How to Identify Financial Scams?

Financial Scams

Financial scams occurs when someone hurts your financial health or takes your money by illegal practices, misleading or deceptive acts. Frauds do this by using several ways: investment fraud, identity theft, mass marketing fraud, lending and mortgage fraud, etc. We will cover a different variety of frauds running across the financial market. 

10 Types of Financial Scams

The following points cover some of the vital and common frauds which victimise people.

Identity Theft:

Frauds steal your vital and personal financial details such as bank account number, credit card number and proceed with fake withdrawals from your bank account. People often use this data to open bank or credit accounts, thus leaving them liable for all duties and charges. This kind of theft results in denied payments bounced checks, damaged credit rating and several other issues. 

Investment fraud:

This type of financial scams includes selling securities or investments with misleading and counterfeit data. It could be anything, including hiding facts, insider trading tips, false promises etc. 

Lending and Mortgage fraud:

The third party might initiate a loan or mortgage using false information or using your personal information. In contrast to this, lenders might sell loans or mortgages with deceptive practices, inaccurate data and other powerful sales tactics. 

Mass Marketing Fraud:

This type of financial scams is done through spam emails, mass mailing or telephone calls. Sometimes it also includes honour society invitations, charities, checks, lotteries and several others. The scammer uses these ways to withdraw personal financial data or to boost contribution to fraud organisations. 

Fake robocalls and false interest rate 

As per the FTC, another big turn in the credit card frauds comes with the fake robocalls that assure you to mitigate your credit card interest rate that too at meagre fees. These unrealistic offers are mainly scam and can not reach your credit card company to lower your interest rate. Apart from paying a reasonable fee for no service to these fake companies, they ask for personal and financial data, which they use to do identity theft. 

Debit and credit card fraud 

This type of financial fraud can happen when some persons find or steal your debit or credit card. It may also happen when a fraud firm manages to get the data from the card to buy goods, take out cash or otherwise utilise your card in any illegal activity. It is vital to understand that the Act of Fair Credit Billing restricts your liability to 50 dollars, and often there is no fixed cost. It depends on the credit card or the bank of the issuer. 

False charities 

According to the Federal Trade Commission, or in short, FTC, the method adopted by false charities is similar to the ways adopted by legit charities to raise capital. Thus, before you decide to donate money, ensure how the organisation will use the money and where it will go. 

Lottery and prize fraud 

Many names are provided to this lottery and prize frauds, including foreign lotteries, sweepstakes drawings and several others. This kind of financial fraud usually aims at the elderly and starts with a postcard or phone call. According to the Federal Trade Commission data, they receive about ten thousand complaints about lottery and price fraud every year. This number can even be more than this since many victims do not call or visit officials to reveal the fraud. 

Debt Collection fraud 

Some frauds call customers in the name of collection agencies and sometimes ask them to pay for the fake debt. They are not at all authentic debt collectors. If you really have any unpaid debt, you also have a sole right to raise questions on these collections. These rights are written in the FDCPA or Fair Debt Collection Practices Act. 

Coronavirus Scams 

The deadly pandemic Covid 19 has given a boost to many fraud activities as well. These scammers have used this as an opportunity to enter people’s lives and use both financial need and fear to their advantage. You may get a fake text, email or phone call updating you that a brand new vaccine, treatment or cure for coronavirus have arrived, and they are providing this exclusive offer to the call receiver. Also, you may receive a call claiming to be a representative of WHO (World Health Organisation) or CDC (Center for Disease Control), selling you access to special medicine, service or information. 

What to do if you get trapped in such financial Scams? 

Awareness is the only means that can prevent you from falling into such fraudulent activity. In case you lose your money with these firms, do not worry. Fast Action Refund is there to fight your corner. The financial experts of this company listen to your problems carefully and take all measures to resolve the issue and get your money back. 

Related Articles