The 4 Most Common Types of Consumer Fraud

Consumer fraud may happen with each of us. Even those consumers who have the experience to purchase and sale in some type of market lay under a certain percentage of risk to fall victim to a fraud.

Federal trade commission states that annually consumers lose more than $350 million in total because of fraud. This often happens with those who try to illegally save money on their income taxes and purchase a new social security number or salary statement. Actually, this is the consumer’s guilt of fraud.

Today there are several main environments of fraud: the internet, telephone or email or in person as well. The development of IT gave a rise to the fraud numbers in the virtual market.

Defining the consumer fraud

”The defrauding of a consumer of various products and services which do not perform as advertised, or overcharging and levying hidden charges through deceptive business practices.” 

There are many types of online consumer fraud. We provide 4 widely spread ones for you to take into account while dealing with the online companies.

Shopping online

The world is divided into two markets: physical and online. Millions of people find the online shopping easier and more convenient. Now the risk to get duped while shopping online has increased. Even if you see a website of “high quality” try to thoroughly check and find data about it before making your purchase. It is better to shop in the online markets which are known to the majority of people and gained trust among them.

Loan fraud

 All of us need money. Very often we take loans or mortgage from the banks to buy something or pay for something. While searching for online money support, don’t provide your credit/debit card information, or any other personal data to an unknown source. Double check both the website and information about it. In fact, if the offer seems too good to be true, close it!

Employment fraud

Many people try to find jobs through the internet. Of course, the source provides great opportunities, but be aware, that you can come across to scams. According to FTC survey, the main job offers which you should consider thoroughly before applying refer to works in the government. In such case, the consumer may be asked to pass a test to get the vacancy. The test may cost some money or even your whole banking account. So, think more than twice while applying for a job online.

Stolen identity

Not only in the USA but in all around the world, the identity theft is widely spread. An offender will take your personal data from your trash or online account and use against you. When you get a notification of a service, loan, or a welfare refund with your personal data which you didn’t authorize, it means that you face a consumer fraud. To avoid this, you should be maximum attentive to hide and not put the data on display.

We advise!

Before purchasing or transferring money to a company, take the following steps to avoid the scam:

  • Google the name of the company. Write “review”, “complaint”, “scam” as a keyword for your search. You can even provide phone numbers to see whether there are other complaints referring the company or not.
  • Say NO to upfront payments. Even if they say you won a prize and you just need to pay taxes, don’t submit!
  • Consider before choosing money transfer service. Credit cards are less fragile to scams, while such services as the Western Union or MoneyGram have much risk not to get money back. If the company offers to pay via this kind of services, don’t hurry to do that…
  • Free trial offers are very attractive, aren’t they? But even if there are many sites providing a reliable free trial,  nevertheless this is one of the most vulnerable services online. Before taking the trial read about the company and the terms of cancellation.
  • Always review your bank account statement to see whether you have unrecognized charges or not. There are companies who don’t even let you know about the trial expires and charge your account monthly.
  • Even after following the steps you come across with fraud, you can apply for support to a lawyer who protects consumer rights.

As a consumer, we all may face problems within the scope of the fraud. We just should be more attentive and informed before making any online purchase or sale procedure.



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