Financial Fraud and Scams
Millions of people in the United States are victims of financial fraud crimes every year. The crimes happen when someone tricks you into paying for something you never receive. Anyone can be a victim of fraud crimes.
If you are a victim of financial crime, it may make you question your own judgment. It can also destroy your trust in others, especially if the offender is someone you know. You may be embarrassed to tell anyone what happened. You may worry that your friends or family will criticize you.
You are not alone, and there are resources to help you.
What is financial fraud?
Financial fraud happens when someone tricks you into paying for goods or services, but you never get them. That’s because:
- The person or business never meant to provide them, or
- The goods, services or financial benefits did not exist.
What are some common types of financial scams and fraud?
Most of the time, the fraud crimes happen over the internet, telephone, or by letters or brochures. They offer things, such as free vacations, or investment opportunities.
Examples of financial fraud include:
- Telemarketing fraud: You get a phone call selling fake goods or services, or saying you won a prize, money, or vacation.
- Mail fraud: Someone uses the mail to get your money or property.
- Identity theft: See Identity Theft tab.
- Bank fraud: Someone pretends be a bank to get your money.
- Embezzlement: Someone in charge of your money takes or uses it wrongly.
- Pyramid or Ponzi schemes: A company or person promises you a lot of money if you invest, but instead, they give your money to previous investors.
- Advance fee schemes: You pay money to get something more valuable but you get little or nothing back.
- Internet fraud: Someone uses the internet to trick you.
- Telephone con-artist scam : Someone pretends to be a family member who needs money right away, or says they are from the IRS and demands you pay a phony tax bill.
- COVID-19 scams: This can include scams related to fake COVID-19 charities, fake tests and vaccines, or scammers trying to steal insurance information.
How are fraud crimes handled?
Fraud crimes are prosecuted at the state or federal level. It depends on:
- The type of fraud
- How much money was stolen
- The laws violated
- Where the crime happened.
For more information about common scams, visit the FBI website.
What can I do to avoid scams?
- Don’t share your personal or financial information via email, text message or over the phone.
- Do not click any links in a text message. If a friend sends you a text with a link that does not seem normal, call them to ask if they sent it.
- Be cautious if you are being pressured to share any information or make a payment immediately.
- Check on a charity by calling or looking at its actual website before donating.
- Share less of your personal information online. Scammers can use the information you share to “phish” or guess answers to your security questions.
- Delete old accounts. The more online accounts you have, the greater the risk of your personal information being stolen or misused.
- Allow automatic software updates on your devices. This will ensure you have the most up to date security and operating systems.
- Use multifactor authentication. If someone steals your password, this added layer of security will help prevent them from accessing your account.
- Use safe payment methods. Credit cards offer legal protections that gift cards, cryptocurrency, and wire transfers do not have. Be careful when using peer-to-peer payment apps like Venmo and Zelle because once a payment is made, it usually cannot be reversed.
Can I block scammers?
Wireless carriers already identify and block calls that are likely to be scams or spam, but there are things you can do to reduce calls from scammers.
- Silence calls from people you do not know.
- On an Android phone, go to the phone app, then Settings, then Blocked numbers, and turn on Unknown.
- On an iPhone, go to phone Settings, then Phone, then choose Silence Unknown Callers. Also, go to Call Blocking & Identification, and turn on Silence Junk Callers.
- Sign up for the National Do Not Call Registry. This will not stop scammers but will block most sales calls.
For more information, please see this article from Consumer Reports.
Where can I go for help?
You can contact a crime victim advocate near you. Or go to:
- Federal Trade Commission to report the fraud online or 1-877-FTC-HELP
- USA.gov to find the where to report the scam or call 1-844-CALL-USA1
- NYS website to report fraud, scams, and Identity theft
- Bureau of Consumer Frauds & Protection or call their Consumer Helpline at 1-800-771-7755
- Consumer Financial Protection Bureau or 1-855-411-2732
For more information, please go to:
- Federal Trade Commission “What to do if you were scammed“
- United Way, “Educate yourself on scammers”