Understanding Common Fraud Schemes and Identity Theft Prevention

What is Fraud?

To define fraud in simple terms: it’s a crime that involves the act of deceiving someone to steal money or valuable information. It often includes identity theft, scams, or other fraudulent schemes. It's important to understand that fraud can take many forms, from scammers posing as friends or romantic partners to criminals impersonating charities or officials. 

1. Romance Scam

   The Scheme: You befriend someone overseas and they quickly become your fiancé or significant other after a days of talking. They claim to be a military member, prince, rich widow, or have other impressive stories. They would love to meet you, but can’t because of travel restrictions. To help them visit, they ask you to send money for a lawyer or plane ticket.
   The Reality: The amount of money they request will slowly increase until you have no more. The requests are always urgent, and they often tell you not to inform your bank or family. Once you run out of money, they disappear.
   The Prevention: Be cautious when meeting potential partners online. If the relationship escalated too quickly, it’s likely a scam. Never send money to someone you haven’t met in person. If you suspect a fraud, report it to the dating platform you're using.

2. Friendship Scam

   The Scheme: Someone online befriends you and, after a few exchanges, asks for help with a serious problem. A message might be that their child needs surgery, but the hospital requires upfront cash, and they claim the child will die without your assistance.
   The Reality: The surgery costs will rise, but the cure will never happen. The scammer isn’t really a friend, and they don’t have a sick child.
   The Prevention: Never send money to someone you haven’t met in person. If you suspect fraudulent activity, report them to the website and block further contact.

3. Social Media Scam

   The Scheme: A familiar friend on social media reaches out for help. They take advantage of the close friendship you two have built. You’ve known them for years, so you feel inclined to help them out and send money.
   The Reality: Your friend's account was hacked, and you sent money to someone committing identity theft.
   The Prevention: Before sending money to a friend, call or speak to them in person. If you know them well enough to send money, you know them well enough to call first.

4. Grandparent Scam

   The Scheme: Your grandchild contacts you urgently, saying they are in trouble—either in jail, in the hospital, or in immediate trouble. They beg you not to tell their parents and ask you to send money, often to a foreign country.
   The Reality: This is likely a scam, and you will end up sending money to a stranger. Your loved ones are not in danger.
   The Prevention: Always verify the story by contacting your grandchild or their parents. In most cases, your grandchild is perfectly safe.

5. Prince or Government Official Scam

   The Scheme: Someone claims to be a wealthy prince or official who needs help moving millions of dollars out of their country. They ask you to send money or provide your bank account, promising you a share of their fortune.
   The Reality: The requests for bribes, wires, and attorney fees will never stop. If it sounds too good to be true, it always is.
   The Prevention: Block the email and report it to your email provider.
   
   

6. Lottery or Sweepstakes Scam

   The Scheme: A scammer calls you and explains you’ve won a lottery (often from another country). All you need to do is pay the taxes or customs fees and the money is yours!
   The Reality: This is a scam. Your fees will continue till you have borrowed money and the non-existent lottery funds from the non-existent lottery will still be stuck in the other country.
   The Prevention: If you didn’t enter a lottery, you didn’t win. Block the sender and report the scam.

7. Customs Clearance/Advance Fee Fraud

   The Scheme: Someone you met needs help getting valuable items or cash through customs. You receive an official-looking email from "Customs" asking for a fee to release the goods.
   The Reality: The email is fake, full of spelling and grammatical errors, and the fees will keep increasing.
   The Prevention: Block the email and report it as phishing.

8. Internet Sale Scam

   The Scheme: You list a car for sale online. A buyer sends a cashier's check for $15,000, but your car’s price is $10,000. They ask you to deposit the check and send them the extra $5,000.
   The Reality: After you ship the car and send the money, the check bounces. You lose the car and $5,000.
   The Prevention: If someone asks you to send money as part of a sale, it’s a scam. Report them to the platform and destroy the check.

9. Online Loan Fraud

   The Scheme: You apply for a loan online because of poor credit. The lender sends you a check, but asks for a "good faith" payment upfront to show you’ll repay the loan.
   The Reality: The check bounces, and you’re out the "good faith" money. They may also steal your identity by gaining access to your account details.
   The Prevention: Instead of seeking loans online, consult your banker for legitimate options.

10. Remote Job Scam

    The Scheme: You find a job as an assistant for an overseas business. You need to open a bank account to receive and distribute funds.
    The Reality: You receive stolen money for your “paycheck”, and now you are a part of this crime.
    The Prevention: Research the company and contact them to verify the legitimacy of the job. If it sounds too good to be true, it probably is. If it does seem like a real company, contact them to make sure the employee and job opportunity actually exists.