Fraud Prevention Tips for Families and Businesses

Posted by Todd Rockefeller on Tue, Nov 17, 2020 @ 02:16 PM

fraud-prevention-tipsFraud is everywhere, and if you’re not careful, your family or business could become the next victim. International Fraud Awareness Week runs from November 15 to 21, and this is a great time to make sure you know how to protect yourself.

How Fraudsters Try to Scam People

Fraudsters are always coming up with new ways to trick people, but some schemes are especially common. According to the FBI, these are some of the common scams you should watch out for:

  • Advance fee schemes involve having the victim pay a fee in hopes of getting a reward that never actually comes.
  • Charity and disaster fraud schemes take advantage of people’s good will to elicit donations that end up lining the fraudster’s pockets.
  • Credit card fraud involves the unauthorized use of credit or debit cards.
  • Identity theft involves assuming someone’s identity for the purposes of fraud.
  • Ponzi schemes involve taking money from investors, not investing it as promised, and using money from subsequent investors to pay the initial investors.
  • Pyramid schemes may look like legitimate businesses, but victims have to recruit new victims to pay fees and keep the money flowing.  
  • Business email compromise schemes target individuals at a company to trick them into making fraudulent wire transfers or other actions.
  • Ransomware infects computer systems, encrypts files and demands a ransom to have the files returned.
  • Other schemes may involve reverse mortgages, romance scams, fraudulent online sales and many more common ploys. See the FBI’s list of common scams and crimes for more information.

Avoiding Scams

If something seems to good to be true, it probably is. Fraudsters often make offers of easy money, free or cheap products or other deals that seem too good to pass up – until you realize it’s a scam. Maintaining a healthy amount of skepticism can help you avoid becoming the next victim.

  • Don’t be pressured into making an instant decision. Take time to verify information through third parties and think about the offer.
  • Be suspicious if someone asks you to make a wire transfer or pay using gift cards. Scammers often request these payment methods. Also, never deposit a check and then wire money back. The check could be fake, and once the bank finally detects this, you’ll be on the hook for the loss.
  • Educate yourself. The Association of Certified Fraud Examiners has put together resources for Fraud Awareness Week, including infographics, checklists and other materials that provide the information you need
  • Stay alert. Knowing the common ploys that scammers use can help you spot and avoid them. You can sign up for FTC fraud alerts.

Report Fraud

Reporting fraud can help authorities catch and stop fraudsters.

Consider Personal Cyber Insurance

Cyber insurance is a must-have for businesses and is also recommended for successful individuals and families. Ask us about coverage that protects against emerging concerns such as identity theft, hacking, cybercrime, cyberstalking and cyber bullying.

Tags: fraud prevention, fraud prevention tips