The Most Common Types of Financial Fraud

The desire to get easy money often entails risks of falling victim to financial fraudsters. Earnings from cryptocurrencies, trading through dubious brokers, betting, online casinos, investments in suspicious projects, registration on unverified sites – all this can deprive you of your livelihood in an instant.

Given the almost daily improvement of deception methods, it is worth examining the most commonly used fraud schemes and their types. This information can warn potential victims of scammers from losing capital and help recognize charlatans before direct interaction with them.

Popular Types of Fraud

One of the most successful types of internet schemes from scammers today is phishing. It is unlikely that there is even one person who has never, during the use of social networks, received suspicious emails or messages in messengers asking to follow a link and receive a prize. This is exactly how crooks get the information they need for scams: passwords and logins, passport, and bank data.

It is important to know about common popular financial scams to be able to resist most of them:

• Fraudulent calls and messages – a classic trick where people receive SMS supposedly from a relative asking to transfer money, requiring a card top-up urgently. The so-called social engineering is an effective method of impacting primarily the victim's psyche.
• Investment fraud – involves scammers offering investment opportunities with the promise of decent profits. Offers come by phone, and the callers are skilled in motivation and persuasion, embellishing the numbers of future income. Victims believe and log into their online bank to join the investment environment. Since the process is complex and not everyone can figure it out right away, scammers offer the client guidance and convince the person to enable the «screen sharing» function on their phone, after which they provide clear instructions for installing a program that is malicious and opens access to finances, after which the owner will no longer be able to control the movement of funds.

• Another option of how money is deceived – is card fraud. The temptation is based on purchasing goods with temporary huge discounts. These can be jewelry or mobile gadgets, as well as other goods from completely different categories. The presented online advertisement shows that there are only 2 items left in the marketplace window of the desired product. And the person, wishing to purchase them at a bargain price, transfers money to the specified store. Prepayment is a guarantee that the product will go to the person who made the payment, as there are more than enough people willing. This is the scam – money is debited from the card, and the scammers, of course, do not intend to send the buyer the goods.

• Stock financial fraud: an illegal broker or forex dealer provides services without having legal rights to do so. Clients are charged deposits, promised high earnings and instant profits, but in reality – the scammers simply disappear with the money received from users.

When choosing a partner for interaction to obtain stable income, it is important to rely on the company's experience and recommendations from those who have already tested the platform and had a positive interaction experience.

Types of Fraud Related to Lending

Credit fraud schemes – one of the common ways of financial deception. There are many advertising banners that proclaim quick loans at acceptable rates. The danger in this situation is that when filling out an online form for application approval, you are required to provide personal data, and then – pay a certain fee for the specialist’s services. A company issuing loans and operating legally does not require such advance payments, so it is worth stopping at this stage and ceasing communication with this intermediary to avoid negative consequences, as illegal lending will not be safe.

Different situations arise in life when there is a lack of finances during a certain period. Borrowing from relatives is undesirable, and friends cannot help due to the lack of funds. But there is a way out of the situation – take a loan. Often, sham companies issue consumer loans without having legal rights to do so. In such companies, suspicious actions are observed: representatives may charge various commissions, unjustified fines. Often, the organization requests the return of funds ahead of time, citing a specific contract clause (which was not present at the initial conclusion). When a person cannot fully return the borrowed amount, the company warns of a breach of contractual obligations – and thus gains the right to collateral. As a result, the person is left with nothing.

How to Determine the Reliability Level of a Company and Avoid Falling into the Fraudsters' Trap?

It is important to clearly understand that any financial structure providing investment services, offering loans, credits, as well as earnings, must operate legally.

To confirm the legality of its functioning, it must have:

• official documentation;
• a registration certificate of company establishment;
• a license from controlling authorities and financial regulators;
• a real address of representation.

Without the necessary set of mandatory documents, cooperation can be extremely dangerous.

Ways to Protect Yourself from Fraudsters

To protect yourself from financial fraud, it is worth considering effective countermeasures in advance, so as not to suffer from the loss of funds later. To maximize your safety and preserve your funds, it is necessary:

• Create strong passwords and do not provide access to them to anyone.
• When conducting a transaction, compare the recipient's details and the amount required for payment, sent in SMS, with the bank's mailing or with the information posted on the bank's website. If a discrepancy is found, do not enter the password and do not make the payment.

• Canceling a transaction does not require entering passwords – only pseudo-financial organizations may ask for such an action.
• It is important to visit secure sites. If a suspicious link is observed, do not visit such a web resource.
• Antivirus programs are available to help users, serving as protection for financial assets.

Fraudsters have so many tricks for extracting money that sometimes even those most confident in their vigilance become victims. But correct actions and effective methods of fund protection will help avoid falling into the hands of scammers.