Types of Fraud

Fraud is a criminal act defined as intentionally deceiving an individual or organization for personal or financial gain. According to government agencies including the Federal Trade Commission and the Social Security Administration, one particular type of fraud is among the fastest growing crimes in the nation: identity theft.

With technology constantly evolving, cyber criminals have more opportunities to access your personal information on the Internet and commit identity theft. Identity theft can also be committed by phone or mail.

How to tell one type of fraud from another

Here’s a look at different types consumers, businesses and government agencies may encounter:

 

 

Bank Fraud
  • Bank Fraud: This involves illegally or fraudulently obtaining money, credit, assets or other property from a financial institution. It includes crimes such as impersonation, stealing someone’s bank account or credit card information and stealing, altering and forging checks.

 

 

 

 

Credit Card Fraud
  • Credit Card Fraud: A form of identity theft in which a criminal unlawfully takes another person’s credit card information and uses it to make purchases or obtain cash advances. The two primary types are account takeover – taking over someone’s existing credit card account and changing their billing address to obtain a new card – and application fraud, which involves opening an account in another person’s name without their knowledge.

 

 

 

Health Care Fraud
  • Health Care Fraud: Includes health insurance, medical and drug fraud. It involves companies or individuals deceiving a health insurance company or a government-run health care program, such as Medicare, through various fraudulent acts. Billing for services not rendered, submitting false claims and prescribing unnecessary drugs or procedures are common examples.

 

 

 

Insurance Fraud
  • Insurance Fraud: Occurs when someone illegally obtains a benefit or advantage which they are not eligible for or denies a benefit that someone is entitled to. Types include health care, life or automobile insurance. Insurance scams can range from soft fraud, such as exaggerating a claim, or hard fraud, such as deliberately planning a loss, theft or accident.

 

 

 

Loan Fraud
  • Loan Fraud: Similar to bank fraud, in which someone attempts to obtain a loan for more money than they legally qualify for by intentionally providing false or incomplete information on a loan application.

 

 

 

 

Mail Fraud
  • Mail Fraud: This has been a federal crime in the U.S. for more than 100 years. When someone uses the Postal Service or a private or commercial interstate carrier to intentionally defraud or carry out a scheme, they are committing this crime. A criminal may try to scam someone out of money or property under false pretenses by communicating through mail services or take someone else’s mail to steal their personal information.

 

 

 

Social Security Fraud
  • Social Security Fraud: There are several different ways criminals participate in Social Security scams. Purposely providing false statements or failing to report health, employment or marital status to collect benefits constitutes fraudulent Social Security activity. Another example includes mishandling funds as well as selling legitimate or counterfeit Social Security cards.

 

 

 

 

Tax Fraud
  • Tax Fraud: Deliberately trying to deceive the Internal Revenue Service for monetary gain or to avoid paying taxes. Examples include filing a false tax return or stealing someone’s tax information. Don’t confuse tax fraud, which involves deliberate deception, with simple negligence such as filing a tax return with an accidental or careless error.

 

 

 

 

It’s important to be aware of the different types of fraud so you can report suspicious activity to the appropriate authorities. Awareness also means you’re less likely to become a victim yourself.