Most Common Types of Consumer Fraud
Consumer fraud and identity theft go hand in hand. When a consumer falls victim to fraudulent activity, their identity is usually at stake. There are a lot of ways scammers can take advantage of consumers, but the only way consumers can effectively protect themselves is by being aware and taking precaution. Here we discuss some of the common types of consumer fraud.
Check or Cashier’s Check Fraud
This type of fraud is completed by taking advantage of trusting consumers. Often a consumer will be paid by personal or cashier’s check for either goods or even services. These checks can be fraudulent in nature, but due to federal laws, the bank in which the consumer deposits the check can make the funds available to the consumer prior to verifying if the check is good. The consumer will in turn provide these scammers with products and services they “paid” for, only to find a few days later that the deposit is reversed in their bank account and they have been scammed.
Fictitious Banking
Often consumers are approached by banks that appear to be legitimate and offer loans, bank accounts or investment opportunities. These banking institutions do not exist, but have been created by identity thieves. They will use applications to steal a consumer’s identity or cash their investment checks without using them for any type of legal investment.
Prime Bank Fraud
These typically involve banking institutions that are located overseas offering American citizens high-yield investment opportunities. The bank or the investments do not actually exist. They will bait consumers by offering high-yield profits with little investment and effort. These scammers will claim to have prime knowledge on how banking institutions work and promise to produce results, but these are just bait tactics.
Phishing
A scam artist needs to be clever in order to get a consumer to hand over their personal information. Often they will stoop to phishing scams in order to do so. By pretending to send emails from a legitimate source, these phishing scams will convince consumers to click on links and provide personal information to what they think is a legitimate source, but in fact is an identity thief in disguise.