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Scams and Fraud

Scams and fraud are costing the U.S. consumer nearly $20 billion each year. Since the spread of email and the internet, the number of scams have been on the rise and increasing use of social media means scammers aren’t going away any time soon.

Do I have a Case?

scamA scam is a dishonest scheme or plot to defraud someone.  Fraud is a criminal attempt to deceive someone to obtain financial or personal gain.  Scams and frauds have been around forever but the use of email, the internet, and social media dramatically increased the number and ability for scammers to victimize millions of people each year.

People who suspect they may have been a victim of an online scam or fraud may report the experience to or to a number of state agencies.  Outside of the U.S., many countries have similar reporting methods.  By reporting scam or fraud, others may be warned and protected.

Staying Clear of Scams and Fraud

The only good way to deal with a scammer is to avoid being a victim in the first place.  Here are four steps you can take to avoid falling victim to scams and fraud:

Make certain the email is real.  One of the most common ways that scammers perpetrate their frauds is through trickery.  Make sure that emails and websites are legitimate before clicking on a link.  Do a quick internet search from a different browser window to verify.  If you are still unsure, delete it.

Don’t give out personal details.  Especially when it comes to phone calls, don’t give out personal details to unsolicited callers.  If you don’t know who they are or don’t recognize a number, don’t answer the phone.  If they are someone you want to talk to, they will leave a message and you can call them back.  Never give out information like birthdate, social security number or even account numbers over the phone.

Keep an eye on all your accounts.  Make sure you are monitoring your bank and credit card balances and transactions.  Get an annual (or more frequent) credit report to ensure there is no fraudulent activity such as new accounts you don’t know about.  Sign up for account alerts with your bank or credit card companies.

Report suspicious activity.  Report anything that appears fraudulent or you did not authorize.  Your bank or credit company may be able to help you get your money back and the more reports that are filed by consumers about a particular scam, the more likely scammers are to get caught.  If nothing else, others may be prevented from falling prey to the same scam.

Common Types of Scams

Scams occur every day and though there are thousands of ways to defraud the unaware, some are more common than others.  Here are a few of the most common:

Phone Scams

No matter why they say they are calling, most phone scams are an attempt to get your personal information.  Scammers want to know about you, your finances and your habits so they can use the information to access your financial accounts or steal your identity.

Elderly people are the most common targets of phone scammers.  Older individuals are more likely to believe a call is legitimate, more likely to provide detailed information over the phone and may be easily confused.

Tips to avoid phone scams

  • Add both cell and landline phone numbers to National Do Not Call Registry
  • Don’t answer phone calls from unfamiliar numbers or callers
  • Don’t give out private information to anyone who calls you, even if they say they are with your bank. Have them hang up so you can call them back using the customer service number from the internet.
  • Anyone who calls you who has a right to your information already has it, they don’t need to get it over the phone. Never give callers private information such as:
    • Date of birth/age
    • Social Security number
    • Bank account number or routing number
    • Credit card number or security code (CVV/CVV2)
    • ATM Pin or other codes
    • Mother’s maiden name or other secret questions
    • Other personal details

As a rule, the IRS has stated that they never call taxpayers at home or businesses.  All IRS communication will come through the U.S. mail.  In addition, most law enforcement agencies do not use telephone communications to obtain compliance.  Do not fall for a phone call that claims to be enforcing an unpaid fine, even if they threaten arrest.  Call the police if this happens.

Email Scams

Email scams are solicited through emails.  They are from companies or individuals who claim to be something they are not.  They may have well-designed emails that look virtually identical to emails from the “real” company or they may be individuals that you think you know.  Common email scams include:

Advance Fee Scams

This scam tries to get you to send a small amount of money as a fee to “unlock” an account with a much larger amount.  Typically, the sender will be an unknown person who claims you have won an award or received an inheritance but should send money for a processing fee before you can access it.

In the past few years, it has been known as the “Nigerian scam” and is usually originating in Africa, specifically Nigeria.  In previous years, the scam was run by other means including regular mail, fax, and telephone but today, most of these scammers operate by email.

Phishing Scams

A “phishing” (sounds like fishing) scam uses email to trick you into revealing personal or financial information or to revealing your password to give access to financial accounts or records.  Phishing emails often look like a legitimate company, bank or government emails and may have website addresses which appear to be legitimate, but they are intentionally deceptive.

