3 Common Fraud Schemes and How to Prevent Them

Published: 01/15/2019

Scammers and thieves are always looking for their next victim. We often think that we would never become a victim of fraud since scams are easy to spot. Unfortunately, the list of common fraud schemes is growing and the tactics used by thieves are more aggressive than ever. But, there’s good news. You can reduce the chances of you or a family member becoming someone’s next victim. Awareness is key to stopping fraudulent activity in its tracks.

Let’s look at several of the most common fraud schemes and how to avoid them.

Fake Check Scams

The Fake Check Scam has multiple variations. In each case, the scammer asks the victim to deposit a personal check, cashier’s check or money order. Since checks and money orders can take time to clear, but the money is available in your account within a few days, it could be weeks before you realize the check or money order was fake.  You are out the money they promised plus any additional money you provided as part of the scam.

Here are two common variations of this scam:

  1. A work-from-home opportunity sends you a check before you start work. The scammer asks you to help out another new employee in your area by paying your new co-worker from the same check. You’re pressured to quickly deposit the check and withdraw some of the funds and give the cash to the other new “employee.” Within a few weeks of withdrawing the funds, you are informed by your institution that this was a fake check.
  2. You meet a local seller through an online or mobile selling app. You agree to meet, and he has only a check or money order in an amount greater than the agreed upon sales price. Since he doesn’t have cash, he asks you to deposit the check or money order and send the difference back to him.

Tips for Avoiding the Fake Check Scam

  •  Avoid situations where you are asked to deposit funds and return a part of those funds to someone to complete a transaction.
  • Thieves may claim they sent you an overpayment by mistake and ask that you wire the excess funds to them immediately. Don’t fall for it.
  • Checks often look real. They might bear the name of legitimate institutions.

Lonely Hearts Scams

The Lonely Hearts or Romance Scam is one of the most profitable scams for criminals according to a 2017 FBI Internet Crime Complaint Center Report. Victim loss exceeded $211 million and shows no signs of slowing down.  Men and women, young and old, have fallen prey to this crime. It’s easy to see why. The Lonely Hearts scam usually begins online where fraudsters present a false persona to an unsuspecting victim. Dating websites and apps are fertile ground for this scam but email is also used to find victims who believe in true love.  A scammer plays on this belief and gains the confidence of the victim over the course of a few weeks or several months to convince them to wire money or provide confidential financial information. Once the information is provided, the scammer disappears.

Tips for Avoiding the Lonely Hearts Scam

  • Never give anyone access to your online financial credentials even if they say they want to give you money. They are likely trying to empty your account.
  • Never wire money to anyone you’ve never met.

Charity Scams

Legitimate charitable organizations have increased visibility during the holiday season and after natural disasters. Unfortunately, so do fake ones. They may have names that sound like well-known organizations or may even claim they are collecting money on another agency’s behalf.

Tips for Avoiding the Charity Scam

  • Do your homework. Visit Charity WatchCharity Navigator or Give.org if you are dealing with a charity you’ve never heard of. They can confirm the legitimacy of an organization.
  • Avoid donating with cash, gift cards or wire transfers. Use your credit card, which likely has protections against fraudulent activity.
  • Don’t be fooled by caller ID since scammers can mask their real location and name.

What Should You Do If You Think You’re A Victim?

Contact a Parkside Credit Union Member Representative to discuss steps to protect your account.

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