How Can I Avoid Being the Victim of Consumer Fraud?

Every year, millions of Americans are conned out of their hard-earned money by deceptive, unscrupulous individuals who make false claims to consumers and cheat them out of a significant amount of money. Too often, innocent, hard-working individuals are exploited during an interaction with an individual or a business representative who convinces them that they are participating in a legal and legitimate business transaction, only to find out later that they have been taken advantage of and defrauded out of thousands of dollars. In extreme cases, consumers may lose their entire life savings. If you have been the victim of consumer fraud, and federal or state consumer protection laws have been violated, you may be able to recover damages by filing a civil claim. A consumer protection lawyer can assist you with the claims process, ensure that your legal rights are protected, and ensure that you are compensated for your losses. 

What Is Consumer Fraud?

Consumer fraud occurs anytime an individual consumer suffers a financial or personal loss as a result of false, deceptive, or illegitimate business practices. Victims of consumer fraud are led to believe that the transaction they are participating in is legal and valid. Fraudsters generally target consumers such as college students and senior citizens who are more likely to be misled. However, all consumers are at risk, and fraudsters have endless tricks up their sleeve that can trick even the savviest consumer into being conned out of hundreds, or thousands and dollars. 

Fortunately, consumers are protected against fraudulent business practices by government agencies such as the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission’s (FTC) Bureau of Consumer Protection.  Both agencies protect consumers from fraud. The CFPB oversees bands and financial companies to ensure that they treat consumers fairly. The Bureau of Consumer Protection collects complaints from consumers, conducts investigations, and sues companies who have broken the law. The agency protects consumers from deceptive and fraudulent business practices.

What Are Common Examples of Consumer Fraud?

According to the FTC, the most common complaint from consumers for the past 15 years has been identity theft, although credit card theft is likely the costliest. The financial loss associated with any type of consumer fraud can be devastating, particularly for recent college graduates and retirees who are vulnerable to con artists’ scams. According to a survey by LexisNexis Risk Solutions, there was a 157 percent increase in successful fraudulent transactions from 2012 to 2016. The number of fraudulent transactions that were prevented during that same period also increased by 162 percent. By having a general understanding of the different types of frauds that exist, consumers can take proactive steps to protect their rights and avoid being taken advantage of by dishonest fraudsters. The following are examples of some of the most common types of consumer fraud:

Credit card fraud: This occurs when someone steals your information to your credit card and uses it to purchase merchandise, withdraw cash, or make other unlawful transactions. The following are common signs of credit card fraud:

– There are charges you do not recognize.
– You do not recognize the name of a company associated with a charge.
– There are charges from places you have never been.
– There is a significant drop in your available credit balance.

The following are steps you can take to avoid credit card fraud:

– Check your accounts on a regular basis and report any unusual activity to the bank.
– Cancel the credit card or ask the credit card company to put a freeze on the account until you can rectify the situation.
– Do not provide callers with information they should already have.

Mortgage fraud: Unfortunately, it is often homeowners who are already distressed who are the victims of mortgage fraud, according to the FBI’s Financial Institution Fraud Unit. Common signs of mortgage fraud include the following:

– You were required to pay fees before services were provided.
– You were assured that a foreclosure would not happen or that you would be eligible for a loan modification.
– The process of purchasing a home seemed more time consuming than normal.
– Your questions were not addressed or were not answered completely.
– You were not given the chance to thoroughly read or gain a complete understanding of the papers you were asked to sign.

The FBI recommends that consumers take the following steps to protect themselves against fraud:

– Obtain referrals before making a real estate deal.
– When doing business with a real estate agent, ask for and check his or her license.
– Never sign paperwork that you do not understand.
– If the transaction seems too good to be true, walk away.
– Get the advice of an experienced credit counselor or lawyer.

Identity theft: This occurs when someone steals your personal information, including your name, Social Security number, credit card information, or bank account number, and uses this information to steal money or commit other crimes. The most common type of identity theft is credit card or bank account theft. Unfortunately, identity theft is so dangerous because once the consumer realizes that his or her identity has been stolen, the thief may have already used the information to take out a loan, apply for another credit card, or caused other types of financial or personal harm. Undoing the damage can be very difficult, costly, and time consuming. The following are common signs of identity theft:

– There are unexpected withdrawals from your bank account.
– You stop receiving bills and financial statements in the mail, which is a sign that your address has been changed by the person who stole your identity.
– You are contacted by debt collectors about unfamiliar credit cards and debts.
– Unfamiliar accounts appear on your credit report.
– You receive bills for medical procedures you did not have.
– The IRS notifies you about a tax return that was filed in your name.

According to the FTC, you can take the following steps if you believe that your identity was stolen:

– Contact all the companies where you suspect fraud occurred. Report the fraud, close or freeze your accounts, and create new login usernames and passwords.
– Obtain free credit reports and place a free fraud alert with credit bureaus.
– Report the theft to the FTC and the local police.

Debt collection fraud: If a scammer is posing as a collection agency, demanding payment of a bogus debt, your rights are protected by the Fair Debt Collection Practices Act (FDCPA). Common signs of this type of fraud include the following:

– Scammers will pressure you to pay with cash or a money transfer.
– Scammers may pose as a government official and threaten you with jail time.
– Scammers will try to get you to provide personal information such as bank account numbers or your Social Security number.

If you have been targeted by a fraudulent debt collector, you are urged to take the following steps:

– Never give personal information to someone over the phone or via email.
– Ask the caller to provide his or her name, company name, and street address.
– Understand your rights by checking the FDCPA.
– File a complaint with the FTC.

If something sounds too good to be true, or you get a bad feeling about the person who is trying to get you to pay for some type of service, trust your gut. If you have been the victim of a consumer fraud, you are urged to contact a consumer protection lawyer as soon as possible.

Consumer Protection Lawyers at Francis Mailman Soumilas, P.C. Protect the Rights of Consumers

If you or a loved one has been exploited, lied to, or defrauded by a dishonest and corrupt individual or business, you are urged to contact the consumer protection lawyers at Francis Mailman Soumilas, P.C. Our experienced legal team will conduct a thorough investigation into the details of your case, assist you with every step of the claims process, and secure the financial compensation for which you are entitled. Call us at 215-735-8600 or contact us online today to schedule a free consultation. With offices located in Philadelphia, Chicago, New York, and San Francisco, we serve clients nationwide.