Scam vs Fraud

Is it fraud - or a scam?
January 8, 2024

Most people use fraud and scam as interchangeable terms, but there is a difference between the two.

Basically, fraud refers to various types of criminal offenses while a scam is a type of fraud.

Legally, identity theft and other types of fraud are serious criminal offenses that can be investigated and prosecuted. Scams typically are not because it is difficult, if not impossible, to identify and catch the culprits.

Financially, though, both are forms of theft. Scams are theft of funds with your permission or knowledge, while fraud is theft without your permission or knowledge.

With fraud, your personal information is obtained dishonestly without your knowledge through such means as identity theft, ATM skimming or data breaches. With a scam, you have been tricked into voluntarily providing your personal information – credit or debit card number, log-in credentials, social security number, etc.

Fortunately, fraud and scams are alike in the ways you can safeguard against them.

WHAT CAN YOU DO?

- Educate: Learn how to spot red flags and how to avoid being manipulated.

- Verify: Always confirm the legitimacy of requests for your personal information or money.

- Question: Does this deal sound too good to be true?

- Research: Look for the company online – you can also search for “company name scam”.

- Monitor: Check transactions daily with digital banking, set alerts, review your statements.

IF YOU HAVE FALLEN VICTIM

- Contact your financial institution: Report suspicious transactions immediately to your bank, credit union or credit card provider.

- Report: You should report fraud and scams to the FTC.

- Monitor accounts closely: Regularly check for suspicious activity and update your passwords and security settings.

Here are some resources that may be helpful in identifying and avoiding scams.