How To Avoid Internet Fraud And Scams

The FBI began battling fraud in 1908, mostly for bankruptcy or accounting frauds.  One case we came across called “The Lady with the Big Heart” used stolen bank cash to pay for $150,000 worth of dinners and gifts for her friends.  The savings and loan crisis from the 1980s became the FBI’s first national financial fraud case where hundreds of agents investigated over 530 banks.  Healthcare fraud came onto the scene in the 1990s with 100 arrests in “Operation Gold Pill” along with classic telemarketing fraud ¹.

Just in 2016 alone, the Federal Trade Commission (FTC) reported 1.3 million fraud complaints. Of those 1.3 million, 77% of the scams were by phone, 8% were by mail, and 15% were through other ways. ² Anyone could be at risk for scams, however the elderly are typically at a higher risk to telemarketing, investment schemes, and internet fraud. ²

The Internet.  A More Popular Vantage Point

Scammers are emailing people and sending direct mail with websites that are not legitimate. People think that they are getting legitimate correspondence from the government or from the legitimate company. Criminals will phish for people who will fall for this, or easy targets. ² The websites often have copied logos and used very similar web addresses.

You don’t want to be caught in the middle of one of these scams, but what can you do to avoid them? Unfortunately there is no perfect solution to avoid these scams, however there are steps you could take to potentially decrease your risk of being targeted.

First and foremost, do not rely on caller ID to be accurate. For experienced scammers it is very easy and routine for them to manipulate the call in a way that would make you likely to answer. Going off of that, a lot of the time “robocalls” or some “automated calls” are illegitimate and used to get information.²  

In this case, the saying “too good to be true” is one to remember. Beware of “free trials” and “prizes” that would require you to give out financial information. It is ok to be skeptical when it comes to your personal information.²

Reach Out To People For Guidance

Dealing with local companies that have good reviews and testimonials is a great way to have a personalized experience while at the same time helping to protect yourself from being scammed. Local business are typically supportive to the community and want to be involved. Talk to people you trust or you know and try operating by referral. A lot of the time it may seem easier to go online and find a random service provider that way, but sometimes taking a little extra time to ask around for a referral can be worth it in the long run when it comes to risk and customer service.

When you’re talking about your life savings you need to talk to people that you’re acquainted with in some form. When it comes to making decisions, take your time and get a second opinion. Consider including your family members or even close friends that would have your best interest in mind.

Pro-Active Approach to Scams

Doing your own research can go a long way in making sure you stay educated and up to date on scam alerts and how to prevent them. You can even sign up for scam alerts here.  Consider ways in which you can monitor your credit score as well as any activity related to your credit report such as setting up an account at www.annualcreditreport.com or by calling (877) 332-8228.

For more helpful information and resources, visit the Report Scams and Fraud page on www.usa.gov.³ 

Think you are a victim?

You can request to place a fraud alert in your credit report. With doing this, creditors who check your credit report must take steps to verify your identity before opening a new account, obtaining a new credit card, increasing current credit limits, or any other actions. There are 3 nationwide credit reporting companies, and once you place a fraud alert at one of them, it is required to notify the others.⁴ 

According to the FTC, in most cases you do not need to file a police report, but instead report it directly on the FTC website. There are certain circumstances where you would want to file a police report and they are:

• A creditor, debt collector, or any party affected requests you produce a police report.⁵
• Your name was used by an identity thief in an encounter with the police. For example, a traffic stop or violation.⁵
• You know who has stolen your identity and have information that could help the police in the investigation.⁵

One additional complaint you could file is with the Attorney General’s office. The form can be accessed here, and can be filled out online or downloaded in pdf format. By doing this consumers are providing information that can help to bring criminals and scammers to justice.

Make sure to tune into Bruce’s show next week for a new financial topic!

Sources:

1. https://www.lexisnexis.com/LegalNewsRoom/financial-fraud-law/b/blog/posts/financial-fraud-s-explosive-growth-through-the-years
2. www.american-equity.com/resources/blog/tips-to-avoid-fraud-and-consumer-protection-information
3. https://www.usa.gov/
4. www.consumerfinance.gov/ask-cfpb/what-do-i-do-if-i-think-i-have-been-a-victim-of-identity-theft-en-31/
5. https://www.lifelock.com/education/how-to-report-identity-theft-to-police/

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