Fraud

by | Jul 7, 2020

Fraud

Personal Info

Keeping your personal information safe online and in person is extremely important. If you aren’t careful, the wrong people may end up with it and try to pretend to be you (identity theft). They could then use your identity to break the law and you could face the consequences.

Some information about yourself should almost never be shared online unless you are absolutely sure it will go into the right hands. You should be extra careful with your credit and debit card numbers, Social Security number (SSN), ID, and your address and phone number. There are several strategies you can use to make sure you’re handling your information safely. Know who you share your information with; store and share your information securely (a "lock" on the status bar of the Internet browser means it’s safe); ask questions before sharing your information; and maintain appropriate security on your devices.

You should also use strong passwords with your devices and online accounts (especially banking accounts). The best advice is to be creative, for example, think of a special phrase and use the first letter of each word. Substitute some numbers for letters and include some capital letters. If you post too much information about yourself on social media, an identity thief could use it to pretend to be you. Consider limiting your social media accounts to only your friends (set account to be private).

Fraud

Consumer fraud occurs when an individual suffers a financial or personal loss because of deceptive or illegitimate business practices. It is important to be aware of the types of fraud so that you can protect yourself.

Identity theft is a type of consumer fraud in which someone steals your personal information, like your name, Social Security number, or banking information, in order to impersonate you. The impostor could make purchases in your name, so it is important to be careful who you share your personal information with. Credit or debit card fraud involves someone using your card information to make purchases that you did not authorize. It is important to keep track of your cards and check your statements regularly for any suspicious activity.

So, why should you care if someone tries to impersonate you through identity theft? Thieves can use your information to break the law, as mentioned above, but thieves can also use your information for other purposes, like opening credit cards, applying for loans, or draining your checking account. There are several ways for identity thieves to steal your information. They could steal your wallet or purse containing your ID and credit cards. They could also steal your mail or go through your trash to find things like financial statements, checks, and bills.

People might also try to use the Internet in order to steal your personal information. This kind of fraud is called phishing. They use emails and pop-up messages to alert you to a problem or cash refund and then trick you into giving them your personal information. Phone scams are yet another type of consumer fraud. Scammers may call you pretending to work for a company you trust and then ask you to verify your personal information. If you think a call is a scam, hang up and report it to the Federal Trade Commission.

No one is safe from consumer fraud… Nevertheless, there are certain factors and characteristics that make some people more vulnerable to fraud than others. Research has shown that there is a strong link between a person’s willingness to take a risk and the likelihood of them being the victim of fraud.

Risk takers are more vulnerable to fraud and more open to sales pitches from scammers. Older people are also more vulnerable than others to consumer fraud. Senior citizens are more likely to own their own home and have good credit, and they are also generally more trusting, which makes them a frequent target of scammers. At the same time, younger people are also more susceptible to fraud. College students and young adults are usually inexperienced when it comes to handling their finances, so they are more likely than the general population to fall victim to consumer fraud.

Ultimately, everyone is vulnerable to fraud. It is important to spot impostors, use reliable payment methods, and do your own research. The Federal Trade Commission suggests typing a company or product name into a search engine with words like “review” or “scam” to see if anyone has reported them as scams.

Victims of identity theft usually do not have to pay the bills that are accumulated when their identity is stolen, but it can take a lot of time and money to correct unauthorized purchases, a lowered credit score, and fraudulent debt. If you suspect your identity has been stolen, you should immediately report it on the Federal Trade Commission’s website, close or freeze the accounts that have been opened or tampered with, and file a police report.

So, once again, to help prevent identity theft, use passwords on all your credit cards and accounts. Never give out personal information on the phone or online unless you know and trust the receiver. Destroy and discard financial statements. Never keep passwords or your Social Security card in your wallet or purse. Always reconcile your checking account to catch any unfamiliar charges.

Trustworthy Entities

You can give out personal information to some entities, though. Trustworthy entities have a right to request certain personal financial data. For example, creditors, your landlord, and potential employers may request your personal financial information for legitimate purposes. It is important to know when to provide your personal information and when not to.

When you apply for a credit card, your financial institution will ask you to provide personal information such as your date of birth, SSN, and income. They need this information in order to check your credit score and verify your identity. Financial institutions have firewalls to protect your information and automated systems to detect fraud. They will never call or email you asking for your SSN or account number, so never give out personal information through these methods unless you place the call.

Your landlord may also request personal information such as your SSN before renting to you. This is so that she can check your credit and make sure you will be able to pay your rent. To protect your SSN, you can request that your landlord destroy your application with your personal information after it is reviewed. Your employer will also ask you to provide your SSN for payroll and tax purposes. Under the Fair and Accurate Credit Transactions Act and the Fair Credit Reporting Act, employers may be responsible if their actions lead to identity theft.

Scammers may call you pretending to be your financial institution or to work for the government and ask you to verify your personal information. Remember, financial institutions and government agencies will never call you to ask for your personal information. Only ever verify your information if you were the one that placed the call.

Unfair Practices

The term unfair business practices refers to the use of deceptive, unethical, or fraudulent methods to obtain business. Examples of unfair business practices include false advertising, deceptive pricing, and misrepresentation. A practice is unfair if it is likely to cause injury to consumers, it cannot be avoided by consumers, and it is not outweighed by the benefits to consumers. Unfair advertising is false advertising that misrepresents a product, service, or price. These advertisements may have incorrect pricing, fake endorsements, false statements, or exaggerated performance descriptions.

The Federal Trade Commission‘s Bureau of Consumer Protection protects consumers against unfair business practices by collecting complaints and conducting investigations, suing companies and people that break the law, developing rules to maintain a fair marketplace, and educating consumers and businesses about their rights.

