:

Report it to the Federal Trade Commission at ftc.gov/complaint or the appropriate government in your country.
File a complaint with your state’s attorney general or consumer protection office.
Contact your bank or credit card company and tell them what happened.
If you gave someone your social security number, contact the IRS Identity Protection Unit at 1-800-908-4490.
Change any passwords that you shared with the scammers.
Monitor your credit report for signs of identity theft. You can get a free copy of your credit report from annualcreditreport.com.
If you think you’ve been a victim of medical identity theft, contact your health care provider and your health insurance company.
If you’ve been scammed by someone posing as a government official, contact the actual agency to report it. For example, if you’ve been approached by someone claiming to be from the Social Security Administration, you can report it at oig.ssa.gov/report.

The Bottom line

Consumer fraud is a severe problem, and it can happen to anyone. However, by being aware of the different types of consumer fraud and taking steps to protect yourself, you can help reduce your risk of becoming a victim.