Common Scams and Frauds

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

Equifax Data Breach

Equifax, one of the three major credit reporting agencies in the U.S., announced a data breach that affects 143 million consumers. The hackers accessed Social Security numbers, birthdates, addresses, and driver’s license numbers.

Equifax has launched a tool that will let you know if you were affected by the breach. Visit Equifax’s website dedicated to this breach to learn if you were impacted. You will need to provide your last name and the last six numbers of your Social Security number.

If you are impacted, Equifax offers you a free credit monitoring service, TrustedIDPremier. However, you won’t be able to enroll in it immediately. You will be given a date when you can return to the site to enroll. Equifax will not send you a reminder to enroll. Mark that date on your calendar, so you can start monitoring your credit as soon as possible.

If you detect suspicious activity on your credit report due to the breach, learn how to report it immediately.

The FTC also offers more information to protect yourself after a data breach. Learn how to report and recover from identity theft at IdentityTheft.gov.

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Telephone Scams

Telephone scammers try to trick you out of money or get access to your personal information. Scams may come through phone calls from real people, robocalls, or text messages. The callers often make false promises, such as opportunities to buy products, invest your money, or receive free product trials. They may also offer you money through free grants and lotteries. Some scammers may call with threats of jail or lawsuits if you don’t pay them.

Report Telephone Scams

Reporting scams to federal agencies helps them collect evidence for lawsuits against people committing these scams. However, federal agencies don’t investigate individual cases of telephone scams.

Also report the scam to your state consumer protection office. Some consumer protection offices help residents resolve consumer problems. 

How to Protect Yourself

Remember these tips to avoid being a victim of a telephone scam:

Do

  • Register your phone number with the National Do Not Call Registry. You may register online or by calling 1-888-382-1222. If you still receive telemarketing calls after registering, there’s a good chance that the calls are scams.

  • Be wary of callers claiming that you’ve won a prize or vacation package.

  • Hang up on suspicious phone calls.

  • Be cautious of caller ID. Scammers can change the phone number that shows up on your caller ID screen. This is called “spoofing.”

  • Research business opportunities, charities, or travel packages separately from the information the caller has provided.

Don’t

  • Don’t give in to pressure to take immediate action.

  • Don’t say anything if a caller starts the call asking, “Can you hear me?” This is a common tactic for scammers to record you saying “yes.” Scammers record your “yes” response to use as proof that you agreed to a purchase or credit card charge.

  • Don’t provide your credit card number, bank account information, or other personal information to a caller.

  • Don’t send money if the caller tells you to wire money or pay with a prepaid debit card.

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Banking Scams

Banking scams involve attempts to access your bank account. Some popular banking scams include:

  • Overpayment scams -  A scam artist sends you a counterfeit check. They tell you to deposit it in your bank account, and wire a portion of the money back to them. Since the check was fake, you’ll have to pay your bank the amount of the check, plus you’ll lose any money you wired.

  • Unsolicited check fraud - A scammer sends you a check for no reason. If you cash it, you may be authorizing the purchase of items or signing up for a loan you didn’t ask for.

  • Automatic withdrawals - A company sets up an automatic debit from your bank account, as part of a free trial or to collect lottery winnings.

  • Phishing - You receive an email message that asks you to verify your bank account or debit card number.

Report Banking Scams

The proper organization to report a banking scam to depends on which type you were a victim of.

How to Protect Yourself

Remember these tips to avoid being a victim of a banking scam:

Do

  • Be suspicious if you are told to wire a portion of funds from a check back to a company.

  • Be wary of lotteries or free trials that ask for your bank account number.

  • Verify the authenticity of a cashier’s check with the bank that it is drawn on before depositing a check.

  • When verifying a check or the issuer, use contact information on a bank’s website.

Don’t

  • Don’t be fooled by the appearance of checks or money orders. Scammers can make them look legitimate and official.

  • Don’t deposit checks or money orders from strangers or companies you don’t have a relationship with.

  • Don’t wire money to people or companies you don’t know.

  • Don’t give your bank account number to someone who calls you, even for verification purposes.

