What Do I Do If I'm a Victim of Fraud?

In 2022, American consumers lost nearly $9 billion to fraud. Unscrupulous individuals use scams, investment schemes, bogus job offers and other tactics to part hardworking people from their money.

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Some types of fraud, such as identity theft, can affect you for years, so it's important to know what to do after someone defrauds you.

What Is the Legal Definition of Fraud?

In legal terms, fraud is the use of deception to achieve personal gain. For example, someone may lie to you about a job opportunity to convince you to pay a finder's fee. Once they have your money, they disappear.

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What Are the Different Types of Fraud?

Scammers use many deceptive tactics to convince you to give up money or other assets. These are some of the most common:

Charity Fraud

Some fraudsters enrich themselves by collecting donations for charities that don't exist. It's common to receive email or telephone solicitations soon after a natural disaster or other tragedy.

Elder Fraud

Family members, paid caregivers and unscrupulous strangers may target older adults with their schemes. For example, dishonest contractors may bill seniors thousands of dollars for work they never completed.

Romance Scams

In this type of scam, someone sets up fake social media profiles and uses them to connect with potential victims. Over several weeks or months, the scammer works to gain each victim's trust. The goal is to convince at least one person to send money, gift cards or other items of value.

Holiday Scams

During the holiday season, scammers may set up fake websites to lure online shoppers into buying nonexistent merchandise. Beware of sites charging suspiciously low prices for popular items. For example, if a website advertises a $600 set of building blocks for $20, it's probably too good to be true.

Investment Schemes

Ponzi schemes, bait-and-switch schemes and churning are just a few examples of investment-related fraud. In a Ponzi scheme, the scammer promises huge returns, making it easier to trick people into investing large sums of money. A bait-and-switch scheme involves advertising one product and then trying to talk the victim into investing in something else. Churning is when a stockbroker or other financial professional makes more trades than necessary to increase their commissions.

Money Mules

A money mule is someone who launders money on behalf of another person. In many cases, mules don't know that they're involved in a criminal enterprise. This is because scammers trick them into cashing checks or making cryptocurrency transactions for seemingly innocent reasons.

Spoofing

Spoofing is when a scammer disguises themselves as a trusted contact. For example, if your boss uses boss@company.com to communicate with employees, there's a chance a scammer could spoof the address by changing it to boss@c0mpany.com. These addresses look the same, but if you look closely, you'll notice that the second version has a zero instead of a letter. If you don't notice the difference, you may send confidential information to a scammer, putting your company at risk.

Phishing

Scammers use phishing to trick you into revealing personal information. One common tactic is to tell you via email that someone has been making unauthorized charges on your credit card. If you click the link in the email, you'll see a page that looks exactly like your bank's website. Unless you realize it's a fake, you may end up sharing your Social Security number, credit card number or contact information with a scammer.

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How and to Whom Do You Report Fraud?

If you're a fraud victim, the first thing you should do is contact your local police department. Once you file a report with local authorities, you can report the fraud to the Federal Trade Commission. The FTC will give you a list of next steps based on the type of fraud you encountered.

What Should You Do If You're a Victim of Fraud?

Filing a report isn't the only thing you should do if you're a victim of fraud. It's helpful to contact your state's consumer protection office. The agency may investigate your complaint or advise you to seek legal counsel. If you're an older adult, it's also worth contacting the elder protection agency in your county. Even if they can't get your money back, employees can spread the word about the scam, ensuring others don't fall victim to the same scammer.

If you shared your Social Security number or any other financial information, visit IdentityTheft.gov. Once you fill out the complaint form, the website will use the information you provided to create a personalized action plan. For example, the FTC may advise you to freeze your credit with the three major credit bureaus.