They will use the same logo and official-sounding wording or phrases that trick you into revealing information.  They usually provide a link in the email to direct you to a password reset page or to fill out a form which gives them information about you.  Alternatively, the email may appear to be a threat and the link will lead to a page which you are supposed to make a payment with a credit card.  In some cases, the scammers make threats of severe penalties or even jail time if you do not comply.

The IRS has stated that they do not use email to communicate with taxpayers, nor do most law enforcement agencies, banks or other services.

Stranded Traveler Scams

A stranded traveler scam tries to get you to send money to “help” someone who claims to be stuck in another country.  The email will come from someone in your email contact list and state that they were traveling in Europe or another region and claim that their identification, tickets, luggage, money and credit cards were lost or stolen and that they need your help to get home.  The scammers have hacked into your friend’s email account and sent emails to everyone in their contact list.  Do not respond to this email, instead use another communication method (phone or social media) to contact your acquaintance or contact a mutual friend who can help advise them to change their password.

Tips to avoid email scams

  • Don’t open emails from suspicious or unrecognized addresses
  • Don’t communicate with anyone who asks for money by email
  • Never send money to someone you met via email
  • Remove your name/email address from unwanted or unused email lists
  • Use your email provider’s junk or spam filter to weed out scam emails
  • Use your email provider’s filter system to label and organize important messages or known senders
  • Allow virus program to scan incoming email
  • Do not click links in emails, especially if the sender is unrecognized. Use bookmark or URL in the address bar to navigate to the website you need to visit
  • Never agree to send money to someone you don’t personally know
  • Remember that the IRS does not communicate by email, text, social media or phone
  • Report IRS phishing scams to IRS. Report other phishing scams to government authority or to the company they are pretending to be a representative of
  • If you need to make a payment over the internet, do not do so from a link. Use your own computer to go to the website from a search or by typing the address in yourself

Product Scams

U.S. consumers spend $ billions each year on unnecessary or ineffective dietary supplements, pain management devices and consumer products that don’t work or have proven benefits.   Before buying anything online, especially if it a product that claims to improve your health, do some research.  Don’t just read the label or take the seller’s word for it, use your search engine to look for reviews and information on that product and only buy from a reputable vendor.

Tips for buying online

  • Research medical conditions and medical and health claims that the product has made on respected government and educational websites.
  • Search and read reviews from third-party websites and blogs (not manufacturer’s site) to see how others feel about their experience using the product
  • Talk to your healthcare provider about whether the supplement, medical device, or other product will work for you
  • Only buy products  from respected vendors

Shipping Scams

Shipping scams may be offered as a “work from home” opportunity.  The scammer asks you to receive packages and then ship them to someone else.  They promise to pay you the shipping cost plus a fee for your time.  Unfortunately, the fee or shipping reimbursement is never paid and because your address has been used for fraudulent purchases from a stolen credit card, you may find yourself under investigation from law enforcement.  In addition, the scammers now have some of your identifying information that they were supposed to use to pay you but may use to steal your identity and scam someone else.  This type of scam is more common during the holidays but it can occur at any time of the year.

Tips to avoid shipping scams

  • Never agree to ship or re-ship a package for someone you don’t know
  • Don’t give your address or personal information out to strangers who promise to pay you in the future
  • Avoid falling for “work from home scams” by searching the internet for reviews on companies and jobs. Include the word “scam” in your internet search and you may find others with similar issues

Tips for staying safe on the internet

Even if you are not the target of a specific scam, there are some things you can do to protect yourself from identity theft and other types of fraud.

  • Log out when you are done with a specific website. This is even more important when using a shared or public computer
  • Keep your web browser and software updated so that you can be sure you have the most current security features
  • Make sure that your internet connections are secure. This will be identified by a small green padlock in the browser address bar and by “https” as part of the URL rather than plain HTTP
  • When going to a website, make sure that the URL is the website that you should be at. Many scammers use similar website names or redirect you to another site
  • Enable popup blockers on your browser so that you aren’t directed to a scam site automatically
  • Use strong passwords for online accounts. A password manager tool can help you remember them all.
  • When possible, don’t use unsecured or public wifi connections as they can give easy access to your system to hackers. If you have to use a public wifi, don’t conduct banking or sensitive business while on that network.

