Identity theft has affected over 9.93 million people in 2008 according The Federal Trade Commission. The average cost to victims was $1,200 of out of pocket expenses. Identity theft is a $50 billion global business affecting one in six Americans in 2008 and only 35% of these victims knew how there identity was stolen. Prevention is the key to avoiding identity theft. Identity theft and online scams is the fastest growing crime in the world and is becoming more and more prevalent in our society. Avoiding these types of scams and theft is vital to remaining safe from this type of crime. Identity theft protection services can be a great way to prevent this type of crime from occurring before it occurs. Awareness of the different types of online scams can be a successful way to prevent fraud.

Identity Theft Scams

Some of the most common identity theft scams are called phishing or spoofing. These fraudulent scams send out fake emails that resemble emails from a particular bank. The links they provide in the emails take the person to a website that looks like that of the real bank but it is a fraudulent website. The person enters their private information such as their identification and password and credit card number. Some of these scams ask for social security information, which some victims unknowingly provide. The FBI recommends always verifying the source of an email and when in doubt never click on a link from an unsolicited email. Instead refer to your banking information to contact your bank and report the email.

• United State Department of Justice: Identity theft and identity fraud information
• University of Southern California Irvine Scam: Tax filing assistance for those victims of identity theft.
• Social Security Administration: Identity theft and social security information
• Identity Theft Resource Center: A non-profit organization that focuses on the prevention of identity theft.
• Identity Theft Prevention and Survival: A resource with information on preventing and overcoming identity theft.

Phishing Scams

Phishing scams are mass emails sent by scam artists that replicate the appearance of a recognized bank or credit card company. These websites ask the recipient to click on a link inside of the email that is made to look like the website of the bank or credit car but instead it is a fraudulent website. Once on this website the recipient is asked to enter their personal information such as social security or mother’s maiden name. The scam artists can then use this information to open credit cards in the victims name and other debt that will negatively affect a person’s credit. Never reply to unsolicited emails and always check with the company by calling the number that is on the physical bank statement or credit card.

• Federal Trade Commission Alert: How not to get hooked by a phishing scam.
• Anti-Phishing Organization: A working organization dedicated to wiping out internet scams and phishing.
• Federal Deposit Insurance Corporation: An article on Phishing Scams and who to report the scam to.
• Internal Revenue Service: Suspicious Mail or Email information and how to handle receiving.
• Center for Disease Control: Health related hoaxes reports of phishing scams.

Pyramid Schemes

Pyramid schemes are characterized by promising investors larges profits based on the recruitment of others. Sometimes this can include the selling of a product or service and other times it can be companies that advertise that they sell a product, when actually they only use this to hide their pyramid scheme. A common way to avoid pyramid schemes is to be aware of the characteristics of these schemes as mentioned and avoid supporting any company that closely relates to this.

• Pyramid Scheme Alert: An organization that gives consumer alerts to different pyramid schemes that exist.
• State of California Justice Department: Consumer information regarding pyramid schemes.
• NCL’s Fraud Center: A guide to not let pyramid schemes collapse on you.
• Pyramid Schemes and Recruiting Multilevel Marketing: How to identify a product based scheme.
• Butte District Attorney Office: Information on how to identify a pyramid Scheme.

Bad Investment Scams

Ponzi schemes are one example of a bad investment scam. A ponzi scheme is an investment opportunity that is essentially fake. The ponzi scheme organizer solicits investors and gives small payouts only after soliciting additional investors to pay the old investors. Each time payouts are made, they are made by soliciting new investors. They claim to have unrealistically high returns and this is a common characteristic. They can provide fake investment statements as well. The ponzi scheme generally collapses when it is difficult to recruit new investors. Thoroughly performing due diligence and checking the company’s registration with the Securities & Exchange Commission (SEC) and state licensing boards is a good way of preventing this type of scheme.

• The Time Share in Oregon is a Classic Bad Investment Scheme: Article about a timeshare affinity scams.
• Your Mortgage: Tips on avoiding bad investment schemes.
• Investor Watchdog: Article about legal investment schemes to watch out for.
• North America Securities Administrators Association: Madoff, A 21^st century ponzi scheme.
• FBI Common Fraud Schemes: A list of common schemes for fraud with a way to identify their characteristics.

Affinity Scams

Affinity Scams involve recruiting investors from unidentifiable groups such as religious or church groups or the elderly. The recruiters appear to be a peer or member of the groups so they have an unwritten trust. It is difficult for law enforcers to detect these types of scams because they are not reported until they collapse. Due to the personal nature of the relationships built, the scam artist is virtually undetectable to law enforcement. The only way to protect against this type of scam is to thoroughly check all investment opportunities through the SEC or governing investment body.

• Frauds and Scams: An investigator’s resource for identifying affinity scams
• South Carolina Watch Dog Reports: Article with great information on avoiding affinity scams.
• A Bill to Protect Seniors From Affinity Scams: Congressman Joe Baca introduces a new bill that protects seniors from financial scams.
• Pass Act of 2010: A bill that was passed by congress to protect seniors from affinity scams.
• Protect Your Pocket Series: A series of articles that Indiana State offers on their website for consumers.

Who To Report Scams To

Investment scams and identity scams can be reported to the Federal Trade Commission (FTC) If there is a doubt or thought that an investment opportunity may be a scam, it is a good idea to double check with the FTC. They will be able to provide information on how to be certain the investment is safe from fraud.

• Federal Trade Commission: Complaint assistance for those who have been a victim of a financial crime. This is where a person would file a complaint.
• Consumer Sentential Military: A secure database of complaints for those in the Armed forces. This is a watch list that can be accessed by anyone in the Armed forces.
• Securities and Exchange Commission Complaint Line: This is a place consumers can ask questions or file a formal complaint.
• Investopedia Dealing with Fraud: A resource with information on how to deal with financial fraud. 
• Internet Crime Complaint Center: An FBI backed crime center that takes complaints and investigates internet crimes such as identity theft and phishing.

Victim Support

There are numerous support groups for victims of financial crimes such as scams and identity theft. The local police and FTC can offer information about support groups for a specific financial crime or crimes that have been committed against a person. Sometimes there are lawsuits that can help validate justice. Getting support can be a good way to prevent this from happening again or getting involved in campaigns against this type of crime can help a person give help to others through awareness campaigns.

• Identity Theft Resource Center: Works with victims to resolve identity theft.
• Financial Industry Regulatory Authority (FINRA): Regulatory authority for the financial industry that advocates for consumers and can help offer victim support.
• Fraud Aid: Works on behalf of victim advocacy. Offers support to victims of fraud or scams.
• The Survivor’s Club: A guide to support for victims of fraud and support.
• Ponzi Scheme Victim’s Coalition: A network of victims of ponzi schemes.

Recommended Reading

Below is a list of recommended reading on financial and investment scams. Identify theft and avoiding identity theft are topics covered in this material.

• Crimes of Persuasion: How con artist can steal identity, money, and information.
• Scams & Swindles: A book about phishing, Spoofing and other ID theft scams.
• Scam Proof Your Life: This book offers many great ways to avoid scams and rip-offs.
• The Truth About Avoiding Scams: Practical information on how to avoid high tech and low tech scams.
• 50 Ways To Protect Your Identity and Your Credit: