Common Types of Consumer Fraud

posted on Wednesday, February 23, 2022 in Financial Tips

Consumer fraud is any instance where an individual incurs a financial loss due to malicious means. It can be through unfair, deceptive, misleading, or false claims or practices. Activities of this nature target the naïve members of the population, such as the elderly or the youth who are inexperienced with handling their finances.

Nobody is 100% invulnerable to scams and deceitful tactics. Even the most financially savvy individual can still be a victim of consumer fraud. Because of that, fraud protection is something that everyone should prioritize. To familiarize yourself with these scams, here are a few common examples:

Identity Theft

Identity theft is not a joke. It has been estimated that millions of families suffer every year due to being victims of it. Identity theft happens when scammers and fraudsters steal your vital personal information such as name, Social Security number, checking or savings account, and more. The end goal for these thieves is to drain the funds from your account and use your name for purchases that you did not consent to.

There are tell-tale signs that you have been a victim. If you noticed that you have unexpected withdrawals from your deposit accounts or received calls and bills from debt collectors, you might be a victim of identity theft. You may also get a notification from the IRS about tax returns filed in your name.

Credit and Debit Card Fraud

This type of fraud happens when your credit or debit card gets stolen. This can also occur if fraudsters gain access to your card number and PIN to make unauthorized purchases under your name.

Thieves can get your information in various ways. Often enough, they can get your card number due to a breach in a retailer’s server and network. They can also have your information through phishing. Credit cards are protected by the Fair Credit Billing Act (FCBA) if the missing credit card is reported immediately. On the other hand, debit cards are protected by the Electronic Funds Transfer Act (EFTA).

Phone Scams

A phone scam happens when someone who pretends to represent a financial institution or government body contacts you via phone. In this fraudulent activity, they’ll attempt to steal your personal information and exploit you into giving them money.

Always remember that financial institutions and government agencies do not call people to verify their info. If you’re not sure if they’re legitimate, search the company they’re representing and then double-check their number.

With so many types of fraud and scams out there, it’s best to be familiar with them so that you won’t be the next victim. To learn more information about fraud protection, contact Community 1st Credit Union and talk to one of our C1st representatives.