Types of consumer fraud

On Behalf of | Sep 17, 2021 | Consumer Fraud

Consumer fraud occurs when deceptive business tactics cause financial loss. Advanced technology enables criminals to devise new schemes and put a twist on the old ones. Knowing some common consumer scams may help people in Vadnais Heights, Minnesota, avoid falling for them.

Identity theft

The FTC reports ID theft as the top complaint for the last 15 years and estimates that there are 9 million victims annually. Identity theft involves an offender stealing someone’s personal data, such as credit card PINs or social security numbers.

Getting data is commonly done without their knowledge, but offenders may steal data over the phone, such a posing as a charity. Some credit cards and banks offer consumer protection protocols to guard against ID theft and fraudulent purchases.

Phishing

Phishing is a form of financial fraud that uses the internet to steal data from unsuspecting users. Criminals frequently use emails claiming that the victim has a computer virus or needs to verify an account.

The emails appear to come from a legitimate website, but, instead, they point to the scammer’s website. This enables the scammer to steal the person’s data, sometimes downloading ransomware on the computer.

Mortgage fraud

Mortgage scams target desperate homeowners who are behind on their mortgage or facing foreclosure, promising to rescue them. A common scam is a buyback scam, which promises owners they can buy back their homes once they get financially stable.

However, the scammer requests the title while the owner pays rent, but it never gets to the lender. Some scammers offer the owner relief if he or she pays a fee for the service or fake counseling.

Stats from the FTC show consumer fraud has increased and cost consumers over $3 billion in 2020. If an individual thinks that he or she has been a victim, he or she can report it to the FTC.