What is Fraud?

We hear about fraud a lot these days—financial fraud, mail fraud, check fraud, credit card fraud, health care fraud the list goes on and on.  While the method may vary, fraud is basically a wrongful or deliberate deception by someone to secure unfair or unlawful personal gain, usually money or property.

According to Donald R. Cressey, the creator of the Fraud Triangle, the people who commit fraud do so for three reasons:

  1. Rationalization – justification for being dishonest
  2. Opportunity – the ability to carry out the fraud
  3. Pressure – the motivation for committing the fraud

For the purposes of the article, we’ll focus on opportunity.

It is up to us, as consumers, to not present fraudsters with the opportunity to commit fraud against us.  How do we go about protecting ourselves?   Here are some tips on how to become a smarter consumer and avoid fraud:

Guard your personal information with your life.
Fraudsters may call or e-mail pretending to be from a company you normally do business with and claim that they need to update your personal information.  Most of the companies you do business with will NEVER call or e-mail to get that information.  If you suspect that the call or e-mail may be legitimate, phone the company at the number you have for them (not the one given to you over the phone).

Always shred any paperwork that has any of your personal information on it. 

Mail your outgoing mail at a secure mail box.

Keep yourself safe online.
Do not send sensitive information over e-mail unless it is through a secure site.  A secure site will begin with https://.  If there is not an “s” in that address, then it is not a secure site.  Sometimes your browser will let you know if the information you are sending is encrypted.   Remember that just because you are sending the information on a safe site, the company you are sending it to may not keep it safe once they get it. Check the websites of that company to see how your information is safeguarded once they receive it.

Know who you are dealing with.
Before you do business online, in person, or over the phone, do your research to verify who you’re doing business with.  Check with the Better Business Bureau to see if the company is listed on their site.   If they are, what is their rating? Are there complaints filed against them?

Use your credit cards when you shop online.
Unlike debit cards, credit cards do not have direct access to your cash.  It is also easier to dispute the charges on a credit card.  Remember to always check your credit card statements on a monthly basis.  If you have a charge on your card that doesn’t belong to you, you only have 60 days to dispute it.

Never let someone pressure you into buying something or donating money to a charity.
Legitimate companies and charities will be happy to give you the time it takes to make a decision.   If they are too pushy or try to make you do something “right now”, then it is better to step away.  Once again, always research the charity you are giving money to before you make that monetary commitment.

If it seems too good to be true, it probably is.

American consumers are bombarded by offers that sound too good to be true. These offers come door-to-door, through the mail, over the phone and by e-mail.  The Nigerian Letter or “419” Scam offers you the “opportunity” to share in a percentage of millions of dollars if you help them transfer those dollars out of the country. The phrases “you must act ‘now’ to take advantage of this incredible offer”, or “you’ve won a ‘free’ gift, vacation, or prize” are usually warning signs that someone is attempting to separate you from your hard-earned money.

Here are some important things to remember about lottery offers:

  1. You are not going to win a lottery that you did not enter. It’s also highly unlikely that a long lost, forgotten relative made you a beneficiary to his or her fortune.
  2. Think twice about responding to an offer via e-mail that is not professionally written, (spelling, proper use of capitalization, correct word usage).
  3. Never respond to an offer you don’t thoroughly understand.
  4. You should never have to pay money to get money.

Pull your credit report on an annual basis.
The website www.annualcreditreport.com will give you one free credit report (including all three credit bureaus) annually and it is a safe site.  It will ask for a credit card number and sign you up for the credit reporting (which you can cancel right away). Or, you can go to www.freecreditreport.com which is run by Experian.  This is a safe site as well, but will only give you the Experian report.  Check to make sure that everything on that credit report belongs to you.  If you notice items on there that aren’t yours, contact the credit bureau.  You may also want to put a freeze on your credit.

If you are doing everything you can to protect yourself from fraud and it still happens to you, there are a few things you can do.  The first thing you need to do is contact your bank or credit card company.  Let them know what is going on.  They may advise you to shut down your debit card, or possibly your whole account.

Depending on how the fraudster got to you, you might need to shut off your computer and unplug it from the wall then take it to a computer repair shop.   If the fraudster got into your computer, your best bet is to change all of the passwords on your accounts (online banking, e mail, shopping, etc).

If you are actually out money, you should go to the police and file a report.

In some cases of fraud, you get to decide whether to participate or not.  If you are contacted by someone and they are asking personal questions, you have every right to say that you will contact the company to make those updates.  If you are contacted by e-mail, you don’t have to click on the website or attachment.  If you are selling something on E Bay and someone wants to send you a check for more than your item is worth, you can say you are not interested and move on.

Hopefully this article has given you some tips on preventing fraud from happening to you.

If you have any questions or need help, please feel free to contact me at kjohnson@kitsapbank.com

 

Kim Johnson
Certified Fraud Examiner