Common Scams and Frauds

Find information on common scams and frauds that can happen to you.

Telephone Scams

Every year, thousands of people lose their money and personal information to telephone scams. Typically, phone scammers will try to sell you something you hadn't planned to buy and will pressure you to give up personal information, like your credit card details or Social Security number.

Common Phone Scams

In telemarketing fraud, phone scammers will often use exaggerated—or even fake—prizes, products, and services as bait. Some may call you, but others will use mail, text, or ads to get you to call them for more details. Types of phone scams include:

  • Travel packages - "Free" or "low-cost" vacations can end up costing a fortune in hidden costs. 
  • Credit and loans - Popular schemes include advance fee loans, payday loans, and credit card loss protection
  • Fake business and investment opportunities - As business and investing can be complicated, scammers take advantage of people not researching the investment. 
  • Charitable causes - Many phone scams involve urgent requests for recent disaster relief efforts.

National Do Not Call List

Avoid phone scams by registering your home and cell phone numbers with the National Do Not Call Registry or by calling 1-888-382-1222. This national registry was created to offer consumers a choice regarding telemarketing calls. Most legitimate companies don't call if your number is on the registry. If a company is ignoring the registry, there’s a good chance that it’s a scam. If you get these calls, hang up.

Report Telephone Fraud

If you believe you have been a victim of a telephone scam or telemarketing fraud, you can file an online complaint with the Federal Trade Commission (FTC), or by phone at 1-877-382-4357.

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Financial Fraud

Scam artists use different types of fraud to try to trick people out of their money. Two common types of fraud are banking scams and investment scams.

Banking Scams

Popular banking scams include:

  • Fake check scams, where a scam artist creates counterfeit checks that look legitimate, with watermarks, routing numbers, and the names of real financial institutions. They then try to deposit them in banks, use them as part of other frauds against consumers, or use them to pay companies for products or services. 
  • Unsolicited check fraud, where a scammer may send you a check that you didn't have a legitimate reason to receive. Unfortunately, if you cash it, you may be authorizing the purchase of items you didn't ask for, signing up for a loan, or something else you didn't ask for. The Federal Trade Commission offers tips to help you avoid being a victim of these scams, and recommends what to do if you have been a victim.
  • Automatic withdrawals. A company sets up automatic withdrawals from your account that you didn’t approve.
  • Phishing. Email messages that ask you to verify your bank account number or debit card PIN. By clicking on the link or replying to the email with your account number, you are giving a scammer access to your financial accounts. 

Investment Scams

Investment scams prey on your hope to earn interest or a return on investment on the amount of money that you invest. The Securities and Exchange Commission (SEC) offers overviews of many common investment frauds, and tips to avoid being a victim.

If you are the victim of an investment fraud, you can file a complaint with the SEC or with your state's securities administrator.

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IRS Imposter Scams

You may get a call from someone pretending to be from the IRS who claims you owe taxes. This caller will typically demand immediate payment and threaten you with arrest or lawsuits for not paying. Individuals carrying out this fraud will also make the caller ID appear as if the IRS is calling. Learn the signs to watch out for and how to report IRS imposter scams.

Signs of an IRS Imposter Scam

The IRS will always contact you by mail before calling you about unpaid taxes and will never: 

  • Demand immediate payment
  • Ask for a specific payment method, such as a prepaid debit card, gift card, or wire transfer
  • Threaten you with arrest or deportation for not paying your taxes
  • Request personal or financial information by email, texting, or any social media

Report an IRS Imposter Scam

Follow these steps if you get a call from someone claiming to be from the IRS asking for a payment and have not first been contacted by the IRS by mail:

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Watch Out for IRS Imposter Scams

Know the signs of IRS imposter phone calls.

0:00 Scam artists are pretending to be IRS officials

0:03 to get your money.

0:04 They'll call, email, or text you claiming you owe back taxes

0:08 or there's a problem with your tax return.

0:10 They even rig caller ID to make their call look official.

0:14 They play on your fears.

0:16 They threatened to take your driver's license

0:18 or sue, arrest, or deport you.

0:21 They want you to pay, fast.

0:23 What's the truth?

0:25 The truth is the IRS's first contact

0:27 with you will always be a letter in the mail.

0:29 It's not a phone call, email, or text message.

0:32 They won't insist that you pay with a prepaid debit

0:34 card, a wire transfers, or cashier's check.

0:38 Now you know.

0:41 Has an IRS impostor contacted you?

0:43 Report it at

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Charity Scams

Some scammers set up fake organizations, taking advantage of the public’s generosity, especially after a tragedy or disaster. Follow these tips to help you detect common charity scam tactics:

  • Check out the charity with the attorney general or the Better Business Bureau before you give.
  • Don’t give in to high pressure tactics such as urging you to donate immediately.
  • Don’t assume that you can get a tax deduction for donating to an organization. Use the IRS’s database of 501(c)3 organizations to find out if it has this status.
  • Verify the name. Fake charities often choose names that are similar to well established charities or use keywords that elicit sympathy, such as “children”, “cancer”, or “disaster relief”.
  • Don’t send cash. Pay with a check or credit card.

If you suspect charity fraud, report it to the Federal Trade Commission. Although the Do Not Call Registry doesn’t apply to charities, you can ask an organization not to contact you again.

