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What are some common types of scams?

Scammers are constantly finding new ways to steal your money. You can protect yourself by knowing what to look out for.

Here are some of the most common types of fraud and scams. Learn what to watch for and what steps to take to keep yourself, your loved ones, and your money safe.

Common types of fraud and scams

Charity scams

A charity scam is when a thief poses as a real charity or makes up the name of a charity that sounds real in order to get money from you. These kinds of scams often increase during the holiday season as well as around natural disasters and emergencies, such as storms, wildfires, or earthquakes. Be careful when any charity calls to ask for donations, especially ones that suggest they’re following up on a donation pledge you don’t remember making.

What to do: Ask for detailed information about the charity, including address and phone number. Look up the charity through their website or a trusted third-party source to confirm that the charity is real. Learn more about how to avoid a charity scam.

Debt collection scams

Most debt collectors will contact you to collect on legitimate debts you owe. But there are scammers who pose as debt collectors to get you to pay for debts you don't owe or ones you’ve already paid.

What to do: Don’t provide any personal financial information until you can verify the debt. You can use this sample letter   to request more information. Read more about the warning signs.

Debt settlement and debt relief scams

Debt settlement or relief companies often promise to renegotiate, settle, or in some way change the terms of a person's debt to a creditor or debt collector. Dealing with debt settlement companies, though, can be risky and could leave you even further in debt.

What to do: Avoid doing business with any company that guarantees they can settle your debts, especially those that charge up-front fees before performing any services. Instead, you can work with a free or nonprofit credit counseling program that can help you work with your creditors. Learn more about the risks of working with a debt settlement or relief company.

Foreclosure relief or mortgage loan modification scams

Foreclosure relief or mortgage loan modification scams are schemes to take your money or your house, often by making a false promise of saving you from foreclosure. Scammers may ask you to pay upfront fees for their service, guarantee a loan modification, or ask you to sign over the title of your property, or sign paperwork you don’t understand.

What to do: If you are having trouble making payments on your mortgage, a HUD-approved housing counseling agency can help you assess your options and avoid scams. If you think you may have been a victim of a foreclosure relief scam, you may also want to consult an attorney. Learn more about mortgage loan modification scams.

Grandparent scams

If you get a call from someone who sounds like a grandchild or relative asking you to wire or transfer money or send gift cards to help them out of trouble, it could be a scam.

What to do: Read more about other ways to protect older adults from fraud and financial exploitation.

Imposter scams

Imposter scammers try to convince you to send money by pretending to be someone you know or trust like a sheriff; local, state, or federal government employee; or charity organization.

What to do: Remember, caller ID can be faked. You can always call the organization or government agency and ask if the person works for them before giving any money. Read more about imposter scams.

Mail fraud

Mail fraud letters look real but the promises are fake. A common warning sign is a letter asking you to send money or personal information now in order to receive something of value later. Examples of mail fraud might include notices of prizes, sweepstakes winnings, vacations, and other offers to claim valuable items.

What to do: The USPS has identified common postal or mail fraud schemes . If you’re a victim of mail fraud, you can file a complaint through the U.S. Postal Inspection Service  .

Money mule scams

A money mule is someone who receives and moves money that came from victims of fraud. While some money mules know they’re assisting with criminal activity, others are unaware that their actions are helping fraudsters.

Money mules may be recruited through online job or social media posts that promise easy money for little effort. They may also agree to help a love interest who they’ve met online or over the phone, by sending or receiving money, as part of a romance scam.

What to do: Don’t agree to receive or send money or packages for people you either don’t know or haven’t met. Also, be aware of jobs that promise easy money. Learn more about the red flags and what to do if you’re a victim of a money mule scam.

Money transfer or mobile payment services fraud

Con artists use money transfers to steal people’s money. If someone you don’t know asks you to send money to them, it should be a red flag. Scammers also use mobile payment services to trick people into sending money or merchandise without holding up their end of the deal. For example, a scammer may sell you concert or sports tickets but then never actually give them to you. Or a scammer might purchase an item from you, appear to send a payment, and then cancel it before it reaches your bank account.

Using mobile payment services with family, friends, and others you know and trust is the safest way to protect your money. You should also be cautious when people you do know ask you to send them money. Before you send money, verify that they are the ones requesting it.

What to do: Never send money to someone you don’t know. If you think you made a money transfer to a scammer, contact your bank or the company you used to send the money immediately and alert them that there may have been a mistake.

Mortgage closing scams

Mortgage closing scams target homebuyers who are nearing the closing date on their mortgage loan. The scammer attempts to steal the homebuyer's closing funds—for example, their down payment and closing costs—by sending the homebuyer an email posing as the homebuyer's real estate agent or settlement agent (title company, escrow officer, or attorney).

What to do: These schemes are often complex and appear as legitimate conversations with your real estate or settlement agent. When you’re about to close on your home, take several steps, including identifying trusted individuals to confirm the process and payment instructions and writing down their names and contact information so you can reach out to them directly. Learn more about what steps you should take to help protect your closing funds.

Lottery or prize scams

In a lottery or prize scam, the scammers may call or email to tell you that you’ve won a prize through a lottery or sweepstakes and then ask you to pay an upfront payment for fees and taxes. In some cases, they may claim to be from a federal government agency.

What to do: Avoid providing any personal or financial information, including credit cards or Social Security numbers, to anyone you don’t know. Also, never make an upfront payment for a promised prize, especially if they demand immediate payment. Learn more about lottery or prize scam red flags.

Romance scams

A romance scam is when a new love interest tricks you into falling for them when they really just want your money. Romance scams start in a few different ways, usually online. Scammers may also spend time getting to know you and developing trust before asking you for a loan or for access to your finances.

What to do: Be smart about who you connect with and what information you share online. Don’t share sensitive personal information, such as bank account or credit card numbers or a Social Security number, with a new love connection. Learn more about how to avoid romance scams.

Common payment methods used by scammers

Never send money to someone you don’t know. Scammers use a variety of ways to collect money from you, including:

  • Wire transfers
  • Person-to-person payment services and mobile payment apps
  • Gift cards

Learn more about common frauds and scams

Reporting fraud and scams

If you’re a victim of a scam, you can report it to the authorities by: