Types of fraud and how to address them

Common types of fraud and scams

There are many types of fraud and scams that require attention, especially when shopping online or sharing personal information through digital channels. Phishing — the act of sending emails or messages that imitate legitimate communications to steal sensitive information — is one of the most widespread fraudulent practices today. In addition to this risk, consumers may also encounter false loan offers, fake rental or vehicle sale listings, fraudulent charity appeals designed to exploit people’s goodwill, fake debt collection attempts, misleading debt settlement or reduction schemes, scams related to money transfer services or mobile payments, manipulations during the closing process of mortgage loans, and finally lottery or prize scams that promise winnings that do not actually exist. Faced with such a broad landscape of threats, staying alert and protecting both personal and financial information at all times is essential.

Online shopping

This type of fraud occurs when consumers purchase products from fraudulent websites or fictitious sellers operating on legitimate platforms. In many cases, the products never arrive, or the items delivered are completely different from those described. There are also websites designed to mimic real online stores for the sole purpose of collecting credit card information. The user believes they are buying in a safe environment, but in reality they are providing sensitive data to individuals intent on committing fraud.

How to address it

To reduce the risk of falling victim to online shopping fraud, it is crucial to verify the authenticity of the website and read reviews from other customers. Use payment methods that offer buyer protection and avoid storing card information on unfamiliar sites. Also, make sure that online transactions are made over a secure connection, avoiding public or unencrypted networks.

Phishing

Phishing includes a collection of techniques designed to get victims to reveal private information through messages that appear to come from trusted sources, such as banks, well-known companies, or popular digital services. Fraudulent emails often contain links directing users to fake pages that closely resemble official websites, where personal or banking information is requested. The visual similarity between these fake sites and real ones makes the scam difficult to recognize until damage has already occurred.

How to address it

To protect yourself from phishing, avoid clicking on links or downloading attachments from suspicious emails. Always confirm the authenticity of a message by contacting the institution directly through official channels. Using up-to-date security software adds an additional layer of protection against malware and other digital threats. Enabling two-factor authentication further reinforces security, even if login credentials are compromised.

Fake loans

Fraudsters frequently lure victims with highly attractive loan offers. They promise fast approvals, conditions that legitimate institutions rarely provide, and ideal solutions for individuals with difficult credit histories. Behind these appealing claims is usually the intention to collect advance payments or obtain sensitive personal information that will later be misused. Scammers adopt professional language and present themselves as trustworthy representatives to convince victims to take an initial step involving either a financial commitment or disclosure of personal data.

How to address it

To avoid this type of scam, maintaining a cautious and critical mindset is essential. Offers that appear too good to be true should always raise suspicion, especially if upfront payments are required. Research the organisation offering the loan, read reliable reviews, and verify official registrations. Never share personal or financial information unless the legitimacy of the entity has been clearly confirmed.

Fake rentals or vehicle sales

Fraudulent listings for rental properties or vehicles at unusually low prices are a common tactic used by scammers to attract potential victims. They typically use genuine photos — often stolen from real listings — along with detailed descriptions to make the offer appear credible. Once a prospective buyer shows interest, the scammer asks for a deposit or an upfront payment, using excuses such as high demand, urgent circumstances, or temporary unavailability to view the property or vehicle.

How to address it

The safest approach is to verify the existence of the property or vehicle in person before making any payment. Always request formal documentation or a written agreement. If anything seems unclear, consider consulting a real estate or automotive professional. Exercising caution is the most effective way to avoid losses.

Charity scams

After natural disasters, tragic events, or other emergencies, it is common to see fraudulent fundraising campaigns emerge. These scams exploit public empathy and often mimic well-known charitable organisations by using copied logos, names, and visual elements that appear legitimate.

How to address it

To avoid being deceived, donate only to recognised organisations and verify their legitimacy through official platforms or NGO databases. Avoid responding to unsolicited messages or emails requesting urgent donations. Always confirm the credibility of the organisation before transferring any money.

Debt collection scams

Another widespread scam involves fraudsters posing as debt collectors. They use aggressive or intimidating tactics to pressure victims into paying debts that do not exist. These scammers rely on stolen, partial, or completely fabricated personal information and may threaten legal action to force immediate payment.

