June 2024

Financial Fraud

Financial Fraud

What is financial fraud?

Financial fraud can be said to be an intentional act of deception that involves financial transactions for the purpose of personal gain. Fraud is known to be a crime and most financial frauds are known to be done by criminals who have studied the financial systems.

A good example can be in  a case where a broker presenting to people opportunities of buying or investing in shares and those believe that the issue is legitimate always contribute but in the end it may turn out to be fraudulent.  These fraudsters can contact their victims in several ways that the victims end up losing their money. The following are types of financial frauds that one can watch out for:-

  1. International lottery fraud
  2. Wills and legacies
  3. Inheritance scams
  4. Fake prizes
  5. Fund transfer scams
  6. Advance fee scam
  7. Counterfeit cards
  8. Skimming
  9. Card fraud
  10. Phishing
  11. Identity fraud
  12. Pyramid schemes
  13. Ponzi-schemes


  1. Ponzi-schemes

Ponzi-schemes are normally investment scams or schemes that promise to pay high rates of returns for fixed term investments. These are fraudulent investment schemes that one should watch out for since what they also do is they use a new investment to pay off earlier investments.


  1. Pyramid schemes

These schemes are so common in the world today, they promise customers huge profits based on recruiting or bringing others to join the program. There are others may use the sale of products as a way of hiding how they operate.


  1. Identity-fraud

This is a situation where someone uses your own identity and personal information to steal money. The fraudsters can go further and issues instructions to banks to make transfers that are not authorized by you.

  1. Phishing

This is a very common practice that is happening in the world today. It involves internet banking in a situation where customers receive emails which are tricky and asking them to issue out their account password and log in.

  1. Card fraud

Card fraud is very simple since it begins with one losing his or her card or when there is theft of the card. The thief will then make unauthorized purchases with the card until to the point that the owner of the card will notify the bank.

  1. Skimming

Skimming is one financial fraud that many people never expected to happen but a lot of people have lost their money through this process. It involves stealing of information from a credit card during an actual transaction that takes place.

The fraudsters are known to swipe the cards through a skimming device that records all the information that is on the magnetic strip.

  1. Counterfeit cards

This is where fraudsters end up stealing information from a card and therefore makes fake cards or they then sell the card information.

  1. Advanced fee scam

Such scams are normally pushed through via phone calls or mails where you are offered a large amount of money if you may be willing to help in the transfer of the money to another country.

  1. Fund transfer scams

Just as the name suggests, this is when you are asked through an email to receive some payment into your bank account and then help in sending the money abroad in return for a commission.

  1. Fake prizes

This is especially happens when a fraudster claims that you have won a prize. They could end up asking you for your credit card details or even your account number to pay for shipping of the non-existing product that you have won.

  1. Inheritance scam

Inheritance scam is really common these days; you receive email from an unknown person who claims to have an inheritance left for him or her and the person needs some money from you as fee so as to benefit from the assests.

  1. International lottery fraud

The fraudster will send you a cheque that you ought to deposit in your bank account and then send the money to the lottery committee. The fraudster then quickly asks the person to send the money before the cheque is mature. Many people have lost money through such a process.

  1. Wills and legacies

A person will receive an email notifying them that someone died and wrote their names on the will.

It is good to protect yourself from any form of financial fraud or crime. The following are some of the things that you can do:-

  • Make sure that you keep your PIN number as a secret.
  • Keep all your bank cards safe at all times.
  • You should also not place your money in an institution that is not authorized.
  • Do not give your cards to anyone.

If you have been a victim of financial fraud contact Phoenix Advisors straightaway to see if we can help.



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