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Ticket Scams

Tickets for popular concerts, plays, and sporting events can be expensive and sell out quickly. There are many other ticket selling scams, that charge at prices much higher than the face value. Some scammers sell counterfeit tickets, with forged barcodes and logos of real ticket companies. Others sell duplicates of legitimate tickets to multiple buyers, often as electronic tickets that they e-mail. 

 Before you buy tickets from a third party seller:

  • Try to buy from authorized brokers and third party sellers that can guarantee the validity of the ticket.
  • Be especially careful of buying event tickets from online classified ads.
  • Be wary of the online search results. The first ones may be paid ads that charges excessive fees, rather than a reputable seller. 
  • Check the actual web address for the resale website; some scammers create phony websites that closely resemble authentic ticket websites. 
  • Research the seller's name, e-mail address, and phone number, along with the words "fraud," "scams," and "fake tickets" to see if there are negative reviews. 
  • Find out if the seller guarantees the ticket.
  • Get contact information for the seller, in case there is a problem with the ticket.
  • Verify the section and seat number actually exists.
  • Use a credit card to pay third party sellers. You can dispute the ticket purchase with your credit card company if there are problems.
  • Check the date, time, and location printed on the ticket to make sure they match the date of the event.

Report ticket related scams to your state consumer protection office.

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Lottery and Sweepstakes Scams

Not all lotteries and sweepstakes are legitimate. Before you participate, keep these tips in mind:

  • Scam artists often use the promise of a valuable prize or award to entice consumers to send money, buy overpriced products or services, or contribute to bogus charities.
  • Legitimate sweepstakes don't require you to pay to collect your winnings.
  • Scam operators use the telephone and direct mail to entice U.S. consumers to buy chances in foreign lotteries. These lottery solicitations violate U.S. law, which prohibits the cross-border sale or purchase of lottery tickets by phone or mail.

Read these tips from the Federal Trade Commission for more information about bogus lotteries and sweepstakes.

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Pyramid Schemes

A pyramid scheme, also known as Ponzi scheme, is an illegal form of multilevel marketing. In these scams, your ability to earn profits is based on the number of new participants you recruit, instead of the amount of products or services you sell. Sometimes there actually aren't any real products that are being sold. These types of schemes are common with investment and independent direct selling opportunities.

These schemes rely on the income from new participants in order to pay fake "profits" to people that have been part of the scheme for longer amounts of time. However, the scheme falls apart when there aren't enough new recruits to pay into the system, so the earlier participants no longer receive earnings.

Tips to Avoid Being a Victim

Take steps to protect yourself from being a victim of a pyramid scheme:

  • Be wary of "opportunities" to invest your money in franchises or investments that require you to bring in more investors to increase your profit, or recoup your initial investment.
  • Be wary if the company sells non-tangible products or technical services, rather than physical items. 
  • Independently verify the legitimacy of any franchise or investment with the Better Business Bureau, your state Attorney General, or any licensing agencies.
  • Be skeptical of success stories and testimonials of fantastic earnings.

File a Complaint

If you are aware of a pyramid scheme or have been the victim of one, file a complaint with your state consumer protection office, state Attorney General, or the Better Business Bureau (BBB). If the pyramid scheme involved securities, you should also file a complaint with your state's securities administrator, or the Securities and Exchange Commission.

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Tax-Related Identity Theft

Tax-related identity theft occurs when someone uses your stolen Social Security Number (SSN) to get a tax refund or a job. These tips can help you prevent and report tax identity theft:

Warning Signs 

To prevent tax identity theft, be wary of any Internal Revenue Service (IRS) letter or notice that states:

  • More than one tax return was filed using your SSN
  • You owe additional tax, you have had a tax refund offset, or you have had collection actions taken against you for a year you did not file a tax return.
  • IRS records indicate you received wages from an employer unknown to you

The IRS does not initiate contact with a taxpayer by sending an email, text, or social message requesting personal or financial information.

Dealing with Tax-Related Identity Theft

If you suspect someone used your Social Security Number (SSN) for a tax refund or a job—or the IRS sends you a letter or notice indicating a problem—take these steps: 

  • File a report with the Federal Trade Commission (FTC). You can also call the FTC Identity Theft Hotline at 1-877-438-4338 or TTY 1-866-653-4261.
  • Contact one of the three major credit bureaus to place a fraud alert on your credit records:
  • Contact your financial institutions, and close any accounts opened without your permission or tampered with.
  • Respond immediately to any IRS notice; call the number provided. If instructed, go to the Identity Verification Service.
  • Complete IRS Form 14039, Identity Theft Affidavit; print, then mail or fax according to instructions.
  • Continue to pay your taxes and file your tax return, even if you must do so by paper.

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Census Related Fraud

The U.S. Census Bureau is the federal agency responsible for collecting data about the people and economy of the United States. It must collect some personal and demographic information from people and businesses to do this research.

Some scam artists may act as if they work for the U.S. Census Bureau to collect personal information about you to use for fraud, including stealing your identity. These scam artists may send you letters that seem like official letters from the U.S. Census Bureau, or they may come to your home to try to collect information about you.

The U.S. Census Bureau provides tips to help you spot and report these scams so that you are not a victim.

To verify if a survey is from the U.S. Census Bureau:

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Last Updated: May 22, 2017

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