How to address it

Request written proof outlining the alleged debt and contact the original creditor to verify the details. Never give in to pressure, especially when the approach is hostile or suspicious. Knowing your rights is essential — consumer protection laws forbid abusive collection practices. If harassment or threats occur, seek legal advice.

Debt settlement or reduction scams

In these schemes, fraudsters present themselves as financial advisors or companies specialising in debt consolidation. They promise quick solutions to reduce or eliminate debt but require an upfront payment. Such promises are often unrealistic and framed as “miracle solutions”.

How to address it

Any organisation requesting advance payment to “fix” your debt should be considered suspicious. Always research the company's reputation and check for official complaints or negative records. Consult consumer protection agencies and consider speaking with a certified financial professional before committing to any service.

Fraud in money transfer services or mobile payments

Many scams rely on urgent requests for money transfers. Fraudsters invent emergency situations, claim that prizes or opportunities require upfront payments, or create scenarios that appear to justify immediate action. Because these methods allow funds to move quickly, scammers ensure the money disappears before victims realise they’ve been deceived.

How to address it

Never send money to unknown individuals, and always verify the identity of anyone requesting payment. Be particularly cautious with unexpected messages or urgent payment requests. Remember: legitimate companies or real contests will never ask you to pay in order to receive a prize.

Mortgage closing scams

During the closing process of a home purchase, fraudsters may attempt to manipulate communications to redirect closing funds into fraudulent accounts. They take advantage of the complexity and stress of this stage, sending forged payment instructions that appear authentic.

How to address it

Before transferring any money related to a mortgage closing, always confirm payment instructions directly with your lender or real estate agent. A simple verification can prevent substantial financial losses.

Lottery or prize scams

Some victims receive notifications claiming that they have won a prize, lottery, or major reward. To claim the supposed winnings, they are asked to pay “administrative fees” or “processing costs.” After the payment is made, the scammers disappear without providing anything in return.

How to address it

Remember that legitimate prizes never require payment to be claimed. Always verify payment-related information using official contact details you already trust, not those included in suspicious messages. Examine email addresses carefully to identify signs of impersonation or falsification.

Common payment methods used by scammers

Scammers prefer payment methods that are difficult to trace and allow them to move funds quickly and discreetly. Once transactions are completed, victims often face major obstacles when trying to recover the lost money.

Bank transfers

Bank transfers are one of the most commonly used methods in fraud cases. Once money is transferred, reversing the transaction becomes extremely difficult. Many scammers use fake or stolen identities to open bank accounts and receive funds. The speed at which transfers are processed allows them to move money quickly before any intervention is possible.

Credit and debit cards

Fraudsters acquire card details through phishing, skimming, or fake payment websites. With this information, they make unauthorised purchases or create cloned cards. For victims, disputing fraudulent charges may require time, documentation and verification processes initiated by financial institutions.

Cash payments

Some scams request cash payments, either in person or through services that facilitate sending physical money. These transactions leave almost no trace, making it difficult to identify those responsible. Scammers may also use intermediaries to collect the cash, adding another layer of anonymity.

Cryptocurrencies

Cryptocurrencies such as Bitcoin have become popular among fraudsters due to their anonymity and limited traceability. Once funds are transferred to a digital wallet controlled by scammers, recovering the money is nearly impossible. Additionally, the volatility of cryptocurrencies may increase losses if the value fluctuates rapidly.

Reporting frauds and scams

If you become a victim of fraud, it is crucial to act quickly. Keep all relevant documentation: screenshots, emails, transaction evidence and any communication exchanged with the scammer. Contact your bank or financial institution as soon as possible; in some cases, there may still be time to block or reverse a transaction.

File a report with local law enforcement or the appropriate authority in your country. Provide all collected evidence to support the investigation. Notify relevant regulatory bodies as well, as they monitor fraudulent activity and support prevention efforts. Finally, alert the platforms where the scam occurred — social networks, online marketplaces, classified ad sites or payment services — so they can intervene and prevent others from being affected.

Staying vigilant, keeping your devices up to date, protecting your personal information and verifying the legitimacy of websites or services before making payments are essential practices to reduce the risk of fraud.