The Federal Trade Commission encourages consumers to file a complaint online or by phone whenever they have been the victim of unfair or deceptive business practices. The FTC will then investigate the complaint and take action when needed.

Consumer Agencies

There are six government regulatory agencies that provide protections to consumers like you. One which we have seen before is the Federal Trade Commission (FTC), an agency of the United States government that protects consumers by working to prevent fraudulent, deceptive, and unfair business practices.

Some other ones are the Consumer Financial Protection Bureau (CFPB), which ensures that consumers have the information needed to select the best financial services, and the Consumer Product Safety Commission (CPSC), which protects people from unsafe consumer products. You’ve probably also heard of the Food and Drug Administration (FDA), which is responsible for protecting consumers’ health by monitoring food, drugs, medical devices, and cosmetics.

The National Highway Traffic Safety Administration (NHTSA) is another agency that protects consumers by reducing injuries and monetary losses from vehicle accidents. Last, the Securities and Exchange Commission (SEC) protects investors against fraudulent and manipulative practices in the market.

In addition to these federal agencies, each state also has its own consumer protection agency – double protection! These agencies educate consumers about their rights, enforce consumer protection laws, accept and investigate consumer complaints, and license and regulate companies that provide consumer goods and services.

Consumer Laws

Consumer protection laws are laws at the federal or state level that protect everyday consumers against deceptive business practices, debt collection, credit reports, privacy, and defective products.

The Federal Food, Drug, and Cosmetic Act protects consumers by ensuring that food, drugs, medical devices, and cosmetics manufactured and sold in the United States meet certain quality standards. The Fair Credit Billing Act is a federal law that protects consumers from unfair credit billing practices. It gives consumers the right to dispute credit card charges. The Truth in Lending Act also protects consumers against unfair credit billing and credit card practices. It is a federal law that requires lenders to provide consumers with loan cost information so that they can comparison shop different interest rates and conditions.

There are also state laws that protect consumers. For example, many states have adopted the Uniform Deceptive Trade Practices Act, which outlaws unfair or fraudulent business practices as well as untrue or misleading advertising.

Complaint Procedures

If you have a problem with a good or service you purchased, you have the right to complain! To file a complaint against a company, first gather any paperwork you have related to the purchase, such as sales receipts, warranties, contracts, or work orders. Next, you should contact the seller in writing: get in touch with a salesperson or customer service representative. If they don’t resolve your complaint, ask to be put in touch with a supervisor, manager, or the company’s corporate headquarters. If you still can’t solve your issue by contacting the seller, file a complaint with your state consumer protection office. In your complaint, include the documentation you collected from step one. The consumer protection office will work with you and the business to resolve your dispute.

You can also contact your state consumer protection office to find a dispute resolution program to solve disagreements between buyers and sellers without going to court. Mediation and arbitration are two types of dispute resolution. In mediation, both sides meet with a mediator, to create their own agreement jointly. In arbitration, the third party, an arbitrator, decides how to settle the problem.

If no other options work, you may be able to resolve your problem through the legal system. Small claims courts are a legal court of law designed to quickly resolve disputes that involve relatively small amounts of money. Small claims courts can help resolve consumer disputes such as breach of warranty, defective products, and undelivered goods. In small claims courts, the claims must be less than $10,000. If your claim exceeds the limit, you will have to file your case in a different court. Small claims courts are informal, and attorneys are usually not allowed. Small claims courts are much cheaper and quicker than a superior court, but it’s still a good idea to contact the customer service department and try to resolve the dispute on your own before filing a complaint.

Insurance Fraud

Insurance fraud is an illegal act by either the buyer or the seller of an insurance contract. This can occur when the buyer files a claim and tries to get a benefit they are not entitled to, or when the insurance company knowingly denies a benefit that is due. This one’s an interesting one because most insurance fraud is committed by buyers. For example, someone with auto insurance may get rid of a vehicle and then claim that it was stolen in order to receive money or a replacement vehicle.

While most insurance fraud is committed by buyers, sellers can also commit fraud. For example, a seller could sell someone an insurance policy from a company that doesn’t exist. The seller could then collect premium payments but not pay if the buyer submits a claim.

Buyer fraud can be divided into two categories: Soft Fraud and Hard Fraud. Soft Fraud is when a person exaggerates a real claim, such as overstating the damages to their car caused by a car accident. Soft Fraud is a misdemeanor, punishable by fines, jail time, probation, or community service.

Hard Fraud occurs when someone intentionally causes or invents a loss for the purpose of collecting insurance payments. Hard Fraud is usually considered a felony and is punishable by jail time.

Insurance Agencies

In the United States, each state has a Department of Insurance or a similar agency that is in charge of regulating insurance companies within that state. Insurance regulation has several parts, including company licensing, producer licensing, and financial regulation. State laws require that insurance companies are licensed before selling insurance. The Department of Insurance in each state oversees company licensing to ensure that citizens are working with trustworthy, adequate insurance.

Insurance agents must also be licensed before they can sell insurance. In most states, in order to get licenses, insurance agents must pass a background check, take a class, and pass an exam before they are licensed to sell insurance. The Department of Insurance also provides continuing education for licensed insurance agents to make sure they continue to meet the standards for selling insurance.

The Department of Insurance is also in charge of product regulation. This means that the state ensures that the insurance policies being sold are legal and fair to protect the customers.

Financial regulation provides protection for insurance policyholders. The Department of Insurance makes sure that insurance companies are in good financial standing and will be able to pay out claims to policyholders. It would be catastrophic if an insurance company went bankrupt during hurricane season, and the state prevents this from happening.

TL;DR

In short, when it comes to fraud, you can never be too careful. The essentials are to make sure you know who you are talking to before giving out any personal information, and to research everything before you commit. Follow those two principles, and you’ll stay out of the shark-infested waters.

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