Fraud Awareness Week: 3 Common Types of Fraud & How to Prevent Them

November 17-23 is Fraud Awareness Week in 2024, which presents an opportunity to remind everyone that fraud continues to rise throughout the world.  It’s also a great time to discuss ways to prevent fraud and perhaps reduce the number of people who fall victim to the schemes and scams that seem to multiply daily. According to the FBI’s 2023 Internet Crime Report, over 880,000 complaints were received with potential losses exceeding $12.5 billion. The top three frauds were investment fraud, business email compromise (BEC), and tech support fraud. Please do your part by reporting any fraudulent activity, whether you became a victim or not, to www.ic3.gov. It is very important all attempts are recorded, no matter how big or small, successful or unsuccessful, as it is most impactful in the aggregate.

Let’s review the top three most common types of fraud:

Investment Fraud continues to be the costliest of all frauds due to the significant amounts being invested by individuals. These scams are designed to entice those targeted with the promise of lucrative returns on their investment. Cryptocurrency losses rose to $3.94 billion in 2023. Below are typical red flags associated with investment scams that you can be on the lookout for:

• Urgent demands for immediate action – send money NOW!!
• Offers that sound too good to be true
• Everyone is doing it, and you don’t want to miss out
• Your principal investment is guaranteed or “risk free”
• Promises of great wealth and guaranteed returns of 20% or higher
• No investment prospectus will be offered or made available
•  Unlicensed investment professionals involved

If you are approached for one of these investment opportunities, please do these four things:

• Ask lots of questions and talk to a trusted loved one about the opportunity
• Research every investment opportunity thoroughly before you invest even $1
• Contact the Tennessee Security Division at 615-741-3187 about the investment opportunity
• Conduct a background check on any investment professional at www.investor.gov

Business Email Compromise (BEC) continues to affect businesses, costing billions of dollars. This type of scam is used in conjunction with social engineering or computer intrusion techniques to conduct unauthorized transfers of funds. Historically, BEC scams have used compromised vendor emails, targeted the real estate sector, and fraudulent requests for gift cards. Help protect yourself by paying particular attention to a sender’s email address or the URL being used when receiving an email or text. Scams will use an email address or URL which looks just like the legitimate one but will differ by one letter or number. Most individuals in a work setting will not catch this. Within these emails, fraudsters will include links or texts which are malicious and should never be clicked. Always verify all requests for payments, personal and business in nature, by calling the individual or business before making such payments. If you are a business, you may want to consider scheduling a training on this topic for your employees.

Tech Support Frauds have increased by 15% and they generated almost $1 billion dollars in losses in 2023. These scams target the elderly over 40% of the time. These scams usually work by sending a pop-up notification to the unsuspecting victim telling them their computers have been infected with a malicious malware. There is a phone number on the notification which will call the scammer directly. When connected, the scammer will tell the individual they will be able to remove the malware for a fee. This will also require the scammer to gain remote access to your computer. The scammer will then try to illicit additional information from the victim to include passwords, bank account information, and other personal information. A typical situation will involve the scammer providing instructions on how to pay the fee by using an online bank account. Once processed, the scammer will tell you they owe you a refund and then instruct you to provide your bank account information for them to process the refund. Instead of giving you a refund, they will take more money - or all of your money. The scammer will then hang up. To prevent this, if a message pops up on your screen informing you of a virus, unplug your computer immediately and do not call the number on the screen. There are other things you can do to prevent becoming a victim such as:

• Do not answer calls from an unknown number. Legitimate tech companies will not contact you by phone, email, or text message without your permission.
• Never give remote access to your computer unless you initiated contact, and you have verified the company.
• Update your software regularly and run virus protection programs on a regular basis.
• If you need tech support, check the official company website for the contact information.

If you do become a victim or were a potential victim, please report all occurrences to www.ic3.gov or www.reportfraud.ftc.gov.

In addition to the fraud types mentioned above, there are so many more ways people can use to try and steal your money. Follow the tips provided and stay diligent to avoid becoming a victim. 

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