Common forms of consumer fraud

Consumer fraud has been a consistent headache long before the internet was conceived. One would remember those snake oils and other purported heal-all potions being sold by mysterious travellers in the old days. These tricksters have evolved along with technology. Now, many of these fraudsters are found typing away at a laptop and doing more damage than ever imagined just by pressing the Enter button.

The times may have changed but the definition of consumer fraud still remains mostly intact. It can occur anytime a victim suffers a personal or financial loss through the use of deceptive or unfair business practices. More importantly, authorities and the general public now have a better understanding of the most prevalent forms of consumer fraud. Below are several types of consumer fraud and what consumers can do to protect themselves.

Identity fraud

When an individual’s personal information is used without consent or authorization, identity theft occurs. The undue financial gain from this theft becomes identity fraud. 

For instance, if a credit card company’s servers containing client information aren’t as secure as they should be, hacking into these servers could set into motion a massive data leak and increase the chances of unscrupulous entities using victims’ credit card data for unauthorized purchases or transfers.

Financial research group Javelin Strategy & Research, in its 2021 Identity Fraud Study, found that global losses on a national scale due to identity fraud reached $56 billion in the previous year.

Potential indicators of identity fraud:

  • Suspicious withdrawal notifications from your bank.
  • Unexpected purchases recorded in your credit report.
  • Your employer informs you that the company has sustained a ransomware attack.
  • Billing statements suddenly stop getting delivered to your chosen address.

Preventing identity fraud:

  • Be hyper-aware of where and with whom you share your personal information. 
  • Avoid using family members’ names, birthdays, and other commonly used personal information when setting account PINs and passwords.
  • Enable two-factor authentication in your emails and other digital accounts. This assures that only you can approve of any transaction to be conducted through your digital account. 
  • When working remotely, avoid connecting to public WiFis, especially if you frequently handle sensitive information in your line of work. 

Credit and debit card fraud

This type of fraud is focused specifically on the use of bank cards. While incidents involving this still happen, it’s no longer on a massive scale as banks and payment merchants have significantly improved the security features of these cards. 

The use of an EMV (Europay, MasterCard, Visa) chip, for example, enables a card to create a unique code every time a transaction is made. That way, stolen credit information from a store purchase can’t be used again. 

Potential indicators of credit and debit card fraud

  • Unsolicited calls that request card information. Many of these phony callers will contact you on the premise of helping you in taking advantage of reduced bank fees and other promos.  
  • Unrecognized establishments alongside your credit charges. Some may even be located in places you’ve never been to before.
  • You receive a notification from your bank that your card has been blocked due to potentially suspicious activity.    

Preventing credit and debit card fraud

  • Scrutinize each line item in your credit, no matter the amount. Small yet unfamiliar transactions may be preludes to bigger unauthorized purchases.  
  • Never share your card details via social media and other apps that want you to give them access to your personal details and other sensitive data. 
  • If you must share card details to family members digitally, use encrypted messages that will automatically delete in a given time duration. Better yet, consider calling them directly and dictating your card information.

Mortgage fraud schemes

Fraudsters make no distinctions when preying on unknowing consumers. When it comes to mortgage fraud, they often target distressed homeowners or low-income buyers. Some may even collude with shady real estate professionals who possess private information about clients who are financially struggling.

Potential indicators of mortgage fraud:

  • You receive a call or email that says foreclosure will not push through.
  • You encounter several administrative roadblocks in the process of buying a home. 
  • Critical questions about the buying process and loan details are not sufficiently answered.
  • You’re told that monthly payments must be made to a different mortgage provider or a third party.

Preventing mortgage fraud:

  • Prior to dealing with a suspicious party, ask them to present their identification, license, and credentials.
  • Avoid signing documents or papers that you don’t completely understand.
  • Don’t be pressured to opt into a deal when the other party is rushing you to make a decision. Keep asking questions to verify their statements and offers.

Seek legal remedies against consumer fraud

When all else fails, consumers may need the expertise of seasoned class action attorneys in San Diego. Hogue & Belong Attorneys at Law specializes in lawsuits that expose fraudulent commercial conduct.

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