Millions of Americans fall victim to hundreds of different types of fraud every year; some frauds may cause nothing more than embarrassment, while other frauds can cost a person everything they have.    Fraud may be nothing new, but since the advent of computers, fraud has been steadily on the rise.  In fact, it has been estimated that 60-90% of all incidents of fraud were committed with the help of a computer.

Estimates on the annual cost of fraud and the number of victims greatly vary; however, the indisputable fact is that fraud is very common in American society.  Therefore, the best solution is awareness.  While some fraud schemes can be quite elaborate, many are very simple and play off of the general public’s inattention to detail, hesitancy to confront questionable situations and general lack of effort to actively protect one’s self.  As a general rule of thumb, if something seems too good to be true, is not being done logically or is against standard business practice, or just seems wrong, more than likely something is wrong.

Fraud needs to be addressed before it is even suspected through consumer education and awareness.  Taking a little time to research fraud and become more familiar with common schemes may save you countless hours and dollars (see official resources below).  However, in the meantime, consider the following basic fraud safety practices:

Common sense fraud reduction strategies

  • Guard your personal information:   Don’t provide any personal information to any seller/ business/ charity unless you know exactly who you are dealing with.  Be very guarded with your bank account and credit card numbers.  Your social security number should not be provided to anyone unless you are applying for credit.   Be especially suspicious if someone claiming to be from a company with whom you have an account asks for information that the business already has; tell the company representative that you will call the company’s main number back.
  • Pay the safest way: Credit cards are the safest way to pay for online purchases because you can dispute the charges if you never get the goods or services or the offer was misrepresented.   Federal law limits your liability to $50 if someone makes unauthorized charges to your account, and most credit card issuers will remove them completely if you report the problem promptly. There are new technologies, such as “substitute” credit card numbers and password programs, that can offer extra measures of protection from someone else using your credit card.
  • Know who you’re dealing with:  If it’s not a large national company, stick to dealing only with a local seller/ business/ charity.  If the seller/ business/ charity is unfamiliar, check with your state or local consumer protection agency (including the Better Business Bureau) and “Google” the name of the seller/ business/ charity. Some websites have feedback forums which can provide useful information about other people’s experiences with particular sellers. Get the physical address and phone number, and verify it, in case there is a problem later.
  • Understand the offer:   A legitimate seller will give you all the details about the products or services, the total price, the delivery time, the refund and cancellation policies and the terms of any warranty.  When renting an apartment or condo, make sure you see the full contract prior to putting any money down.
  • Resist pressure:   A legitimate seller/ business/ charity will be happy to give you time to make a decision.   It may be a scam if they demand that you act immediately or won’t take “No” for an answer.
  • Look/ ask for information about how complaints are handled:   It can be difficult to resolve complaints, especially if the seller/ business/ charity is located in another state or country.   Look on the website for information about programs the company or organization participates in that require it to meet standards for reliability and help to handle disputes.  If you are dealing with someone who doesn’t have a website, ask them how they will handle a dispute before you complete and transactions.
  • Be aware that finding no complaints is no guarantee:   Fraudulent operators open and close quickly, so the fact that no one has made a complaint yet doesn’t mean that the seller/ business/ charity is legitimate.   You still need to look for other danger signs of fraud.
  • Don’t believe promises of easy money:   If someone claims that you can earn money with little or no work, get a loan or credit card even if you have bad credit, or make money on an investment with little or no risk, it’s likely to be a scam.
  • Be cautious about unsolicited emails:  They are often fraudulent!   If you are familiar with the company or charity that sent you the email and you don’t want to receive further messages, you may consider sending a reply asking to be removed from the email list.   However, responding to unknown senders may simply verify that yours is a working email address and result in even more unwanted messages from strangers.   Therefore, the best approach may simply be to delete the email.
  • Think twice before entering contests operated by unfamiliar companies: Fraudulent marketers sometimes use contest entry forms to identify potential victims.
  • Beware of imposters: Someone might send you an email pretending to be connected with a business or charity, or create a website that looks just like that of a well-known company or charitable organization.   If you’re not sure that you’re dealing with the real thing, find another way to contact the legitimate business or charity and ask.
  • Beware of “dangerous downloads”:   In downloading programs to see pictures, hear music, play games, etc., you could download a virus that wipes out your computer files or connects your modem to a foreign telephone number, resulting in expensive phone charges.   Only download programs from websites you know and trust.   Read all user agreements carefully.
  • Fake cashier checks and money orders are not uncommon: Banks may cash or deposit fake checks and then hold you responsible when they discover the problem days later.
  • Beware of imposters: Someone might send you an email pretending to be connected with a business or charity, or create a website that looks just like that of a well-known company or charitable organization.   If you’re not sure that you’re dealing with the real thing, find another way to contact the legitimate business or charity and ask.

For further information on fraud

Who should I notify about fraud/ scam attempts

  • FTC online complaint form at www.ftc.gov or FTC toll free hotline: 877-FTC-HELP (877-382-4357)
  • Internet Fraud Complaint Center at www.ic3.gov
  • The UM Police Department at (305) 284-6666