9 Common Types of Frauds and How to Identify the Scams

Criminals used to put a gun in your back, tell you to put your hands up, and take your wallet. Now, they pretend to be Nigerian princes or affluent Japanese businessmen and promise enormous wealth in exchange for a $250 shipping fee.

If you have ever been the victim of fraud, then you know how awful it really is. Not only have you had your identity or money stolen, but you also didn’t even realize these types of frauds were happening. That is usually the case in this day and age.

Here are nine types of fraud that every consumer needs to be alert about:

1. Work-from-Home Scams

For years, many people have dreamed of working from home, ditching the morning rush hour, avoiding asinine water cooler talk, and eating food at home. Because working from home is more prevalent today than at any other time, you are beginning to see a lot more online ads promoting this opportunity.

Unfortunately, a lot of these ads turn out to be scams, mainly because they request a fee at first with the promise vast wealth-building at-home jobs. These never happen and you are out $10, $20, or $100.

Remember, if it is too good to be true, then it probably is.

2. Pyramid Schemes

Believe it or not, pyramid schemes are still around today, whether it is in the financial sector or sales.

If you need a refresher, a pyramid scheme is the promise of immense returns on their investment if they recruit others to their initiative. Typically, people will need to put down an upfront payment for whatever it is that is being sold – business or investment – and then make money if they are able to get others to join.

These types of fraud have become a little bit more complicated in recent years, but they still maintain the same idea.

3. Identity Theft

No one will argue the fact that identity theft is the most common type of fraud in this era, thanks to the Internet. Criminals will extract the identity of their victims – name, age, social insurance number, and other important personal details – and take their money and damage their credit rating.

There all sorts of ways culprits perform identity theft:

  • Shoulder surfing (watching you insert your pin code).
  • Infiltrating unsecured websites.
  • Victim research (navigating the online world).
  • Computer hacking.
  • Dumpster diving (literally!).

Online or offline – there is no escaping ID theft. These remain one of the most common types of fraud in the consumer market.

4. Website Misdirection

Most people don’t fall for it, but criminals are betting on the fraction of a percent who will.

Website misdirection is an annoyance, but it can be dangerous, too because thieves will replicate websites like Amazon or PayPal and direct visitors to another website to enter personal information.

So, the next time you type in amzon.com, you might be visiting a scam.

5. Phishing

Phishing in 2019 is comparable to the spam of 1999, but far more harmful if you fall for it.

This is when hackers will use an email address that looks like it is coming from the original source (Netflix, Amazon, a bank, or PayPal) and then sends you a message informing you that your account has been compromised. You will then be asked to click a link and enter your personal details, which will be utilized for unscrupulous purposes.

They were obviously fake a few years ago, but these types of frauds are becoming more authentic looking. It is remarkable how much hackers have improved their tactics.

6. Insurance Fraud

Let’s be honest: A large chunk of insurance fraud cases involve people who are generally good individuals but are sick and tired of insurance companies. Still, it is wrong and illegal.

Across the United States and Canada, insurance fraud is committed with the intention of inflating insurance claims for homeowners insurance, automobile damages, or healthcare expenses. Most insurance firms have immense departments and personnel to determine if claims are legitimate – every company has its own Barton Keyes from Double Indemnity.

A careful and in-depth insurance fraud investigation should be able to root out the perpetrator. Depending on the circumstances, he or she could be charged with a felony for committing insurance fraud.

7. Credit Card Fraud

With credit cards being used more than ever before for daily transactions, the chances of having your piece of plastic compromises are greater. The criminal can gain access to credit card information through many different methods, allowing him or her to make immense purchases in a short amount of time.

8. Telemarketing Scams

Yes, telemarketing scams are still ubiquitous. People pretending to be charities are still influencing households to donate money to the Human Fund. Folks from India, playacting as representatives of the Canada Revenue Agency or Internal Revenue Service, are threatening to arrest taxpayers if they don’t pay their tax bill right away.

These have made national headlines every single year, but people, particularly seniors, are victimized.

9. Ecommerce Sales

Digital shoppers are smart creatures, knowing what is too good to be true and what is a good deal. Plus, many online patrons utilize the same websites – Overstock, Amazon, eBay, or Walmart.

However, trying to find those amazing sneakers or attempting to save money on a smart TV, some will see some shady website and find a once-in-a-lifetime deal. It turns out to be a lie; the website owner never intended to ship the product, or the item is counterfeit. Ecommerce sales still happen, but you should give it up to Internet users to avoid these like the plague.

The different types of frauds are everywhere and can transpire at any time. It is best to be a safe and smart consumer who can ensure that he or she is not victimized by unscrupulous individuals who refused to make an honest day’s pay. Ultimately, if you employ the right safety measures, then you will be protected from these lowlives.

About Author

Justin is a journalism student from Ottawa, Canada. Since a young age, he has felt a passion for writing along with a knack for asking curious questions, which guided him into his current path today.