Fraud awareness can be considered a part of good financial planning

Fraud awareness benefits us all. A good understanding of how fraudsters
operate can help reduce the chances of falling victim to them.

It's useful to think of fraud awareness as part of your financial planning and budgeting skills. After all, being 'conned' or 'scammed' is going to reduce your wealth and will certainly not be good for your peace of mind and self esteem.

Most frauds fall under the broad description: Consumer Fraud and they include:-

  • Door-to-Door Frauds and Scams
  • Telemarketing Fraud(Phone Fraud)
  • Mail Fraud
  • Investment Fraud
  • Internet Fraud
  • Identity Theft
  • Credit Card Fraud
  • Mortgage and Title Fraud
  • Others: Charm Letters, Ponzi Schemes, Work at Home Opportunities etc.

Some trends:-

Computers and telephones make it easier for fraudsters anywhere to cheat
people in almost any country. Few con artists are ever caught so arrest
figures don’t reflect the true extent of the crime. Police estimate that only
10% of fraud is ever reported - this lack of victim response certainly favors the criminals.

Through telemarketing fraud alone, billions of dollars are lost each year in the United States and Canada. In a study done by AARP (American Association of Retired Persons) a high percentage of the victims had retired in the last ten years. They described themselves as sophisticated consumers, knowledgeable about financial matters and declared that they “couldn’t be fooled”.

Click here to see 'How Con Artists Operate'

The difference between fraud and theft:-

With fraud, victims are often unaware for a long time that they have
been targeted so they have no reason to feel bad about it.

With theft, a victim knows right away that they’ve been robbed – it’s pretty
obvious.

The difference between a Fraud and a Scam:-

Scams can actually be legal. For example an advertisement might offer an official miniature portrait of the queen for $20 and you receive a postage stamp. It is misleading, but an agreed exchange took place so it’s hard to bring legal action against the scammer.

A fraud is illegal because criminal activity has taken place. The full force
of the law can be bought against the guilty party but the likelihood is that
they will be long gone and trails will have been covered.

Given the above, it is evident that the best defense against fraud and scams
is to become familiar with some of the methods the bad guys use.

The aim is to develop instinctive habits to avoid becoming a target of the fraudsters and tricksters.

Strategies:-

Knowledge of "Red Flag Phrases” is useful in developing fraud awareness....here are some of the more common ones:-

“Congratulations!”
This is a very odd word for someone to use out of the blue. It’s a term
that’s usually used by some one you know if you just got married, graduated
from college or had a baby.

“Don’t tell anyone”
This phrase definitely belongs in grade school!

“No risk to you”
One definition of life itself is a well managed set of risks. “No Risk” is just not possible.

“I just need your number”
No they don’t! You are the only one who needs your number and no one else
needs it unless you decide that they do.

“Today only”
What’s so special about today? How about tomorrow, or next month, or even
next year?

“A Free Prize”
This is an oxymoron; all prizes are free.

If you hear any of these red flag phrases your antennae or 'spidey' senses need to start vibrating. When you become attuned to them you are well on your way to developing fraud awareness.

Con artists are criminals and they are intent on taking your money. They are often feeding an addiction or have a connection with organized crime. Awareness can help to curtail their activities and preserve your wealth.

Some more material on fraud awareness and the various types:-

Door to Door, Mail and Phone

Internet, ID theft and Credit Card

Investment, Mortgage and Title

Awareness of what's in your wallet


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