What are the Most Common Types of Consumer Fraud?

Cybercriminals constantly brew new tactics to access your personal information or get cash from you through unfair means. With advancements in technology, there has been a surge in consumer fraud cases that have led to hefty losses. Arm yourself with all the information you need to remain protected from such online scams.

What is Consumer Fraud?

Consumer fraud involves an entity using deceptive business practices that result in consumers being misled or sustaining losses. It could include inaccurate claims, false promises, and other illegal business transactions without the victim’s awareness.

 

According to the FTC (Federal Trade Commission), fraudulent scams represented a major chunk of consumer anxiety in 2020, with over 1.6 million recorded complaints being received. Unfortunately, it was also highlighted that consumer fraud victims aged 70 and older had the highest average loss amounts.

 

Anyone can be the target of such fraudsters, from senior citizens to college students. Various types of consumer fraud exist all over the world today. Therefore, it’s integral that people are aware of the common consumer fraud schemes and ways to deal with them to prevent loss.

#1- Identity Theft

You’ve been an identity theft victim if anyone steals your personal or financial information, such as credit card details, full name, and Social Security Number. The scam usually occurs through data mining, a process many organizations use to convert raw data into insightful information.

Unexpected credit card charges or unusual bill payments are common signs of identity theft. If you ever encounter unrecognized charges in your statement, report them to your bank immediately. The Fair Credit Billing Act allows you to make claims within 60 days of statement issuance if the amount is more than $50.

#2- Lottery Fraud

Many victims receive emails, phone calls, and texts notifying them they’ve won some prize, lottery, or sweepstakes. If the sender requests you to send money to cover taxes or other costs, it’s probably a fraudster trying to scam you. Advanced techniques include setting meetings before winning the prize or receiving winner notifications via bulk mail. Don’t fall for this scam; report online fraud right away!

scam documents

#3- Real Estate or Mortgage Fraud

Consumer fraud also includes illegal real estate and mortgage transactions. Agents scam victims by misusing their specialized knowledge of real estate law and the market in general. Consumers are often misled into signing papers without having the chance to understand or read them.

You might be a real estate or mortgage fraud victim even if you were misled about the information about loans or foreclosure. The Real Estate Settlement Procedures Act has laws to protect consumers that engage in real estate transactions. Title and mortgage companies who don’t disclose the amount and nature of charges or take hidden fees from consumers may be liable for this law violation.

#4- False Advertising

By law, businesses must make accurate statements and representations about their services or products’ qualities, characteristics, and benefits. Whenever any company misrepresents an item they sell by making declarations or claims that aren’t necessarily true, it can come under false advertising. This includes false claims that their products can improve your mental or physical health or other capabilities.

What to Do if You’re a Victim of Consumer Fraud

As soon as you figure out a website or business isn’t legit, report online fraud and file scam reports via FraudTrac. Reporting malicious activities can help ensure no one falls victim to consumer fraud. Partner with us to promptly report malicious activities, consumer fraud, pension scams, credit card frauds, auto dealer frauds, and more.

We also recommend searching business profiles at our online scam tracker website to verify whether the company is authentic or in the market to scam people. Fight bad business behavior with us!

 

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