What are the Most Common Types of Consumer Fraud?

May 17th, 2022

There are many types of consumer fraud, all of which can result in financial loss and injury. Increased awareness of consumer fraud can help you protect yourself and your loved ones, or help you tackle an injustice you’ve already experienced.

What is Consumer Fraud?

We’ve all heard the term, but what exactly is consumer fraud?

Consumer fraud refers to unfair or deceptive business practices that cause consumers to lose money or be misled.  Fraud can consist of false promises, inaccurate claims, and other illegal business transactions, without the victim’s awareness. There are several common types of consumer fraud, from credit card fraud to identity theft and false advertising. Here, we explore some of the most common types of consumer fraud and explain what to do next if you have been targeted.

Identity Theft

This is one of the most common types of consumer fraud. When someone steals your personal information, you are a victim of identity theft. The type of information commonly stolen includes:

  • Your name
  • Credit card information
  • Social Security number
  • Other financial information

Perpetrators assume your identity to access your bank account, use credit cards in your name, collect refunds owed to you, and complete other unauthorized financial transactions. If there are unfamiliar accounts on your credit report or you notice unexpected withdrawals from your bank account, you may be a victim of identity theft.

Mortgage/Real Estate Fraud 

Consumer fraud also occurs through illegal mortgage and real estate transactions. Real estate and mortgage agents can scam consumers by misusing their specialized knowledge of the market and real estate law. For example, you may be the victim of mortgage and real estate fraud if you were asked to sign essential papers without having the chance to read or understand them, or were misled regarding information about foreclosure or loans.  Under the federal Real Estate Settlement Procedures Act (RESPA), protections are in place for individuals who engage in real estate transactions.  Mortgage and title companies who charge hidden fees or do not disclose the nature and amount of charges may be liable for violating this law. 

Credit and Debit Card Fraud 

Credit card fraud typically refers to the unauthorized use of a credit card or debit card. Some signs of credit and debit card fraud include charges on your statement that you do not recognize, charges from unfamiliar locations, or a significant drop in your account balance. 

Data Breach Litigation

Perpetrators acquire social media login information, email addresses, credit card numbers, social security numbers, and other personal information through data breaches. Typically, the goal for hackers obtaining this information is to use it for identity theft. As a result, criminals can take out loans in your name, make purchases, or complete other fraudulent transactions.

Companies that store individual account information may be liable for the harm that is caused when hackers obtain this information through a data breach.  Joseph, Greenwald & Laake is national counsel for the plaintiff class in the Marriott Data Breach Litigation, currently pending in United States District Court for the District of Maryland. 

Debt Collection Fraud 

In some cases, debt collection is legitimate. Debt collection fraud occurs when companies engage in illegal, deceptive, or improper tactics in the collection of debt. 

Some indicators of debt collection fraud include:

  • Continual harassment by a debt collection company.
  • Debt collectors pretending to be police or lawyers to gain trust.
  • Intimidation, threats, bribes, and other forms of harassment from “debt collectors.”

False Advertising

Another common type of consumer fraud is false advertising. Under law, a business is required to make accurate representations and statements about their product’s characteristics, qualities, and benefits.  When a business misrepresents an item for sale by making untrue claims or declarations, this may be false advertising. Examples of false advertising include false claims that a product can improve your physical health, mental health, or capabilities. 

What to Do if You Are a Victim of Consumer Fraud

If you suspect you are the victim of any of the above fraudulent activities, the consumer fraud attorneys at JGL Law are here to assist you. We specialize in consumer protection law nationwide and are committed to excellence. Backed by over five decades of experience, we deliver strategic solutions and zealous advocacy to all of our clients, and we are committed to helping those who have been victims of unlawful business practices or fraud. Contact us today to schedule a consultation with our skilled consumer fraud attorneys. 

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