Recovering from a Scam

If you have fallen prey to a scammer, consequences can range from irritating to devastating.  Consequences may include:

  • Lost money
  • Identity theft
  • Credit cards or other debt in your name
  • Credit problems
  • Criminal charges
  • Civil liability

Recovering from financial or other problems caused by a scammer can be time-consuming and expensive and may take a long time to resolve.  Scammers are good at avoiding responsibility, even if caught, are unlikely to pay the bills.

Credit cards and banks are required to offer you some protection for accounts that you own.  This may help to minimize and potentially reverse some of the damage that has been done to you but not everything is usually recoverable.

In order to get any help, you must be willing to participate in an investigation and file criminal charges against the scammer if needed.  The steps you should take after falling victim to a scam or fraud include:

Call your bank and credit card companies immediately.  As soon as you discover the scam, call the bank.  You may be able to stop transactions from going through or may be eligible for a refund if fraudulent activity is reported right away.

File a fraud alert.  File a fraud alert on your credit report with all three major credit bureaus to alert future lenders of problems that have been experienced.  This may help protect you from further fraudulent accounts from being opened or extended.  You must notify each company separately and be aware that if you want new credit, you will have to go through additional steps to verify your valid request.  The three credit bureaus include:

  • Equifax – 800.525.6285
  • TransUnion – 800.680.7289
  • Experian – 888.397.3742

File a report with federal authorities.  The main place that scams and fraud should be reported is to the U.S. Federal Trade Commission (FTC), but other agencies may also be involved.  Federal authorities involved in investigations of scams and fraud include:


Name of and Link to Reporting Agency Type of Scam or Fraud
Federal Trade Commission Complaint Assistant Consumer and financial scams and fraud, including identity theft Complaint Form International fraud using the internet
Federal Bureau of Investigation Internet Crime Complaint Center Internet crimes (including scams and fraud) in the U.S.
Federal Communications Commission Consumer Complaint Center Telephone frauds and scams (including cell phones)
U.S. Postal Inspection Service Complaint Form Mail fraud or scams sent through the U.S. Postal Service
Health and Human Services Inspector General Fraud Report Medicare and Medicaid service fraud
Treasury Inspector General for Tax Administration Scam Report IRS agent imposters and related fraud or scams
U.S. Census Bureau Census agent imposters and related fraud or scams

Report scams and fraud to state agencies – In addition to reporting scams that you have been a victim of to federal agencies, you can also notify your state agencies.  This will help state governments know when investigations may be needed and will help to inform others in your state of scams and fraud attempts that are ongoing.  In most states, fraud and scams can be reported to the Office of the Attorney General of the state you live in.

Alabama Illinois Montana Rhode Island
Alaska Indiana Nebraska South Carolina
Arizona Iowa Nevada South Dakota
Arkansas Kansas New Hampshire Tennessee
California Kentucky New Jersey Texas
Colorado Louisiana New Mexico Utah
Connecticut Maine New York Vermont
Delaware Maryland North Carolina Virginia
District of Columbia Massachusetts North Dakota Washington
Florida Michigan Ohio West Virginia
Georgia Minnesota Oklahoma Wisconsin
Hawaii Mississippi Oregon Wyoming
Idaho Missouri Pennsylvania  


File a report with the Better Business Bureau.  Though the BBB is not a law enforcement agency, they can help to warn other consumers about potential fraud both in your local area and on the internet.

Get credit or debt counseling.  If your credit was damaged due to a scam or fraud, you may wish to consult with a credit counselor.  Make sure that you choose a legitimate, non-profit agency like those certified by the National Foundation for Credit Counseling (NFCC).  Do not use a commercial or ”for-profit” company that advertises debt consolidation or repayment services.  These companies generally have high fees and harsh terms and may themselves, be scams.

Consider getting advice from an attorney.  Most money that is lost in scams is never recovered but you may still want to pursue legal action.  This may be especially useful when dealing with a company or individual that you know.  Even if you can’t recover money, a lawyer may help you get some of your debt resolved or dissolved so that you are no longer liable for it.  An attorney may also help you protect yourself in the future.

Make sure that any legal advice that you get comes from a reputable lawyer who will provide an initial consultation for free.  Do not sign or pay any fees until you understand what your options are and what will be expected of you.

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