In a world of advancing technology, there is plenty of reason for uncertainty. That’s why fraud has become a massive problem in people’s everyday lives. Fraud is defined as any activity that relies on deception in order to achieve some sort of gain, according to the Association of Certified Fraud Examiners.
According to CNBC, nearly one in three Americans say they’ve been a victim of a phone scam in the past year, and that’s only one type of fraud that people use to trick others. The act of misrepresenting the truth or concealing facts to cheat a person of their money or property is illegal, and there are many ways that people can fall victim to scams. Keep reading to learn more about common types of fraud and how you can protect yourself, your family and your sensitive information.
Common types of fraud
When you hear the word “fraud” you may think of a specific form of scam that you’re familiar with. Sadly, there are several types of fraudulent activities that happen through a variety of mediums. Here are some of the most common kinds of deception that people may use to swindle you out of your personal information or money:
Mail fraud
Mail fraud is very self-explanatory: Any scam that involves the use of postage mail. Although this may seem harmless, it’s widespread and can actually be one of the most serious types of fraud. Scammers may send a letter asking for money or personal data because printed and mailed documents seem more legitimate. This type of fraud also includes stealing someone else’s mail or using chain letters to collect money or items.
Tax scams
IRS scams generally come in the form of phone calls or emails that claim to come from the IRS. People will use threats of tax bills, audits or the promise of potential refunds to trick people into giving up personal information over the phone or through email.
Business fraud
Business fraud can be a crime committed within a company, or it can describe attacks against the business itself. The various types of business scams include:
- Payroll fraud: This financial crime occurs when someone steals money from an organization by appearing to pay someone for their labor, but pocketing the money instead.
- Financial statement fraud: When a business manipulates its financial records to make its assets seem like they are actually worth more (or sometimes less), it’s considered a financial statement scam.
- Asset misappropriation: This most common type of employee fraud happens when a worker blatantly steals money or assets from the company they work for.
- Identity theft: A company can either be the victim or the fraudster in this type of business scam. A business might steal bank information or other sensitive information from its customers, or an organization could be attacked through data fraud.
Phone and internet scams
Fraud doesn’t stop with the mail — it also reaches people through phone calls and internet usage. Although people can fall for scams at any age, it’s more common for older adults to be targeted by fraudsters, according to Comparitech. Some of these common scams include:
- Grandparent scam: Since older people are often more trusting of fraudulent attempts, swindlers will pretend to be the grandchild of the person on the receiving end of the call.
- Tech support: For older adults that only have a limited understanding of technology, scammers may pretend to be IT professionals and convince the person that they have a virus and need to pay for a new program or give remote access to their computer.
- Software scam: This fraud type looks like a warning message that appears on a computer or phone and will attempt to have you click on it. If you activate the notification, it can install malicious software that can steal your personal information.
- Lottery and sweepstakes scams: Although it can be exciting to win a sweepstakes prize, if you’re not sure about the legitimacy of the claim then it’s best to avoid interacting with the message. Scammers will often ask for money to cover processing fees or taxes.
- Robocalls: You may feel unbothered by pre-recorded robocalls, but they can still be dangerous. Generally, scammers will use this method of fraud to ask for donations or financial help.
Ransomware
Ransomware is a type of software or malware that disrupts or gives unauthorized access to your computer. Generally, attackers will steal personal information and credit card or debit card data and demand payment to unlock your computer. For businesses especially, hackers can threaten to leak or sell their data for non-payment. According to CloudAlly, the average ransom paid by organizations in 2022 is $812,360.
Fraud detection
With the many possible sorts of fraud, it may seem impossible to avoid becoming a victim of scammers. But, there are ways to recognize when you or your loved ones are being tricked.
Detecting mail fraud
Mail fraud is vast, but typically you should watch for any delivered packages or documents that seem fishy. To avoid falling for mail fraud, make sure a piece of postage is real before responding to it. Do this by verifying any phone numbers or emails on the note. Even if the document looks legitimate, it’s better to be safe than sorry. Another way to protect yourself is to bring any outgoing mail with your bank account number or your social security number attached directly to the post office.
Detecting tax, phone or internet scams
Typically, fraudsters using aliases such as those claiming to be representatives of the IRS will request things that should send off warning signals. Here are some red flags that may indicate that you’re being scammed:
- They ask for immediate action: Scammers want to make you feel scared, so they may demand that you pay them on the spot or threaten negative consequences. You should always have an opportunity to question or appeal the amount they say you owe, and if you’re not being given that opportunity, the person is most likely not who they say they are.
- They require odd payment methods: If you’re being asked to pay a fee using a prepaid debit card, gift card or wire transfer, don’t give them any information. The IRS will never require you to pay tax-related charges in any of these ways.
- They call you unexpectedly: When the IRS contacts taxpayers, they generally do so by mail before contacting people over the phone. If you haven’t received any postage from them, it’s safe to assume that you’re being scammed.
If you feel uncomfortable or weird about a phone and internet interaction, it’s probably a sign that this suspicious activity isn’t right. In those moments, it’s important to trust your gut and take extra precautions to keep yourself safe.
Fraud prevention
You don’t have to wait to get scammed to worry about preventative measures. Implement safe practices now so you can rest assured that your information will remain secure. Your bank uses fraud prevention methods like positive pay and unauthorized transaction detection to keep you safe, but there are also measures you can take further protect yourself.
Use password protection
With your phone, computer, online bank account and any other mobile or online device, use a password to lock out fraudsters. Create a strong password that hackers will not be able to easily figure out or find on social media. A password manager such as Dashlane or LastPass can provide highly secure passwords that you won’t need to remember. (Bank Midwest does not endorse 3rd party software solutions.)
Allow push alerts on your mobile banking app
Your bank will be able to quickly let you know if any transactions look suspicious and notify you immediately. This may even allow you to stop scammers after they access your account.
Keep your devices updated
Allow all of your devices and applications to update as new versions are available. Generally, upgraded operating systems come with even better security measures in place.
Watch what you click on
If a message or email looks fishy, don’t click on it. It’s best to delete it and let your bank or carrier know about the potential threat to your information.
Avoid using public computers and unsecured wifi
If you’re considering logging into any of your accounts that may contain any sensitive information on a public computer, don’t. If not removed properly, the next person that uses that device could easily access your data or steal your passwords. Only use secure, familiar devices when accessing any personal details.
You may believe that you’ll never be a victim of online fraud or other scams, but it’s always better to be extra prepared for potential fraud than to have your information or money stolen from you. If you have been hacked or scammed, it’s not too late to get help.
Steps to take when you’re a victim of fraud
No matter what form of fraud you believe you may be a victim of, immediate action is needed to protect yourself and your finances and prevent further damage from happening. If your bank information has been compromised, you should contact your financial institution and have them help you recover your data. For other scams including phone calls, emails, tax scams or business fraud, start by contacting the Federal Trade Commission (FTC) to report the incident or call the agency at 877.382.4357.
After contacting all necessary entities, follow these steps:
- Stop all contact with the scammer.
- Reset your passwords and usernames.
- Update your anti-virus software.
- Have an IT professional look at your computer to ensure no malware has been downloaded to your device.
The most important item to remember is that you don’t have to be alone if you’ve been tricked by a scammer or compromised by fraudulent activity. With modern updates in secure banking technology, you can feel comfortable knowing that you have the entire Bank Midwest team by your side.
If you’re interested in a safer mobile and online banking experience, contact us today to set up an account or speak to one of our staff members.