What it is: Someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes. The government estimates that as many as 9 million Americans have their identities stolen each year.
Example: One of the largest cases of ID theft to date was the theft of millions of credit and debit card numbers from such retailers as TJX, BJ’s Wholesale Club, OfficeMax, and Sports Authority. In 2009, a computer hacker who was once a federal informant pleaded guilty to the break-in.
How to avoid it: Mostly by monitoring your credit cards for suspicious activity and taking some common-sense approaches to online purchasing. The FTC has a list of helpful tips.
What it is: We’re a nation of debtors. But there’s a right way, and a fraudulent way to collect a debt. Here’s a helpful list of common questions on debt collection that outlines the unethical methods. They include threats of violence, giving false credit information about you or using a false company name to collect a debt.
Example: In 2010, Pennsylvania authorities sued a company called Unicredit for using civil court subpoenas to summon consumers to fake court hearings that were used to intimidate consumers into providing access to bank accounts, making immediate payments or surrendering vehicle titles and other assets. The fake courtroom was said to contain furniture and decorations similar to those used in actual court offices, including a raised bench area where a judge would be seated.
How to avoid it: Besides not getting into debt? Know your rights. You can sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills, according to the government.
What it is: The FTC definition of Internet services is somewhat amorphous, but it generally includes any product or service fraudulently offered online. The mischief can range from phishing scams, where your password is fraudulently obtained through a website, to schemes that persuade you to wire money to criminals.
Example: So-called “spam king” Sanford Wallace is reportedly facing federal fraud charges for allegedly breaking into Facebook accounts and sending 27 million spam messages in 2008 and 2009. Wallace is said to have used a phishing scheme to steal usernames and passwords from victims and then used stolen credentials to post spam to victims walls, the U.S. Department of Justice said. He reportedly made money through online affiliate programs.
How to avoid it: Although there are many online scams, there are a few proven ways to keep them at bay. Don’t send money to strangers, ignore messages that ask you for personal information and make sure you know who you’re dealing with. Here’s another handy list of tips from the FTC.
The balance of these complaint categories account for just a few percent of complaints and can be avoided by taking similar precautions. I would add one final tip: Make sure you deal with a known company, not some fly-by-night operation. It lessens the chance you’ll be scammed.
Unfortunately, there’s no magic-bullet tip that can keep you out of harm’s way as a consumer. You need to carefully evaluate every single offer and run it through your own scam filter.
Otherwise, you could become another statistic. Here’s hoping you won’t.