Types of Consumer Fraud (2024)

• Advance Fee Fraud
  • Debt Elimination Fraud
  • Nigerian Fraud
• Cashier's Check Fraud
• Fictitious/Unauthorized Banking
• High Yield Investment Fraud (Prime Bank Fraud)
• Identity Theft
• Phishing

Advance Fee Fraud

Advance fee fraud, also called upfront fee fraud, is any scam that, in exchange for a fee,

• Promises to send you money, products, or services;
• Offers you the opportunity to participate in a special deal;
• Asks for your assistance in removing funds from a country in political turmoil; or
• Asks for your assistance to help law enforcement catch thieves.

Whatever the scammers call the upfront fees (membership fee, participation fee, administrative or handling fee, taxes) all have one thing in common: the victims never see their money, or the scammers, again. Advance fee schemes come in many forms. We have provided some examples here. For more information, you can also visit the Federal Trade Commission website and perform a key word search.

Debt Elimination Fraud

Unlike legitimate companies who work with debtors to help them responsibly repay their debts, debt elimination scammers promise to make you debt free in exchange for a modest upfront or membership fee that they simply pocket. Victims pulled in by these schemes will certainly lose that fee, but they may also lose property, incur additional debt, damage their credit rating, risk identity theft, or face legal action. To learn more, read Answers about Debt Elimination and Fraudulent Schemes or visit the Bureau of Consumer Protection on the Federal Trade Commission website.

Nigerian Fraud

This fraud combines identify theft and advance fee fraud. Scammers posing as government officials contact victims asking for help in transferring millions of dollars out of Nigeria in exchange for a percentage of the funds. They convince victims to provide their bank name and account numbers and other identifying information and to send checks to pay for bribes or legal fees. Perpetrators may also use the personal information received to drain victims' accounts and credit cards. The Nigerian government is not sympathetic to victims who, by participating in this scheme, violate both Nigerian and U.S. law. Read more about this and other common fraud schemes on the Federal Bureau of Investigation website.

Cashier's Check Fraud

Scammers take advantage of the trust people place in cashier's checks to steal money from your account or to avoid paying you for goods and services. It is difficult to detect fraudulent cashier's checks. When you deposit a fraudulent check into your account, the law requires your bank to make the funds available within a specific period of time even if the check has not yet cleared through the banking system. Once the check is returned unpaid, your bank, generally, can reverse the deposit to your account and collect the amount of the deposit from you. To learn more, read Avoiding Cashier's Check Fraud and Answers about Cashier's Checks.

Fictitious/Unauthorized Banking

Banks operating without a license or charter in the United States or any other country are operating in an unauthorized manner. When we are notified of a fictitious bank, we may issue an alert.

High Yield Investment Fraud (Prime Bank Fraud)

High yield investment fraud, also called prime bank fraud, involves issuing or trading prime bank, prime European bank, or prime world bank financial instruments that do not, in fact, exist. Fraudulent individuals or companies promise their victims huge profits with little risk if they invest in these instruments. Promoters use fake documents that appear legitimate and often claim to have special access to investment programs that ordinarily are available only to top financiers in the world's financial centers. Fraudsters claim to have secret or insider knowledge to share with a select few and use that premise to cloak their operations in secrecy. To learn more, read How Prime Bank Frauds Work. If you suspect that someone has approached you with a fraudulent investment opportunity, visit the Enforcement Complaint Center on the Securities and Exchange Commission's website.

Identity Theft

Identity theft is a serious crime. It occurs when someone uses your personal information, such as your name, Social Security number, or credit card number, without your permission to commit fraud or other crimes. The Federal Trade Commission (FTC) estimates that as many as 9 million Americans have their identities stolen each year. You should review your credit report and credit card statements often to verify that you made the charges shown. To learn more, read OCC's Answers about Identity Theft, If You Become a Victim of Identity Theft, and Identity Theft on the FTC website.

Phishing

Fraudsters are always looking for ways to get your personal or financial information. When they use the Internet to do that, it's called phishing. These scam artists send email or pop-up messages that might alert you to a problem with your account or state that you have a refund waiting. Some of these messages appear to come from legitimate companies. To learn more, read Phishing Attack Prevention: How to Identify & Avoid Phishing Scams.