Consumer debt in the United States reached $4.1 trillion in June 2019 — a telling picture of the state of finances for the average American.
Large debts are just one problem faced by consumers in America. Many innocent people find themselves to be unwitting victims of consumer fraud cases, where they experience financial or personal loss. Typically this loss occurs at the hand of organizations and individuals using unfair, deceptive, misleading, or downright false business practices.
Regulations such as lemon law, warranty laws, and fair debt collection laws exist to protect consumers against consumer fraud.
Financial Protection Bureau is an entire organization dedicated to keeping banks and financial companies in line to protect against consumer fraud cases. But at the same time, criminals and questionable businesses are constantly finding new ways to take your money.
To help you navigate this tough subject, the following are the most common types of consumer fraud cases out there right now:
Identity theft is a crime that occurs when your personal information is stolen, typically by a hacker. This information could be as simple as your full name, or as sensitive and intimate as your social security number or credit card details.
The goal of identity thieves is to acquire enough of your information to impersonate you in some way. Depending on the information they harvest, they can go so far as to open credit cards and make purchases in your name. When they’re done, you’re left to foot the bill.
Other forms of identity theft culminate in having your bank account drained overnight, having your health insurance used by another person, or losing your tax refund to a thief.
If you notice any of the following, you could be a victim of identity theft:
- Withdrawals from your bank account that you didn’t authorize
- Bills no longer coming to your address — which could mean a fraudster changed your address for your name
- Calls from debt collectors regarding credit cards you didn’t open and debts you never borrowed
- New and unfamiliar financial accounts on your credit report
- Bills from medical providers for treatments you never got
Credit and Debit Card Fraud
You may be a victim of this type of consumer fraud case if you notice charges on your debit or credit card that you don’t remember making. If this happens, call your card’s financial institution immediately.
This sort of consumer fraud is actually somewhat common. Your credit card number could be picked up by a clerk at a grocery store or fast-food restaurant while you’re not looking. Or a hacker managed to capture your payment details through an insecure WiFi connection.
If the charge was made to your credit card, the card issuer should be able to correct the error after a simple phone call, after which they can lock your card number and send you a replacement card to use. If the mysterious charge was placed on your debit card, you may be less lucky. Banks can’t always simply reverse a charge on your behalf, although the best banks do everything they can to resolve the fraudulent charge.
To avoid this from happening, avoid using your debit card for purchases. Instead, rely on a credit card for payments, and use your bank account to pay off your credit card in full each month. And check your bank and credit card balances daily to keep tabs on your finances.
Debt Collection Fraud
Finally, some scammers will place phone calls to consumers like you pretending to be debt collectors. Even if they don’t directly ask you to make a payment to them, they’re highly skilled at weaseling personal information out of you to use for personal gain. Typically, they’ll be very vague about how much debt you owe, hoping to fool you for long enough to get your information. Never give out your social security numbers, account numbers, or other personal data on the phone or in an email.
And there you have it: these are some of the most common forms of consumer fraud cases. As a disclaimer, this information is not legal advice and should not be taken as such. Always consult a lawyer when in doubt regarding any legal matter.