9 Pesky Fraud Schemes and How to Avoid Them

There are many scams happening in the world and criminals are becoming increasingly sneaky. The COVID-19 pandemic and subsequent increase in digital use accelerated this trend. Year-over-year leading up to June 2020, there was a 42% increase in digital transactions in the U.S. and Canada – 60% of which were made on a mobile device – and a 48% increase in mobile device fraud attacks.¹

But fraud doesn’t just occur on the device in your pocket. Arm yourself in the defense against fraud by learning the common types of fraud and how to avoid becoming a victim. Being proactive will help you protect your finances and your identity.

The most common types of fraud

1. Credit and debit card fraud

Credit and debit card fraud is the unauthorized use of a credit or debit card, or similar payment tool, to fraudulently obtain money or property. Credit or debit card numbers can be stolen from unsecure websites or obtained in an identity theft scheme. Check your statements monthly to identify and dispute any fraudulent charges. Doing so will allow your financial institution to put a hold on the transaction and potentially issue you a new card.

Tip: Download General Electric Credit Union's (GECU) mobile app or enroll in Online Banking for convenient access to your accounts. 

2. Health care fraud

Health care fraud continues to grow at a rapid pace. The pandemic has only accelerated this as scammers take advantage of people trying to gain access to vaccinations and people open themselves up to identity theft by posting pictures of their vaccination cards on social media.

The COVID-19 vaccine is free to all Americans whether you have health insurance or not.² If someone contacts you with an opportunity to buy vaccine access, they are trying to scam you. Ohio residents can utilize the Ohio Department of Health’s “Get the Shot” tool to schedule a vaccine appointment.

Do not share a picture of your vaccination card online, as the card contains both your name and date of birth. Criminals can then utilize channels on the dark web to gain access to additional personal information, such as your social security number. Don’t give them a gateway into your identity: Post a selfie showcasing your bandage-clad arm instead!

There are age-old health care scams not related to COVID-19 as well. Often, a criminal’s goal is to obtain your health care insurance information, and they are creative in their approach. They may offer you a free health screening, provide an incentive to visit a clinic, bribe medical personnel with access to personal records, or purchase information from others involved in fraud.

The most important safeguards include:

• Protect your information. Only provide it to professionals you know and trust.
• Don’t sign blank insurance claim forms to a medical provider to bill for services.
• Ask your medical providers what they will charge and what you will be expected to pay out-of-pocket.
• Keep accurate records of all health care appointments.
• Review the explanation of benefits sent from your insurance company.

3. Elder fraud

Sadly, scams targeting older Americans are always prevalent. Seniors are often targeted because they are perceived as more trusting, have likely generated a hefty savings, tend to have good credit, and have more assets in general. This unfortunate trend continued during the pandemic. 217,000 people have filed a fraud report related to COVID-19 since January 2020, and seniors experienced the highest monetary loss among any age group, with people in their 80s losing an average of $900.³

There are several different scams falling under the elder fraud category. These include:

• Grandparent scam. The grandparent scam usually occurs over the phone. A criminal will call or text pretending to be a relative – typically a grandchild – and claim something bad has happened, like getting arrested. The scammer typically places pressure on the victim by calling in the middle of the night to portray a sense of urgency. They often need high dollar amounts and will ask for it to be wired immediately. When receiving these types of calls, it’s important to slow down. Ask for the number to call back, then call to confirm the situation with a trusted relative in the meantime. Don’t rush into a decision.
• Sweepstakes or lottery scam. The sweepstakes scam is when victims receive a call stating they have won a trip or money, and to collect the prize they must provide a credit card number or other form of payment to cover taxes and fees. If you didn’t enter a sweepstakes or a lottery, you didn’t win. Remember, a legitimate organization will not ask you for money if you win a prize. Do not give out personal or banking information.
• Tech support. The tech support scam has been around for many years. In 2019, the FBI’s Internet Crime Compliant Center received 13,633 complaints related to tech support connecting a loss of $54 million from victims 60 years or older.⁴ Criminals claim to provide customer, security, or technical support to defraud these individuals. It may involve something like a pop-up window or locked screen on your computer. A legitimate company won’t initiate a phone call with you out of the blue. Never give remote access of your device to unknown users.

