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Scam artists are finding creative ways to deceive consumers for personal gain. In 2025 alone, 18 million people fell victim to identity fraud losses, according to Javelin Strategy & Research. Total fraud losses came in at $27.3 billion. While there's no shortage of fraudsters out there, there are steps you can take to protect yourself—and things you can do now if you've been victimized.
What Is Fraud?
Fraud happens when someone intentionally deceives others by misrepresenting themselves or concealing meaningful information for financial gain. That can happen through no fault of your own.
Example: Someone you trust could steal your credit card number to rack up fraudulent charges, or steal enough information about you to open up a credit card in your name. This is called familiar fraud (and children are a common target).
How Does Fraud Work?
Fraud isn't always easy to spot, especially if you're dealing with a scam artist who's mastered the art of deception. Every case is different, but here are "the 4 Ps" the federal government says to watch out for:
- Pretend: The fraudster will likely pretend to be with a trusted organization, like a government agency, nonprofit or bank.
- Problem: They'll usually present a false issue that needs to be resolved, such as a problem with your account or an issue involving a government agency or local police.
- Pressure: The scam artist may put pressure on you to take immediate action. In some cases, they may use threats to increase the sense of urgency.
- Pay: To resolve the "problem," you may be asked to provide personal information or offer payment through specific methods like gift cards, money orders or online transfers. This is a serious red flag of fraud.
In reality, there are many ways that fraud can unfold (some more obvious than others).
Types of Consumer Fraud
Most financial fraud cases are also scams because the victim is tricked into sharing their personal or financial information—or sending money directly to a fraudster. Some of the most common financial scams include:
- Imposter scams: A con artist pretends to be somebody else to persuade you to disclose sensitive information or send them money. They often impersonate someone who has authority or has something you want, such as a police officer, IRS agent, TV or internet provider or delivery person. Romance scams also fall into this category.
- Online shopping scams: Scam artists can create fake websites or list products or services on online marketplaces with no intention of delivering what they sell. They may even use a stolen credit card to purchase the item you're buying from them; something known as triangulation fraud.
- Employment scams: Fraudsters can create listings for fake jobs and collect applicants' personal information. Some might ask you to buy training materials or supplies that never come through.
- Investment scams: This is when a scammer tries to trick you into investing in cryptocurrency, real estate, gold, art, stocks or bonds that aren't worth as much as they're described. In some cases, they may try to get you to pay for worthless training programs or advice.
- Sweepstake and prize scams: If you receive a notice that you've won a prize or lottery, proceed with caution. A scam artist may try to persuade you to pay a fee to collect your winnings.
- Travel scams: Scammers can create fake travel websites only to take your money and run. Some might contact you directly saying you've won a free trip but need to pay a booking fee to claim it.
- Timeshare scams: This is when a scam artist poses as a third-party timeshare representative to collect "fees and taxes" related to their timeshare. Some may also pose as law firm employees or government officials to extract as much cash as they can.
- Health care scams: This can be a medical provider who defrauds patients or someone who commits medical identity theft. The latter is when someone uses your name, Social Security number, health insurance policy number or Medicare number to receive medical services or products.
- Advance-fee credit scams: This occurs when fraudsters represent themselves as lenders, offering bogus loans or credit cards that require an upfront fee to apply.
- Overpayment scams: This is a common online marketplace scam where an interested "buyer" deliberately overpays, then asks you to send back the difference. Afterward, the original payment is reversed once your bank discovers the fraud. By that point, you might not be able to get your money back.
If a scam artist gets their hands on your personal information, like your Social Security number or passwords, they could use that sensitive data to take over your accounts or open new accounts in your name.
- Account takeover fraud: Someone hacks one of your accounts to withdraw money, make purchases or redeem credit card rewards.
- New account fraud: Someone uses your personal information to apply for a new account in your name. For example, they might open a new credit card, make large purchases, then leave you stuck with the bill.
The following types of fraud were the most prevalent in the second quarter (Q2) of 2026.
The Most Common Types of Fraud
| Type of Fraud | Number of Reports | Median Amount Lost | Total Amount Lost |
|---|---|---|---|
| 1. Imposter scams | 212,371 | $764 | $869.4 million |
| 2. Online shopping and negative reviews | 101,553 | $118 | $120.5 million |
| 3. Business and job opportunities | 29,018 | $1,500 | $117.8 million |
| 4. Investment-related scams | 22,628 | $7,000 | $1.15 billion |
| 5. Prizes, sweepstakes and lotteries | 16,687 | $500 | $62.2 million |
| 6. Travel, vacations and timeshare plans | 16,339 | $557 | $68.8 million |
| 7. Internet services | 15,855 | $240 | $27.3 million |
| 8. Telephone and mobile services | 15,144 | $263 | $14.6 million |
| 9. Health care | 13,531 | $300 | $16.2 million |
| 10. Advance-fee credit scams | 10,462 | $676 | $20.9 million |
Source: Federal Trade Commission; numbers as of Q2 2026
Learn more: Most Common Types of Fraud
Identity Theft vs. Scams
Scams and identity theft are two different types of fraud.
