Know how fraud happens

Do you know a victim of fraud or identity theft? Has it happened to you? It is not surprising if you answer yes. Individuals age 20 to 29 accounted for more than 71,000 fraud incidents in 2017, with a median loss of $400, according to the Consumer Sentinel Network Data Book. Links to an external site. This information is provided by the Federal Trade Commission and is based on first-hand accounts from consumers filing official complaints with the government. Only consumers who provide their age are included in the sample, which is about 49 percent of the total.

No matter your age, income or resources, fraud can happen to you. Fraudsters are adept at creating emergencies and exploiting your overconfidence.

Common scams include:

  • Phone scams — Callers demand a fee or penalty for some service or application.
  • Identify theft — A thief assumes your identity to conduct business or open accounts without your approval.
  • Nigerian email or letter fraud (419 scheme) — Thieves ask for your bank account or other personal information promising a reward. It’s sometimes called a 419 scheme, which refers to the Nigerian criminal code it violates. While the scam originated in Nigeria, it can happen with thieves from any country.
  • Ponzi schemes — Scammers promise high rewards from a nonexistent or falsely presented investment. Money from new investors is used to pay dividends to earlier investors and the fund manager.
  • Advance fee schemes — You pay an upfront fee for products with the intention of profiting off the sale of the items. Often the products are inferior, difficult to sell or never show up.
  • IRS Imposter scams — A thief calls, emails or texts claiming you owe taxes or asking you to verify personal information. It is important to remember that the IRS will only contact you by mail.

People who commit fraud have no concern for your future, education or financial ambitions. They are thieves, stealing from your financial well-being. Knowing what kinds of schemes are aimed at young adults, how to protect yourself, the legal resources available and what to do if your information is compromised can make you more secure.

 

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