If you think you are a victim of some sort of elder fraud crime, call the National Elder Fraud Hotline at 1.833.372.8311 to report the crime and receive assistance from the Department of Justice.

4. Identity theft

Identity theft occurs when someone uses your identity in a crime or fraudulent activity. It’s important to review your bank and credit card statements to detect any abnormal transactions. It’s also wise to shred documents containing personal information and review your credit report annually to look for any irregularities.

Identity fraud can branch out into another type of fraud involving unemployment claims. Ohio has seen an increase in both legitimate and fraudulent unemployment claims since the pandemic started. More than 20,000 of the over 115,000 unemployment claims filed in Ohio in the week ending March 13^th were flagged for potential fraud.⁵ Victims of unemployment fraud are at a risk of ongoing fraud. Criminals may reuse the personal information used to commit the crime to do other illegal things, such as opening a bank account in your name but under their control. If you applied for legitimate benefits, unemployment fraud may also lead to delays on needed funds due to fraudulent use of your identity.

5. Internet fraud

Internet Fraud, also known as an online data breach, occurs in many different forms, but these are the two most common:

• Phishing. The act of sending an email claiming to be a legitimate business to deceive the recipient into divulging personal, sensitive information.
• Internet Auction Fraud. Misrepresentation of a product advertised for a sale or the non-delivery of products purchased.

To avoid falling victim to these scams, take caution when clicking on links from unknown senders. If something seems too good to be true, it probably is. Additionally, be sure to report suspicious online activity here.

6. Romance scams

Romance scams usually involve people who meet on legitimate dating sites. The scammer acts caring and genuine to gain the victim’s trust and take advantage of their emotions. A lot of people are looking for someone to talk to or a form of companionship, making them vulnerable to these attacks. During the pandemic this was especially true. Compared to 2019, romance scams increased nearly 39% in 2020 and accounted for a consumer loss of $304 million.⁶

As online relationships progress, scammers often claim they can’t meet in person due to reasons like work or travel. Relationships then progress for weeks or months and eventually there is a request for money. The request may be for a plane ticket, paying rent, or other financial help. At this time, the victim has developed an emotional connection and is more likely to give money to the scammer.

To avoid romance scams:

• Research the person and their photos.
• Go slow and ask a lot of questions. Take note of inconsistent information.
• Look for warning signs, such as: never wanting to meet, living out of the country, moving the relationship suspiciously quick, or asking for financial information.
• Never send money.

7. IRS or law enforcement scams

IRS and law enforcement scams are usually received by phone. The fake caller will use a phone number similar to a government agency’s to look legitimate on your caller ID. They will state you owe the government money. Some callers are threatening, so the best thing to do is hang up. The government will never call you asking for money for an outstanding fine or fee. If you really did owe money, you would receive a form in the mail with contact information and verifiable details on your case.

8. Delivery scams

Delivery scams involve receiving an email or text saying a package couldn’t be delivered to your house, and to contact the sender immediately through a provided link. The link will take you to a seemingly legitimate site asking for updated personal information, which is then used by the scammer to commit fraud. If you are expecting a package, track the package or call customer service through the company directly to confirm any issues.

9. Charity and disaster fraud

When hurricanes, earthquakes, or other disasters strike, many of us are called to help and want to give to those affected through community relief efforts. Criminals solicit information for organizations who do no real work in order to steal your information for future use.

Only give to established charities whose work you know and trust. Be aware of organizations with copycat names. Stay alert to red flags: If an organization asks you to donate through cash, gift cards, virtual currency, or wire transfer, it’s probably a scam. And lastly, research the group’s track record through resources like the Better Business Bureau®.

Criminals have many creative methods to commit fraud. Protect your finances and your identity by being proactive and trusting your instincts. To stay on top of fraud, be sure to monitor your General Electric Credit Union (GECU) accounts through the mobile app or Online Banking. If you do spot an unauthorized transaction, contact GECU to discuss your options. In some cases, you may be advised to open a new account and close the compromised one. If you are not a GECU credit union member, we would love for you to join! Membership is open to anyone who lives, works, worships, or goes to school in the Cincinnati area.