Consumer fraud remains a huge problem in the United States that, unfortunately, appears to be getting worse. The FTC received 4.8 million identity theft and fraud reports in 2020, which was up a whopping 45 percent from 2019. Consumer losses due to fraud topped $3.3 billion last year, more than double the $1.5 billion in fraud losses that was incurred in 2019, according to the FTC.

The most common type of consumer fraud is phishing attacks in which scammers impersonate legitimate organizations to try to trick consumers into providing their personal information. This is often done via emails that look like they came from the organization but really originated from thieves. There is a wide range of different kinds of email phishing schemes.

New twists on phishing include vishing and smishing, in which thieves use voice phone calls and text messages to try to steal sensitive personal information from consumers. With vishing, phony callers usually purport to be from tech support or a government agency. With smishing, text messages are sent to consumers telling them they must click on links to activate their accounts or receive a prize, for example.‍

Learn to Spot Scams‍

In my job as a fraud investigator for Firstrust, I have seen first-hand how destructive fraud can be. It is critical that consumers take steps to protect themselves from these and other types of consumer fraud.

The first step to protecting yourself is learning how to spot fraud scams. Here are a couple of real-life stories about people who unfortunately became victims of fraud:

In the first scam, a woman received an email supposedly from her bank telling her that suspicious activity was occurring on her bank account. It gave a phone number for her to supposedly call the bank to resolve the problem. When she called the number, a scammer told the woman she should move the money out of her account into a special virtual account for safekeeping.

Though she later said she was suspicious, the woman still gave the scammers the account numbers they needed to move the money out of her bank account and into the thieves’ fraudulent account.

In the second scam, a man received a call supposedly from his bank telling him that a gambling website was trying to debit funds from his bank account. The caller asked for remote access to his computer, which the man granted, and then told him to log into online banking. Once he did, the scammer could see how much money was in the man’s accounts and all of his account numbers. This was all he needed to clean out the man’s bank accounts.‍

Five Golden Rules for Fraud Prevention‍

Based on my experience and observations as a fraud investigator, I have come up with what I call the “Five Golden Rules” for avoiding fraud schemes:

1. Remember that yes, it can happen to you. It’s a common belief that fraud always happens to somebody else. But all it takes is one brief moment of letting your guard down for you to become a victim. Fraudsters are professional thieves — and many are very good at what they do. So never assume that you can’t be victimized.
   ‍
2. Follow your gut instincts. Many of the fraud victims I talk to say that something didn’t feel right but they went ahead and followed the fraudster’s instructions anyway. If you’re at all suspicious about a call, email or text, follow your instincts and hang up or delete it.
   ‍
3. Call back using a known phone number. If you feel that a call or message might be legit, find the phone number of the organization yourself and call them to verify its authenticity. A scammer will try to convince you not to do this, which should be an immediate red flag, but a legitimate organization won’t have a problem with it.
   ‍
4. Examine emails carefully. Most phishing emails contain fairly obvious signs that they’re fraudulent. One of the most common is simple misspellings and bad grammar, since many of them are created overseas. Others include slight variations in the “from” address, like additional numbers or letters, and fuzzy or fake-looking logos that have been recreated by amateurs or lifted from the legitimate company’s website.
   ‍
5. Don’t be fooled by friendly voices or intimidated by scare tactics. A common refrain of fraud victims I speak with is that the fraudster they talked to was so friendly and nice. Or conversely, the fraudster was very intimidating and they were afraid of the consequences of not complying with the demands. Again, remember that these people are professional criminals who are very experienced when it comes to separating honest people from their money.