Common financial fraud scams

On Behalf of | Feb 1, 2022 | White Collar Crimes

Financial fraud involves taking money from someone else using deceit or illegal means. The scammers commonly promise goods or services that may not exist or misrepresent the product. There are some common types of financial fraud in New York City people should know about, so they can avoid them.

ID theft

ID theft is a type of financial fraud committed when a scammer looks for ways to steal personal data to buy things or open accounts. A common way this happens is through phishing emails, which look like they are from legitimate companies but redirect to the scammers’ websites.

The email may claim there is a problem with the victim’s account, and he or she needs to verify the information to avoid closure. Sometimes, scammers rummage through trash cans to find discarded statements with the information or install hidden card readers on ATMs.

Telemarketing fraud

Telemarketing scams cover several types of fraud, which may involve fake charities, magazine subscriptions, credit card fraud or fake prizes. These scammers often use high-pressure tactics to get someone’s account information for an “exclusive” offer or pretend to be collecting on behalf of a charity. They may claim the victim has won a lottery he or she never entered or won a prize and must pay a fee to get the prize.

Tax fraud

Sometimes, scammers commit tax fraud by pretending to be legitimate tax preparers that promise taxpayers they can reduce their tax liability or increase their refund. However, if a taxpayer claims deductions for which he or she doesn’t qualify, it can put him or her at risk for an audit. The false preparer may use the taxpayer’s information to steal his or her refund before he or she files the return.

Financial fraud often carries stiff penalties with fines up to $1 million and/or a 30-year jail term. However, it is possible to get involved in a scam without knowing it, which is a valid defense.