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Financial fraud happens when someone deprives you of your money, capital, or otherwise harms your financial health through deceptive, misleading, or other illegal practices. This can be done through a variety of methods such as identity theft or investment fraud.
For all types of financial fraud it is important to report the crimes to the appropriate agencies and law enforcement as soon as possible. Fraudulent charges should also be disputed or cancelled as soon as they are discovered as well. Furthermore victims should gather all documentation related to the crime (e.g. bank statements, credit reports, tax form from current and previous years) and continue to file important information throughout the reporting process.
Unfortunately most victim compensation programs do not cover money lost to fraud or fraudulent schemes. Check your specific state laws regarding victim compensation to make sure. Civil justice may be the only legal option to recover lost money.
For more detailed information and helpful resources regarding financial crime, visit our Financial Crimes Resource page
Common Types of Financial Crimes
For a detailed overview of common financial crimes and action steps for reporting please see our Taking Action guide to financial crimes ]
Identity theft: Someone steals your personal financial information (e.g. credit card number, social security number, bank account number) to make fraudulent charges or withdrawals from your accounts. Sometimes people will use the information to open credit or bank accounts and leave the victim liable for all the charges.
Identity theft often results in damaged credit rating, bounced checks/denied payments, and being pursued by collections agencies.
- Unfamiliar charges or purchases on your credit card or bank account statements.
- Perpetrators posing as a bank, government office, or official institution in order to steal your personal financial information
Investment Fraud: Selling investments or securities with false, misleading, or fraudulent information. This may be false/grandiose promises, hiding/omitting key facts, and insider trading tips among other things.
- Ponzi schemes: Investment fraud scheme where returns are paid to investors using new capital from newly recruited investors as opposed to interest and profits from legitimate investments.
- Pump & Dump schemes: Stock traders or stock brokers purchase a stock at a low value then entice other clients to buy the same stock in order to inflate its price. Those who bought the stock at its low value then sell their shares and pocket the profit.
- Selling a business or real estate opportunity investment with bad, inaccurate, or false information. Also includes omitting or hiding information that is important investment decision.
Mortgage and Lending Fraud: Someone else (often a friend or family member’s) opens a mortgage or loan using your information or using false information
Lenders selling you mortgage or loans with inaccurate information, deceptive practices, and other high pressure sales tactics.
- Mortgage and loan modification services
- Predatory lending practices such as:
- Unjustified risk-based pricing
- Single-premium credit insurance
- Failure to present the loan price as negotiable
- Failure to clearly and accurately disclose terms and conditions
- Short-term loans with disproportionately high fees
- “Bait and switch” contract negotiations
- Servicing agent and securitization abuses
Mass Marketing Fraud: Often committed using mass mailings, telephone calls, or spam emails. Mass marketing fraud typically involves fake checks, charities, sweepstakes, lotteries, and exclusive club or honor society invitations. These offers and letters are used to steal your personal financial information or solicit contributions and fees to fraudulent organizations.
- Fake charity donation solicitations
- Exclusive Club or Honor Society invites. Usually invitations are sent through mail or emailed and promise membership in a particular organization for a small fee or setting up a recurring charge with no discernable service provided. Also used to steal personal financial information.
- Award or Prize notifications. Also seen on the internet as “10,000th Visitor” type notifications. Usually ask for personal financial information or fee to be paid in order for prize to be delivered or award to be made official. If you do not remember applying or entering a competition for the award or prize being given to you it is probably fraudulent.
- Phone calls claiming to be from the government, your bank, or other “official” agency
How to Report Financial Fraud
For all types of financial crime you should contact at least the following agencies:
- Local police or law enforcement to report the crime and obtain a police report
- Your bank(s) to report the crime and explore any possible resources the bank has available
- FTC Complaint Assistant-[www.ftccomplaintassistant.gov]
- Local District Attorney
- Federal Law Enforcement local office [www.fbi.gov/contact-us/field]
After contacting these resources, you can also contact these crime specific resources to make a report:
1. Crime: Medical Identity Theft
Service Agency: Health and Human Services
2. Crime: Social Security Identity Theft/Fraud
Service Agency: Social Security Administration Fraud Hotline
3.Crime: Tax Identity Theft
Service Agency: IRS Identity Protection Specialized Unit
4. Crime: Fraud by broker or financial firm
Service Agency: Financial Industry Regulatory Authority (FINRA)
5. Crime: Futures Fraud
Service Agency: National Futures Association
6. Crime: Securities/Investment Fraud
Service Agency: Securities and Exchange Commission (SEC)
7. Crime: Mortgage Loan Modification Fraud
Service Agency: PreventLoanScams.org
8. Crime: Lending Fraud
Service Agency: Federal Trade Commission (FTC)
9. Crime: Internet Based Fraud
Service Agency: Internet Crime Complaint Center (ic3)
10. Crime: Internationally Based Fraud
Service Agency: State Department
11. Crime: Mail Fraud
Service Agency: US Postal Inspection Service
12. Crime: Consumer Scams
Service Agency: Better Business Bureau
Contact the DC Victim Hotline by phone at 1-844-443-5732 or by chat for more information or assistance in locating services that can help you or a loved one after experiencing financial fraud.