Advertiser Disclosure: Many of the companies featured here provide compensation to us. This is how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear below.
As consumers, we are constantly bombarded with new ways to be scammed. Whether a new twist on an old scheme or something completely new, fraudsters always devise ways to trick us out of our hard-earned money. The Federal Trade Commission (FTC) does its best to keep track of these scams and other consumer complaints. Each year, they rank the most common debt consolidation scams based on their complaints.
1. Identity Theft
Identity theft is a serious problem that can have devastating consequences for the victim. It is important to be aware of the signs of identity theft and to know what to do to protect yourself from becoming a victim. One of the most common ways criminals obtain personal information such as name, address, and Social Security numbers are through phishing scams. In a phishing scam, the criminal will send an email or text message that appears to be from a legitimate source, such as a bank or credit card company.
The message will typically ask the recipient to click on a link or open an attachment to update their account information. When the victim clicks on the link, they are taken to a fake website that looks identical to the legitimate site. The victim then enters their personal information into the fake site, which the criminal collects. Another way that criminals can obtain your personal information is through data breaches.
This year, imposter scams are among the most common types of fraud. These schemes can take many forms but often involve someone pretending to be a law enforcement officer or government official. Sometimes scammers claim to be from a well-known company like Amazon, Netflix, or a major bank.
3. Debt Collectors Scams
Some unscrupulous debt collectors will purchase old, discharged debt for next to nothing. The debt is considered uncollectable for various reasons, and the company is happy to get rid of it.
However, these collectors will then begin harassing the victim, claiming they still owe the money. They make threats and often report the old debt to credit agencies, damaging the victim’s credit score.
This type of behavior violates the Fair Debt Collections Practices act. The victim should not pay but report the harassment to local consumer protection authorities or their state attorney general.
4. Investment Scams
When the pandemic hit and millions of Americans were forced to stay home, there was a surge in day trading in stocks and crypto. Scammers saw an opportunity to take advantage of people stuck at home with nothing to do but worry about their finances. They devised schemes revolving around phony investment opportunities, misleading pitches for precious metals and “rare” coins, and worthless investing seminars.
The FTC received more complaints about investment scams in 2022 than ever before.
5. Business Opportunities
As the world continues to grapple with the fallout of the pandemic, scammers are increasingly targeting people working from home or laid off. These schemes range from dubious multilevel marketing opportunities to fake remote job listings. Scammers sometimes are reviving old scams such as “envelope stuffing” and “medical records filing.”
No matter what the scam might be, these fraudsters are preying on people who are vulnerable and desperate for a way to make ends meet.
6. Lotteries, Prizes, and Sweepstakes Scams
Have you ever received a call or email out of the blue with amazing news? You’ve just won $250,000 in international sweepstakes or the lottery! Of course, you’re so excited that you don’t stop to ask how that’s possible since you didn’t enter any contests. Once you’re encouraged to think about how you’ll use the money, you’re told you’ll have to pay taxes and an administrative fee, but it’s only $1,500. Of course, there is no prize money, and not only are you NOT hitting the jackpot, but you’re also out $1,500.
The healthcare industry is rife with scams that prey on unsuspecting consumers. The Federal Trade Commission (FTC) regularly fights against fraudulent businesses that peddle miracle cures and other bogus products and services.
Some of the most common healthcare scams involve weight-loss products, impotence cures, and worthless HIV test kits. Others involve so-called medical discount cards that offer little to no savings on prescription drugs or medical services.
Protect yourself by researching before you buy any health-related product or service.
8. Payments In Advance
Scammers will try to offer you services like debt relief, but they’ll charge you an upfront fee. That’s a big red flag because it’s against the law to charge for these services in advance.
Other complaints in this category come from people who were promised that negative information would be removed from their credit reports or that they would be protected from future credit card debt. Again, anyone who asks for an upfront fee for these services is probably a scammer.
9. Fake Checks
There are many scams that have been around for years. Some of these include being overpaid for work or for a piece of property and being instructed to deposit the check and wire the balance back to the scammer. The bank will accept the check but, within days, will discover it is counterfeit and deduct the money from the customer’s account. In the meantime, the victim has wired real money to the scammer.
Other scams in this category include email scams from someone pretending to be a Nigerian prince who needs help transferring millions of dollars out of the country. These types of scams often prey on people’s good nature and generosity, leading them to believe they are helping someone in need when in reality, they are only lining the pockets of a scam artist.
10. Debt Management And Foreclosure Relief
As foreclosure rates remain near record lows, scammers are increasingly targeting the small number of homeowners who are in danger of losing their homes. Posing as legal experts, these operators promise to help desperate homeowners prevent foreclosure, but only after charging a large, upfront payment.
Similarly, some of these same scammers claim they can reduce or eliminate your credit card debt. They make empty promises and charge excessive fees, leaving consumers saddled with even more debt than before.
Don’t fall victim to these costly scams – educate yourself on the warning signs and protect your finances.
Clearone Advantage, Credit Associates, Credit 9, Americor Funding, Tripoint Lending, Lendvia, Simple Path Financial, New Start Capital, Point Break Financial, Sagemore Financial, Money Ladder, Advantage Preferred Financial, LoanQuo, Apply.Credit9, Mobilend