April 20, 2023

What are some 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 fraud and scams. Learn what to watch for and what steps to take to keep yourself, your loved ones, and your money safe.

Charity scams

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 address and phone number. Look up the charity through their website or a trusted third-party source to confirm that the charity is real. 

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 paid.

What to do: Don’t provide any personal financial information until you can verify the debt.

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.

Imposter scams

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 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. 

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 job or social media posts that promise easy money for little effort. They may also agree 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 for people you either don’t know or haven’t met. Also, be aware of jobs that promise easy money.

Money transfer or mobile payment services fraud

Con artists use money transfers to steal people’s money. If someone you don’t know asks you to send money to them, it should be a red flag. Scammers also use mobile payment services to trick people into sending money or merchandise without holding up their end of the deal. For example, a scammer may sell you concert or sports tickets but then never actually give them to you. Or a scammer might purchase an item from you, appear to send a payment, and then cancel it before it reaches your bank account.

Using mobile payment services with family, friends, and others you know and trust is the safest way to protect your money. You should also be cautious when people you do know ask you to send them money. Before you send money, verify that they are the ones requesting it.

What to do: Never send money to someone you don’t know.

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 pay 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 cards or Social Security numbers, to anyone you don’t know. Also, never make an upfront payment for a promised prize, especially if they demand immediate payment. 

Common payment methods used by scammers

Never send money to someone you don’t know. Scammers use a variety of ways to collect money from you, including:

• Wire transfers
• Person-to-person payment services and mobile payment apps
• Gift cards