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Financial fraud

Reviewed by Apoorva | Updated on Oct 05, 2020

Catalogue

Introduction

Financial fraud happens when someone deprives you of your money or otherwise harms your financial health through misleading, deceptive, or other illegal practices. This can be done through a variety of methods such as identity theft or investment fraud.

What is Financial Fraud ?

Most victim compensation programs do not cover the money lost to fraud or fraudulent schemes. You must check for your specific state laws regarding victim compensation. Civil justice may be the only legal option to recover lost money.

Why is Financial Fraud important?

It is important to report the crimes to the appropriate agencies and law enforcement as soon as possible irrespective of the type of financial fraud. Fraudulent charges should also be disputed or cancelled as soon as they are discovered as well. Furthermore, victims should collect documentation related to the crime, such as bank statements, credit reports, tax form from current and previous years, and continue to file important information throughout the reporting process.

Types of Financial Crimes:

  1. *Identity Theft: *Someone steals your personal financial information, such as credit card number or bank account number, to make fraudulent withdrawals from your account. Sometimes people will use the information to open credit or bank accounts and leave the victim liable for all the charges. Identity theft may lead to damaged credit rating, bounced checks/denied payments, and being pursued by collection agencies.
  2. Investment Fraud This type includes selling investments or securities with false, misleading information. It could be false promises, hiding facts, and insider trading tips.
  3. Mortgage and Lending Fraud A third-party may open a mortgage or loan using your information or using false information. In another case, lenders may sell mortgage or loans with inaccurate information, deceptive practices, and other high pressure sales tactics.
  4. Mass Marketing Fraud The fraud is committed through mass mailings, telephone calls, or spam emails. It also includes fake checks, charities, lotteries, honor society invitations, and more. These modes are used to steal personal financial information or to raise contributions to fraudulent organisations.

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