  • Don’t click on links in email to verify your bank account.

  • Don’t accept a check that includes an overpayment.

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IRS Imposter Scams

IRS imposter scams occur when someone contacts you, pretending to work for the IRS. The imposter may contact you by phone, email, postal mail, or even a text message. There are two common types of scams:

  • Tax collection - You receive a phone call or letter, claiming that you owe taxes. They will demand that you pay the amount immediately, often with a prepaid debit card or wire transfer. They may even threaten to arrest you if you don’t pay.

  • Verification - You receive an email or text message that requires you to verify your personal information. The message often includes a hyperlink phrase “click here” or a button to a fraudulent form or website.

Report IRS Imposter Scams

Contact the Treasury Inspector General for Tax Administration (TIGTA) if you believe that an IRS imposter has contacted you. Report IRS imposter scams online or by calling 1-800-366-4484. Forward email messages that claim to be from the IRS to phishing@irs.gov.

You can also report IRS imposter scams to the Federal Trade Commission (FTC) online or by calling 1-877-FTC-HELP (1-877-382-4357).

How to Protect Yourself

There are things to look out for to prevent being a victim of an IRS imposter scam.

Do:

  • Beware if someone calls, claiming to be from the IRS. The IRS will always contact you by mail before calling you about unpaid taxes.

  • Ask a caller to provide their name and badge number, and callback number. Then call TIGTA at 1-800-366-4484 to determine if the caller is an IRS employee with a legitimate need to contact you. If the person legitimately is from the IRS, call them back. Otherwise report it to the IRS.

  • Become familiar with what fraudulent IRS email messages look like. Review a sample IRS phishing email.

  • Verify the number of the letter, form, or notice on the IRS website.

  • Be suspicious of threats. The IRS won’t threaten to have police arrest you for not paying a bill.

Don’t:

  • Don’t give in to demands to pay money immediately. Be especially suspicious of demands to wire money or pay with a prepaid debit card.

  • Don’t trust the name or phone number on a caller ID display that shows “IRS.” Scammers often change the name that shows on caller ID.

  • Don’t click on any links in email or text messages to verify your information.

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Video: 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 FTC.gov/impostors.

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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.

Report Charity Scams

Although the Do Not Call Registry doesn’t apply to charities, you can ask an organization not to contact you again.

How to Protect Yourself

Follow these tips to help you detect common charity scam tactics:

Do

  • Check out the charity with your state consumer protection office or the Better Business Bureau before you give.

  • 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

  • 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.

  • Don’t send cash. Pay with a check or credit card.

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Ticket Scams

Ticket selling scams often happen when tickets for popular concerts, plays, special venues, and sporting events sell out quickly but there is a still a very high demand for tickets. Scammers including individuals and fake resale ticket sellers will take advantage of the situation by:

  • Charging prices much higher than the face value of a ticket
  • Creating counterfeit tickets with forged barcodes and logos of real ticket companies
  • Selling duplicates of a legitimate ticket in the form of electronic tickets that they email to multiple buyers
  • Posing as sellers of tickets that are stolen and telling you a hard luck story about why they can’t go to the event at the last minute
  • Pretending to sell tickets online for the purpose of stealing your identity or credit card information

 

Report ticket scams

There are several options to report a ticket scam.

How to protect yourself

There are steps you can take so you are not a victim:

Do

  • Buy tickets at the venue box office.
  • Buy tickets from authorized brokers and third party sellers who have legitimate physical addresses and phone numbers that you can contact to guarantee the validity of the tickets.
  • Check the actual web address of the resale ticket seller; some scammers will create phony websites that closely resemble authentic ticket company websites.
  • Search for the seller’s name, email address, and phone number online, along with the words “fraud,” “scams,” and “fake tickets” to see if there are negative reviews.
  • Look at the tickets before you buy and verify the date and the time printed on them.
  • Make sure the section and seat numbers on the tickets actually exist at the venue.
  • Get contact information for the seller, and have the seller meet you in person in a public place for the ticket exchange.
  • Ask the seller for their proof of purchase of the tickets if you are buying from an individual.
  • Use a credit card to pay third party sellers and make sure the URL for the website has an “s” in the https portion of the address link so your credit card information will be secure.
  • Look for any complaints filed against a ticket company by checking with your state’s consumer protection agency.

