Fraud is a purposeful act of making illegal financial gains, for oneself or an institution, through deception, false suggestions, truth suppression, or other unethical techniques trusted and relied upon by others.

Among the most fraudulent acts include:

  • Embezzlement
  • Alteration or forgery of documents
  • Unauthorized manipulation or alteration of computer files
  • Financial misreporting
  • Theft or misappropriation of resources
  • Authorization or acceptance of payment for goods or services not received or rendered, respectively

This post focuses on ten essential things you need to know about fraud and avoid it.

Spotting a Fraud

The rising numbers of fraud cases underscore the importance of recognizing the signs. Here are some to look out for.

Unexpected or Unsolicited Phone Calls

Individuals should avoid uninvited contact. Since January 2019, the government has prohibited cold contacting concerning pensions. This means that businesses should refrain from contacting individuals about their pensions unless they request.

Email Address

The majority of scammers send unsolicited emails. While these emails may appear to be from, for instance, TV Licensing, once clicked, they may show something different. If the communication is a hoax, the email address used to send it may not match the sender’s name or have random digits and misspellings.

Text Messages

Scammers in the modern era might make their numbers appear to be recognizable. This is referred to as ‘number spoofing.’ To be safe, individuals should avoid opening links in text messages and should not be hesitant to call the organization directly to confirm the communication is genuine.

Too Good to Be True Deals

If something appears inconceivable, it most certainly is. This is common in pension or business fraud cases, where the fraudster assures high profits and minimal risks.

Request for Personal information

Fraudsters request personal information, complete PIN codes, and passwords—things that no genuine business will ask.

Rapid Decision-making

Most scammers pressure consumers into making decisions on the spot. They do not wish for individuals to have time to consider. Any legitimate business that calls won’t care if the recipient hangs up and calls back later.

Random Competitions

These should raise red flags, especially if an individual has no recollection of entering them.

Issuing Threats

Scammers frequently scare individuals with severe penalties if they do not comply. They may inform them that they must deposit a check or risk jail time.

Unexpected Changes in Bank Account

If a fraudster obtains illegal access to an account, they may use the victim’s debit or credit card to make an illicit transaction.

How to Avoid Fraud

Apart from knowing what fraud looks like, it’s essential to know practical strategies to avoid it. Recent reports show that Americans lost $56 billion and $29.8 billion to identity fraud and phone scams in 2020. Undoubtedly, you don’t want to fall into that category.

Review your monthly financial statements

Scammers use stolen account information to commit crimes or rack up costs in your name. Untrustworthy merchants bill unauthorized monthly “membership fees.” If you see unrecognizable or unauthorized charges, immediately notify your bank, credit card provider, or other creditors.

Always Know Who’s Contacting You

Locate the seller’s physical address and phone number. If it’s an online business, search for its name and website, as well as for customer reviews. If the company has several negative feedbacks from customers, consider whether the offer is worth the risk. After all, a discount is only worthwhile if you receive a product that performs as advertised.

Understand that wire transfers are similar to cash payments

Fraudsters frequently insist on wire transfers, particularly to foreign countries, because it is practically impossible to trace or reverse the money. Never wire money to ‘businesses,’ strangers, or any alleged relative or friend in an emergency and wishes to keep the request confidential.

Consult your physician before purchasing any health items or therapies

Inquire about the research that backs up a product’s claims — and any potential hazards or adverse effects. Additionally, purchase prescription medications exclusively from licensed US pharmacies. Otherwise, you risk receiving counterfeit, expired, or mislabeled products.

Investing isn’t risk-free

Stay away from anyone who contacts you with high-return, low-risk investment opportunities. When you come across pitches that compel you to act immediately, guarantee significant returns, little financial risk, or demand immediate payment, report them to the Federal Trade Commission.

Never give money to an unknown recipient

This includes unknown online sellers or a love interest who requests payment. It’s advisable to conduct business with well-known and reputable websites. If you purchase online auction products, use a secure payment method, such as a credit card. On the other hand, know the person very well for a love interest before sending money. If possible, never discuss any financial-related aspect with them or send any money. A recent report indicated that around 24,000 Americans lost close to $1 billion to online romance scams in 2021.

Never agree to deposit a bank check and wire it back

Banks are required by law to release funds from placed checks within days, but detecting a forged check might take weeks. You are accountable for your deposited checks: If a bank finds that your check was fake, it will ask for a reimbursement. In most cases, people who insist on using checks are fraudsters.

Ignore messages requesting personal information

Scammers will email, call, text, or advertise to you, be sure to ignore suspicious texts. Do not click on any links or call any phone numbers provided. This is referred to as phishing. The scammers are attempting to dupe you into disclosing sensitive information. If you receive such a message and are worried about the status of your account, contact your bank immediately.

Avoid international lotteries

It is against the law to participate in a foreign lottery. Nonetheless, messages touting your odds of winning a foreign lottery or claiming to have already won can be alluring. In most instances, you’ll be requested to pay “taxes,” “fees,” or “customs responsibilities” to claim your prize. Such charges may overshadow your win. Besides, any money you send will be lost. Further, you’ll not be entitled to refunds regardless of guarantees or pledges.