| Identity Theft | Scams | |
|---|---|---|
| Definition | Involves someone using your personal information to impersonate you | Involves your active participation |
| Goal | To steal money, open new accounts, file fraudulent tax returns and more | To get you to provide personal information or send money |
| Impact | It can lead to financial losses, debt in your name and credit damage | You could unknowingly send large sums of money to a scam artist or provide personal information that can be sold to others or used to commit identity theft |
| Recovery | Involves contacting credit card companies, lenders and banks that were compromised, reporting the identity theft to the Federal Trade Commission (FTC) and police, and considering a credit freeze or fraud alert. You'll also need to monitor your credit reports and dispute any fraudulent charges that may arise. | It can be difficult (or impossible) to get your money back from a scammer. You have the right to opt for a credit freeze or fraud alert to avoid future identity theft if your personal information was compromised. You can also monitor your credit for fraudulent activity, and you have the right to dispute any inaccurate information. |
How to Avoid Fraud
Unfortunately, scam artists are getting more and more creative, especially with the rise of AI scams. It isn't always possible to avoid fraud, but here are some steps that can help reduce the chances.
- Be on guard when people contact you. An unexpected call, text, social media message or email might be the start of a scam. Whether the message is intimidating or enticing, it's safer to look up the organization's information on your own and contact them directly—instead of responding to the person contacting you.
- If it seems too good to be true, it likely is. That may be a discounted sale price or an unexpected winning lottery ticket. As a consumer, do your due diligence to confirm these types of offers before engaging.
- Ignore overpayments. If someone says they accidentally sent you too much money, that's a red flag. If you think it's legitimate, you can always suggest they cancel their original payment.
- Avoid using payment methods that are difficult to reverse. It's common for scammers to request to be paid in gift cards, wire transfers, money orders, cryptocurrency or payment apps. If you do so, it can be difficult to get your money back once it's gone.
- Add fraud alerts to your credit reports. You have the right to add a fraud alert to your credit reports for free. This instructs lenders to take extra steps to verify your identity before opening a new account in your name.
- Freeze your credit. Freezing your credit means lenders will not be able to view your credit reports until you unfreeze it. That can thwart a fraudster trying to steal your identity.
- Use strong and unique passwords. Create new passwords for every financial account, and make sure they aren't related to other passwords. A password manager can simplify the process.
- Enable multifactor authentication. Multifactor authentication (MFA) requires you to take an additional step to verify your identity before you can log in to your account. That can help box out identity thieves.
What to Do if You Are a Victim of Fraud
If you've already experienced financial fraud, these steps may help prevent further damage. In some cases, it might be possible to recoup some or all of your losses.
- Report the fraud to the authorities. File a police report and report the fraud to the FTC at ReportFraud.ftc.gov. The FTC can provide you with a personalized action plan.
- Alert any related companies. That includes any merchants, banks, credit card companies or lenders that were involved in the fraud.
- Scan your devices for malware. A fraudster could have gotten access to your accounts after installing malware on one of your devices. Consider running an antivirus scan and installing the latest security updates going forward.
- Update your passwords. If the fraud involved any online accounts, be sure to change your passwords ASAP.
- Consider a fraud alert or credit freeze. Taking this extra step can help safeguard your credit health in the future.
Frequently Asked Questions
What Is Wire Fraud?
Wire fraud is when someone uses electronic communications, like phone calls, texts or emails, to deceive people for financial gain. Phishing emails fall into this category of fraud.
What Is Insurance Fraud?
Insurance fraud involves lying or misrepresenting insurance information. For example, a car insurance policyholder may fabricate or exaggerate damage from an accident to receive a larger insurance payout.
What Is Tax Fraud?
Tax fraud is when a person or business intentionally evades their tax obligation. This is different from tax identity theft, which happens when someone uses your personal information to file a fraudulent tax return—and collect your tax refund.
What Is the Most Common Type of Fraud?
The most common type of fraud involves imposter scams, according to the FTC. Again, this is when a scam artist pretends to be someone else in order to gain your trust and ultimately get you to send them money or provide personal information.
Does Being a Victim of Fraud Affect Your Credit?
If someone makes unauthorized charges or opens a credit account in your name, that could result in delinquent accounts on your credit reports. The good news is that you have the right to dispute information you believe is inaccurate.
Fraud can also have an indirect impact on your credit. If you're tricked into sending money to someone and don't have enough funds left over for your bills, any late or missed payments could hurt your credit.
The Bottom Line
Fraud can wreak havoc on your finances, including your credit health, but there are ways to potentially avoid it. If you do fall victim to identity theft or a scam, the most important thing is to act quickly to prevent further damage. From there, you can take steps to hopefully recover your losses. If you're worried your credit may have been compromised, you can get your FICO® Score☉ Θ and credit report for free from Experian to find out.