Don’t

  • Don’t wire transfer money to pay for tickets.  
  • Don’t trust sellers who want you to pay with a prepaid money card.
  • Don’t pay before seeing the tickets
  • Don’t meet an individual ticket seller alone or in a low-traffic area.
  • Don’t be fooled by online search results. The first ones at the top of the search may be paid ads for ticket services that charge excessive fees, rather than reputable sellers.

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Lottery and Sweepstakes Scams

Prize scammers try to get your money or personal information through fake lotteries, sweepstakes, or other contests. Many claim that you’ve won a prize but must pay a fee to collect it. Others require you to provide personal information to enter a “contest.” These scams may reach you by postal mail, email, phone call, robocall, or text message.

State and local laws govern legitimate lotteries and sweepstakes. In the United States, 43 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands sponsor lotteries to raise money for the state's programs. States that sponsor lotteries publish the results of their lotteries online, or broadcast them on television.

Report Lottery and Sweepstakes Scams

To report a prize scam:

Federal agencies investigate scams and pursue criminal charges against the scammers. They don’t, however, investigate individual cases. State consumer protection offices do sometimes pursue individual cases as well as investigate scams.

How to Protect Yourself

Remember these tips to avoid being a victim of a lottery or sweepstakes scam:

Do

  • Check the postage on a mailed prize notice. If it was sent bulk rate, it’s probably a scam.

  • Try to remember if you entered a particular contest. If you don’t remember entering it, you probably didn’t, and the prize notice is a fake.

  • Contact the actual company to verify a prize notice from an organization known to run a real sweepstakes.

  • Register your phone number with the National Do Not Call Registry. You may register online or by calling 1-888-382-1222. If you receive telemarketing calls after registering, there’s a good chance that the calls are scams.

  • Report spam text messages to your mobile carrier, then delete them.

  • Hang up on suspicious calls.

Don’t

  • Don’t pay a fee, taxes, or shipping charges to receive a prize.

  • Don’t wire money to, or deposit a check from, any organization claiming to run a sweepstakes or lottery.

  • Don’t provide your credit card number, bank account information, or other personal information.

  • Don’t believe anyone who says they’re from the government or an official-sounding organization.

  • Don’t reply to, or click on any links in, a spam text message.

  • Don’t attend a sales meeting to be eligible to win a prize.

  • Don’t give in to pressure to take immediate action.

  • Don’t believe anyone claiming to be from a foreign lottery or sweepstakes. It’s illegal to enter foreign contests like these.

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Pyramid Schemes

Pyramid schemes are scams that require a constant flow of new participants to keep them going. They masquerade as multi-level marketing programs or other types of legitimate businesses. They use new recruits’ required payments to provide “profits” to those participating longer.

Pyramid schemes collapse when they run short of new recruits needed to pay earlier investors. These scams always fail—it’s mathematically guaranteed.

Report Pyramid Schemes

Report pyramid schemes to:

How to Protect Yourself

Keep these tips in mind to avoid falling for a pyramid scheme:

Do

  • Be wary of "business opportunities" that require you to recruit more participants 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 business with the Better Business Bureau, your state attorney general, or any licensing agencies.

  • Ask to see documents, such as financial statements audited by a certified public accountant (CPA), showing that the company generates revenue from selling its products or services to people outside the program.

  • Be skeptical of success stories and testimonials of fantastic earnings.

Don’t

  • Don’t invest until you’ve verified that the business is legitimate.

  • Don’t get involved in businesses that require you to recruit new participants.

  • Don’t buy into franchises that guarantee big profits quickly.

  • Don’t invest in any “opportunity” bearing warning signs of a pyramid scheme.

