Common types of scams
Scammers are constantly finding new ways to steal your money. You can protect yourself by knowing what to look out for. Here are some of the most common types of frauds and scams. Learn what to watch for and what steps to take to keep yourself, your loved ones, and your money safe.
A charity scam is when a thief poses as a real charity or makes up the name of a charity that sounds real in order to get money from you. These kinds of scams often increase during the holiday season as well as around natural disasters and emergencies, such as storms, wildfires, or earthquakes. Be careful when any charity calls to ask for donations, especially ones that suggest they’re following up on a donation pledge you don’t remember making.
What to do: Ask for detailed information about the charity, including the address and phone number. Look up the charity through their website or a trusted third-party source to confirm that the charity is real. Learn more about how to avoid a charity scam.
Debt collection scams
Most debt collectors will contact you to collect on legitimate debts you owe. But there are scammers who pose as debt collectors to get you to pay for debts you don’t owe or ones you’ve already been paid.
In most cases, a legitimate debt collector will provide you with information about the debt during or shortly after the first communication. This information may arrive as a letter often called the “validation notice.” If you don’t receive this information, you can ask for it. If you do receive this information and don’t recognize the debt or have questions, you can dispute the debt. And if a debt collector won’t send you information about the debt, that might be a sign you are dealing with a scammer.
What to do: Don’t provide any personal financial information until you can verify the debt. You can use this sample letter to request more information. Read more about the warning signs.
Debt collection scams that target survivors
After someone dies, scammers may check obituaries or other legal notices and contact the deceased’s relatives, posing as a debt collectors. If you receive such a contact, the scammers are trying to get your personal or financial information in order to steal your money, or commit identity theft or other types of fraud.
What to do: First, it’s important to know that, in general, no one is obligated to pay someone else’s debt after they die, unless it’s a shared debt or required under state law. When someone dies with unpaid debt, it’s generally paid with money or property left in the estate.
If you are the spouse of a person who died, debt collectors can mention the debt to you, and you have the right to learn more about it. But this doesn’t necessarily mean that you’re personally responsible for paying it.
As with other scams, always avoid giving anyone your Social Security number, birth date, or financial account numbers, unless you know who you’re dealing with. Learn more about what happens to debt after someone dies.
Debt settlement and debt relief scams
Debt settlement or relief companies often promise to renegotiate, settle, or in some way change the terms of a person’s debt to a creditor or debt collector. Dealing with debt settlement companies, though, can be risky and could leave you even further in debt.
What to do: Avoid doing business with any company that guarantees they can settle your debts, especially those that charge up-front fees before performing any services. Instead, you can work with a free or nonprofit credit counseling program that can help you work with your creditors. Learn more about the risks of working with a debt settlement or relief company.
Foreclosure relief or mortgage loan modification scams
Foreclosure relief or mortgage loan modification scams are schemes to take your money or your house, often by making a false promise of saving you from foreclosure. Scammers may ask you to pay upfront fees for their service, guarantee a loan modification, sign over the title of your property, or sign paperwork you don’t understand.
What to do: If you are having trouble making payments on your mortgage, a HUD-approved housing counselor can help you assess your options and avoid scams. If you think you may have been a victim of a foreclosure relief scam, you may also want to consult an attorney. Read more about foreclosure relief scams.
If you get a call from someone who sounds like a grandchild or relative asking you to wire or transfer money or send gift cards to help them out of trouble, it could be a scam.
What to do: Read more about other ways to protect older adults from fraud and financial exploitation.
Imposter scammers try to convince you to send money by pretending to be someone you know or trust like a sheriff, local, state, or federal government employee, or a charity organization.
What to do: Remember, caller ID can be faked. You can always call the organization or government agency and ask if the person works for them before giving any money. Read more about imposter scams.
Lottery or prize scams
In a lottery or prize scam, the scammers may call or email to tell you that you’ve won a prize through a lottery or sweepstakes and then ask you to make an upfront payment for fees and taxes. In some cases, they may claim to be from a federal government agency.
What to do: Avoid providing any personal or financial information, including credit card or Social Security numbers, to anyone you don’t know. Also, never make an upfront payment for a promised prize, especially if you are required to make an immediate payment. Learn more about lottery or prize scam red flags.
Mail fraud letters look real but the promises are fake. A common warning sign is a letter asking you to send money or personal information now in order to receive something of value later. Examples of mail fraud might include notices of prizes, sweepstakes winnings, vacations, and other offers to claim valuable items.
What to do: The USPS has identified common postal or mail fraud schemes. If you’re a victim of mail fraud, you can file a complaint through the U.S. Postal Inspection Service .
Money mule scams
A money mule is someone who receives and moves money that came from victims of fraud. While some money mules know they’re assisting with criminal activity, others are unaware that their actions are helping fraudsters.
Money mules may be recruited through online jobs or social media posts that promise easy money for little effort. They may also be asked to help a love interest, who they’ve met online or over the phone, by sending or receiving money, as part of a romance scam.
What to do: Don’t agree to receive or send money or packages to people you either don’t know or haven’t met. Also, be aware of jobs that promise easy money. Learn more the red flags and what to do if you’re a victim of a money mule scam.
Mortgage closing scams
Mortgage closing scams target homebuyers who are nearing the closing date on their mortgage loan. The scammer attempts to steal the homebuyer’s closing funds—for example, their down payment and closing costs—by sending the homebuyer an email posing as the homebuyer’s real estate agent or settlement agent (title company, escrow officer, or attorney).
What to do: These schemes are often complex and appear as legitimate conversations with your real estate or settlement agent. When you’re about to close on your home, take several steps, including identifying trusted individuals to confirm the process and payment instructions and writing down their names and contact information so you can reach out to them directly. Learn more about what steps you should take to help protect your closing funds.
A romance scam is when a new love interest tricks you into falling for them when they really just want your money. Romance scams start in a few different ways, usually online. Scammers may also spend time getting to know you and developing trust before asking you for a loan or for access to your finances.
What to do: Be smart about who you connect with and what information you share online. Don’t share sensitive personal information, such as bank account or credit card numbers or a Social Security number, with a new love connection. Learn more about how to avoid romance scams.
Wire or money transfer fraud
Scammers use money wire transfers to steal your money. One example of a wire transfer fraud is the “grandparent scam,” where a scammer poses as a grandchild or a friend of a grandchild and says they’re in a foreign country and need help. Once a money transfer is picked up, there is very little you can do to get your money back.
What to do: Never transfer money without making sure that the person you’re trying to help really needs your help and is who they say they are. You can do this by reaching out to the person yourself, using the contact information you have for them. If you made a money transfer to a scammer, contact the bank or company immediately and ask if it can be reversed. Learn more about wire transfer scams.
Reporting fraud and scam
If you’re a victim of a scam, you can report it to the authorities by:
- Submitting a complaint online with the Federal Trade Commission
- Contacting your local police or sheriff’s office
- Reporting it to your state attorney general
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