Types of fraud and how to prevent them

From credit card fraud to identity theft, fraud generally refers to any deliberate and deceptive act committed to gain an unfair or unlawful advantage. It commonly encompasses various forms of deceit, including financial, identity, insurance, online, and retail fraud, among others.³

Understanding the different types of fraud, and the protection and prevention measures can help safeguard your sensitive information.

Different types of fraud

Common types of fraud include:

• Identity fraud: Usually involves the theft or use of someone else's personal information to commit fraudulent activities.

• Loan fraud: May occur when individuals or organisations provide false information or misrepresent their financial status to obtain loans or credit they are not eligible for or do not intend to repay.

• Credit card fraud: Generally involves unauthorised use of someone's credit card information to make fraudulent transactions or purchases.
• Online fraud: Can encompass a range of fraudulent activities conducted over the internet, including phishing scams, online shopping fraud, and auction fraud.
• Crypto fraud: Can refer to any fraudulent schemes related to cryptocurrencies.
• Investment fraud: Typically involves the misrepresentation or omission of information related to investments to deceive investors.
• Charity fraud: Can involve the misappropriation of donations or the creation of fake charitable organisations.
• Insurance fraud: Usually includes making false claims or providing misleading information to insurance companies.

Different types of fraud protection

Types of fraud protection include:

• Identity theft protection: Identity theft protection services can monitor personal information and alert individuals to suspicious activity, helping them detect identity theft early and potentially take necessary actions to prevent further damage.

• Credit monitoring: A credit monitoring service tracks changes in a person’s credit report and alerts them to any unauthorised or suspicious activities, such as new credit inquiries or accounts opened in their name.

• Phishing detection: Advanced email filtering and phishing detection tools can identify and block phishing emails, which are commonly used to trick individuals into revealing personal information.
• Secure authentication: Using passkeys (as a more secure alternative to passwords) or strong passwords in combination with two-factor authentication (2FA) methods can enhance security and prevent unauthorised access to someone’s accounts and devices.
• Financial fraud alerts: Many financial institutions offer fraud alerts, which notify people of unusual or suspicious transactions on their accounts.

Secure payment methods: Using secure payment methods like PayPal can help prevent fraud by keeping your financial information secure and encrypted. Your eligible purchase could also be protected under PayPal’s Buyer Protection Program.

How fraud protection keeps your transactions safe

Some of the ways fraud protection services can help keep you safe include:

• Real-time alerts for unusual account activities or unauthorised transactions.

• Filtered and blocked emails that are identified as potential spam.
• Increased security for online accounts, helping reduce the risk of unauthorised access.

How to get fraud protection

To harden their defences against fraud, individuals can:

• Contact one of the three major credit bureaus to place a fraud alert on their credit report: This alert notifies creditors to take extra precautions before granting credit in their name. For an added fee, people may be able to sign up to receive real-time alerts about their credit report. Costs generally vary depending on the bureau.
• Shop on secure websites: When making online purchases, ensure the website's URL begins with "https://" and has a padlock icon in the address bar. These indicators can signify a secure and encrypted connection.
• Be cautious with emails and links: Don't click on suspicious links or download attachments from unknown sources in emails. Be wary of phishing attempts and verify the legitimacy of emails before taking any action by checking the sender address and contacting the company independently.
• Keep software and devices updated: Regularly update computer, smartphone, and software applications to patch security vulnerabilities and protect against malware.
• Set up additional security alerts and measures: Wherever possible, set up alerts for financial transactions, sign-in notifications, and changes to account information. Also, enable increased security measures like 2FA.