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Tax ID Theft

Tax-related identity theft occurs when someone uses your Social Security number to get a tax refund or a job. You may not be aware of the problem until you E-file your tax return and find out that another return has already been filed using your Social Security number. If the IRS suspects tax ID theft, they will send a 5071C letter to the address on the federal tax return. Keep in mind, the IRS will never start contact with you by sending an email, text, or social media message that asks for personal or financial information. Watch out for IRS imposter scams, when someone contacts you saying they work for the IRS.    

Report Tax ID Theft

If you suspect you have become a victim of tax ID theft—or the IRS sends you a letter or notice indicating a problem—take these steps:

  • File a report with the Federal Trade Commission (FTC) at IdentityTheft.gov. 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 that show unusual activity.
  • Respond immediately to any IRS notice; call the number provided. If instructed, go to the IRS Identity Verification Service.
  • Complete IRS Form 14039, Identity Theft Affidavit (PDF, Download Adobe Reader); 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.
  • Check with your state tax agency to see what steps to take at the state level.

How to Protect Yourself

Follow these steps to prevent tax identity theft:

Do

Keep an eye out for any IRS letter or notice that states:

  • More than one tax return was filed using your Social Security number.
  • 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.

Don’t

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Investment Scams

Investment scams prey on your hope to earn high returns on a regular basis, without financial risk. 

Report Investment Scams

Report investment scams, if you have been a victim.

The SEC may forward your complaint to the investment company and request that the company reply. The FTC will not research your individual case of investment fraud.

How to Protect Yourself

Remember these tips to avoid being a victim of an investment scam:

Do

  • Research investment opportunities and investment professionals with your state securities regulator and the Financial Industry Regulatory Authority.

  • Learn where the investment and the investment professional are registered, whether in your state or with other regulators.

  • Get all the details of an investment in writing, but still do your own research.

  • Ask questions about costs, timing, risks, and other issues.

Don’t

  • Don’t be pressured to invest immediately.

  • Don’t be influenced by promises that seem too good to be true, such as “guaranteed earnings” or “risk-free” investments

  • Don’t be swayed to invest in something because the investment professional is likable, seems trustworthy, or has credentials and professional titles.

  • Don’t feel pressured to invest because you were told that many other people with similar financial circumstances have invested.

  • Don’t feel obligated to invest because the professional gave you a free gift, lunch, reduced commission fees.

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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.

Report Census Related Fraud

If you suspect fraud, contact the Census Bureau’s regional office for your state or the Census Bureau’s National Processing Center immediately for verification and further guidance.

How to Protect Yourself

Follow these tips to ensure that your personal information stays safe:

Do

  • If you are visited at home by someone claiming to be a census worker, request to see the person’s badge. The badge should have the photograph of field representative, a Department of Commerce watermark, and an expiration date. Here are some other ways to identify a legitimate census worker.

  • If you get a call, postal mail, or email that seems to be from the Census Bureau, follow these tips to help you spot census scams, so you don’t become a victim.

Don’t

  • Don’t provide information if someone claiming to be a census worker asks for your full Social Security number, bank or credit card account numbers, or your mother’s maiden name. The Census Bureau does not ask for these.

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Ponzi Schemes

A Ponzi scheme is a type of investment fraud that relies on money from new investors to pay “returns” to current investors. To keep the scam going, the scheme organizers must continually attract new investors and discourage current investors from cashing out. When they can’t, the scheme collapses.

Report Ponzi Schemes

Report Ponzi schemes to:

How to Protect Yourself

Keep these tips in mind to protect yourself from Ponzi schemes:

Do

  • Be wary of any investment that regularly pays positive returns regardless of what the overall market is doing.

  • Avoid investments if you don’t understand them or can’t get complete information about them.

  • Be alert to account statement errors, which may be a sign of investment fraud.

  • Be suspicious if you don’t receive a payment or have difficulty cashing out.  

Don’t

  • Don’t put your money in investments that promise big returns with little to no risk.

  • Don’t contribute to any investment that isn’t registered with the SEC or with state regulators.

  • Don’t get financially involved with any unlicensed investment professional or unregistered firm.

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Last Updated: November 06, 2017

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