A Brief Guide to the Various Forms of Fraud

Tens of millions of US citizens become victims of fraud each year, and the majority don’t even realize it’s happened to them. While you might think of fraud as someone assuming your identity and hacking into your bank account, there are many different forms of fraud that people should be aware of to stay vigilant against an attack. Alternatively, there are acts you can commit that may also be considered fraudulent.

Here are just some of the more common types of fraud:

Identity Theft

Identity theft is one of the most common forms of fraud. There are many ways a person can steal someone else’s identity, such as intercepting their mail, taking their driving license, social security number, tax ID, or medical records. Even child identity theft is now commonplace and may be used to purchase goods, take out loans, or receive government benefits. Identities can even be stolen when a person’s smartphone or tablet is “paired” with consumer products, such as cars, household appliances, and even heart monitors.

Health Care and Health Insurance Fraud

Health care and health insurance fraud comes in many forms. Giving out your Medicare number should be done only with extreme care and only if you are sure it is required for a legitimate reason. It is unlikely that a genuine representative from Medicare would ask a person for this information.

Telemarketing Fraud

Telemarketing fraud occurs when a person is persuaded, over the telephone, to part with their money or take a particular action, such as giving away personal information to receive some form of “special offer.”

419 Fraud

This is where a person receives a letter or email saying an important or powerful person needs help accessing money and will be the beneficiary of vast sums in return for sending money or giving out personal details such as bank account numbers to assist them. You have likely heard of one example, the “Nigerian prince” emails.

Advance Fee Schemes

An advance fee scheme is when a fraudster persuades you to part with money disguising it as a fee for a loan or a high-value item to be received once you pay. Often, the loan or item does not exist, and you get nothing in return.

Mortgage Fraud

People who commit mortgage fraud tend to target those who are behind on their mortgage payments and offer services to help “rescue” them. Borrowers can also commit mortgage fraud, however, by falsely claiming they have certain assets so that they can borrow more money.

Debit and Credit Card Fraud

Debit and credit card fraud is often unavoidable and can occur when a person takes your card to pay for a transaction, for example in a restaurant, and copies your information. If possible, don’t let the card out of your sight. This can also occur when inputting credit or debit card details to pay for something online or using it for gas.

Lottery Fraud

Older adults are particularly vulnerable to lottery fraud scams where they are convinced they have won something and are persuaded to part with cash to cover fictitious taxes or fees before they can receive their prize.

Payroll Fraud

Payroll fraud can occur if a business doesn’t understand or supervise its bookkeeping. If there are any discrepancies in finances, business owners should make sure the bookkeeper has a logical explanation.

Investment Fraud

The most common type of investment fraud is where a scammer will tell the person they can invest their money practically risk-free with the promise of high returns. They then use what you give them personally or to pay off their own debts.

Being victimized by fraud can be extremely upsetting. But the nature of this type of wrongdoing makes it possible that you could be committing fraud without even fully realizing it. If you’ve been accused of fraud, you need to take steps immediately to protect yourself.

Have you been charged with fraud? The experienced attorneys at Cove Law can help. We’ve been defending state and federal fraud cases throughout the U.S. for over 25 years. Get in touch for a free, confidential consultation today.

Written by Andrew Cove

Cove Law has significant experience defending federal investigations and formal actions by the Federal Trade Commission, the Consumer Finance Protection Board and the U.S. Department of Justice, as well as similar matters on the state level by the respective state Attorney General’s Offices and other local agencies.