- Common Scam Fraud Schemes
- Advance fee fraud
- Types of advance fee fraud include:
- Unexpected prize & lottery scams
- Business Fraud
- Counterfeit Prescription Drugs
- Credit Card Fraud
- Fraud Against Seniors
- Senior Grandparent Scams
- Fraudulent Cosmetics and “Anti-Aging” Products
- Funeral and Cemetery Fraud
- Health Care Fraud or Health Insurance Fraud
- Identity Theft
- Internet Auction Fraud
- Internet Fraud
- Investment Fraud
- Letter of Credit Fraud
- Market Manipulation (“Pump and Dump”) Fraud
- Nigerian Letter or “419” Fraud
- Non-Delivery of Merchandise
- Ponzi Schemes
- Prime Bank Note Fraud
- Pyramid Schemes
- Redemption / Strawman / Bond Fraud
- Reverse Mortgage Scams
- Telemarketing Fraud
- Phone Scams: Beware of These 8 Common Telephone Scams
- How to Spot Phone Scams the Ultimate Guide
- See also
- 5 Pet Scams You Need to Know
- Government Imposter Scams
- Job Employment Scams
- Shipping, Reshipping, Forwarding Scams
- Unexpected prize & lottery scams
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Common Scam Fraud Schemes
An advance fee scheme occurs when the victim pays money to someone in anticipation of receiving something of greater value—such as a loan, contract, investment, or gift—and then receives little or nothing in return.
Advance fee fraud
Advance fee fraud is when fraudsters target victims to make advance or upfront payments for goods, services and/or financial gains that do not materialise.
Types of advance fee fraud include:
- Career opportunity scams
- Clairvoyant or psychic scams
- Cheque overpayment fraud
- Dating or romance scams
- Fraud recovery fraud
- Impersonation of officials
- Inheritance fraud
- Loan scams
- Lottery, prize draw and sweepstake scams
- Racing tipster scams
- Rental fraud
- West African letter or 419 fraud
- Work from home and business opportunity scams
- Vehicle matching scams
Source: Action Fraud
Business fraud consists of activities undertaken by an individual or company in a dishonest or illegal manner designed to be advantageous to the perpetrating person or establishment.
Counterfeit prescription drugs are illegal, fake medicines that may be hazardous to your health.
Credit card fraud is the unauthorized use of a credit or debit card, or card number, to fraudulently obtain money or property.
Senior citizens should be especially aware of fraud schemes targeting their lifestyle and savings and follow a series of tips to protect themselves and their family members from fraud.
The Internet has given consumers widespread access to health and beauty products, including “anti-aging” products, that they do not know are fake.
Regulations for prepaid funeral services vary from state to state, providing a window of opportunity for unscrupulous operators to overcharge expenses and list themselves as beneficiaries.
The FBI is the primary investigative agency involved in the fight against health care fraud, with jurisdiction over both federal and private insurance programs.
Identity theft occurs when someone assumes your identity to perform a fraud or other criminal act.
Consumers are strongly cautioned against entering into Internet auction transactions with subjects exhibiting irregular behavior or making odd payment requests.
Internet fraud is the use of Internet services or software with Internet access to defraud victims or to otherwise take advantage of them.
Investment fraud is an offer using false or fraudulent claims to solicit investments or loans, or providing for the purchase, use, or trade of forged or counterfeit securities.
Letters of credit frauds are often attempted against banks by providing false documentation to show that goods were shipped when, in fact, no goods or inferior goods were shipped.
This scheme—commonly referred to as a “pump and dump”—creates artificial buying pressure for a targeted security, generally a low-trading volume issuer in the over-the-counter securities market largely controlled by the fraud perpetrators.
Nigerian letter frauds combine the threat of impersonation fraud with a variation of an advance fee scheme in which a letter mailed, or e-mailed, from Nigeria offers the recipient the “opportunity” to share in a percentage of millions of dollars that the author—a self-proclaimed government official—is trying to transfer illegally out of Nigeria.
Non-delivery of merchandise is a scheme most often linked to Internet auction fraud, but also can be considered a form of business fraud in certain cases.
“Ponzi” schemes promise high financial returns or dividends not available through traditional investments. Instead of investing the funds of victims, however, the con artist pays “dividends” to initial investors using the funds of subsequent investors.
The purpose of these frauds is generally to encourage the victim to send money to a foreign bank, where it is eventually transferred to an off-shore account in the control of the con artist. From there, the victim’s money is used for the perpetrator’s personal expenses or is laundered in an effort to make it disappear.
As in Ponzi schemes, the money collected from newer victims of pyramid schemes is paid to earlier victims to provide a veneer of legitimacy. In pyramid schemes, however, the victims themselves are induced to recruit further victims through the payment of recruitment commissions.
This scheme predominately uses fraudulent financial documents—often referred to as “bills of exchange,” “promissory bonds,” “indemnity bonds,” “offset bonds,” “sight drafts,” or “comptrollers warrants”—that appear to be legitimate.
Reverse mortgage scams are engineered by unscrupulous professionals in a multitude of real estate, financial services, and related companies to steal the equity from the property of unsuspecting senior citizens or to use these seniors to unwittingly aid the fraudsters in stealing equity from a flipped property.
When you send money to people you do not know personally or give personal or financial information to unknown callers, you increase your chances of becoming a victim of telemarketing fraud. Source: FBI. Here are a few red flags to help you spot telemarketing scams. If you hear a line that sounds like this, say “no, thank you,” hang up, and file a complaint with the FTC:
- You’ve been specially selected (for this offer)
- You’ll get a free bonus if you buy our product
- You’ve won one of five valuable prizes
- You’ve won big money in a foreign lottery
- This investment is low risk and provides a higher return than you can get anywhere else
- You have to make up your mind right away
- You trust me, right?
- You don’t need to check our company with anyone
- We’ll just put the shipping and handling charges on your credit card
Free Vacations and Prizes, Phishing Scams, Loan Scams, Phony Debt Collectors, Fake Charities, Medical Alert/Scams Targeting Seniors, Warrant Threats, IRS Calls
Scammers know that finding a job can be tough. To trick people looking for honest work, scammers advertise where real employers and job placement firms do. They also make upbeat promises about your chances of employment, and virtually all of them ask you to pay them for their services before you get a job. But the promise of a job isn’t the same thing as a job. If you have to pay for the promise, it’s likely a scam.
Internet shipping scams or the package forwarding scam has been around for quite a while. Several contrasting scenarios are engaged in the execution of this scam, but it all plays out to the same conclusion. Packages are shipped to an unsuspecting accomplice and then reshipped to another address (usually untraceable) in an effort to launder products purchased online with stolen credit card numbers.
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