Types of consumer fraud

On Behalf of | Aug 19, 2021 | Criminal Defense |

Consumer fraud is a type of white-collar crime that uses deceptive practices for financial gain. Some scams have been around a long time, but technology helps scammers devise newer versions. It may be helpful for residents of California to know the type of financial scams they may come across.

Identity theft

Statistics from ID fraud surveys found that 1 in 20 Americans experiences ID theft annually, causing average losses of $1,343 per person. Identity theft involves stealing someone’s personal data, such as credit card details and addresses, to use for personal gain.

Scammers commonly get this information through data-skimming devices on teller machines or by sifting through trash. Penalties for ID theft in California may include $1,000 fines and up to three years of jail time.

Mortgage fraud

Mortgage fraud targets distressed homeowners and involves intentional omissions, lies, and misrepresentation to turn a profit. A common scam includes foreclosure rescue scams, which promise to help the homeowner keep their home but involve pocketing the mortgage payments. Mortgage fraud can carry stiff penalties of up to 30 years in jail and $1 million in fines.

Nigerian scams

Nigerian scams, also known as 419 scams, have been around a long time in many forms, but modern versions commonly use email. The most common method claims that the sender is from a foreign country and needs a safe place to deposit money until their situation improves.

They promise the victim a portion of the money for keeping the money safe if they give banking details. The scammer never sends the promised money and uses the victim’s financial details to steal their funds.

Though the penalties for consumer fraud vary based on the scam, fraud is a serious charge. Knowledge of consumer scams may help individuals avoid accidental participation and false accusations.