Two common examples of fraud

Two common examples of financial fraud are fake check schemes and phony lenders.

Fraudulent payments (fake check schemes)

There are many variations on the fraudulent payment scam, but there’s a typical pattern: someone gives you money (via an electronic payment, check or money order) and then asks you to send cash in return. When it eventually becomes clear that the person’s story’s fake and their payment fraudulent, you are responsible for the money you sent them. Examples of this scam include:

  • Work-at-home: A company promises you easy money working at home. Then they ask you help them by accepting a payment and then sending them money (minus your pay) via an electronic payment or money order.
  • Overpayments: You advertised an item for sale and the buyer “accidentally” sends you more than the price. The buyer then asks you to deposit their payment and send them the extra amount.
  • Sweethearts: A special someone you’ve met online promises to come to the U.S. to be with you. They ask you to send them money directly or to deposit their check or money order and send them the cash to cover their travel expenses.


Phony lender

You receive a notice that the lender who collects your mortgage payment has sold or transferred your service to another lender. But it turns out that the notice is a fake, and you start sending your mortgage payments to a phony lender!

Remember: under federal law, a loan servicer must notify at least 15 days before any such transfer. Their “goodbye letter” must include all of the contact information and start date for the new servicer. Contact your original lender to confirm that the transfer of service is legitimate.

Other variations on this scam include being charged phony taxes or fees.

Older people can be at increased risk of being taken advantage of by family, friends, or strangers.

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