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What is Mail Fraud?
Mail fraud scams are a longstanding problem that cause people to lose money, suffer identity theft and other losses. You may well wonder what identity fraud and mail fraud is and how you can prevent it. In its essence, mail fraud scams involves sending a letter, flyer or other items by postal mail and then tricking the recipient into taking some kind of action. Usually, the mail fraud scam makes incredible promises such as a very low risk investment, sweepstakes that are too good to be true and low cost vacations. Fraud criminals are very creative, so individuals have to be extremely cautious when evaluating mailed information for potential mail fraud scams.
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Common Mail Fraud Scams
Unlike violent crime, mail fraud scams are usually committed with no face to face interaction. The low cost of deploying mail fraud scams is another reason they are so common. Finally, many people are poorly informed or desperate to believe a mail fraud scam is legitimate. All of these factors mean that mail fraud scams are likely here to stay. Learning about some of the most common mail fraud scams will help you understand what you may face.
- Misleading or dishonest investment offers: In an age of economic uncertainty and poor financial literacy, dishonest investment offers are very common. Typically, this type of scam promises investors incredibly high returns for little or no risk. Some dishonest people may also encourage people to invest in gold by making extraordinary claims about the commodity.
- Fraudulent sweepstakes: Sweepstakes where participants can win cars, money and other items can be legitimate. However, if you receive a sweepstakes letter claiming you have won a prize but you never applied or sought information on the sweepstakes, then you may have a mail fraud scam on your hands.
- Loans: While many banks and other financial companies send out letters about credit and loan products, this is not always the case. Some mail fraud scams are based on offering consumers a loan but in truth, they are simply seeking to obtain your personal information and financial information (e.g. credit information and Social Security number) which can be used to commit other kinds of fraud.
- Pyramid Schemes: This type of investment fraud depends on continually deceiving new investors to pay returns to earlier participants in the scheme. Some pyramid schemes come in the form of dishonest multi-level marketing opportunities. One way to identify this type of fraud is to determine whether or not the scheme pays a fee or commission to you based solely on recruiting additional participants.
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Protecting Yourself from Mail Fraud Scams
Fortunately, you can protect yourself from the mail fraud scams described in the above section. By using the principles and tips outlined here, you will have a much lower risk of experiencing fraud.
- Skepticism of unfamiliar companies or organizations: If you receive a letter or other mail from an unfamiliar organization and the letter makes some kind of incredible promise, be sceptical. You may even want to assume such letters are "guilty of mail fraud until proven otherwise."
- Be Wary of requests For personal information: If the potential mail fraud requests your Social Security Number, information about your checking account, birth dates or other sensitive information. Some of this information may be requested if you request to open a new bank account or investment account, but if the letter comes from an unfamiliar source, be wary.
- Too good to be true claims: If the investment letter promises sky high returns with no risk, there is a very high chance of some kind of fraud. Likewise, it pays to be sceptical about free vacation offers and other "amazing" offers.
- Flashy style and little substance: Real financial products and services are often required to include a fair amount of fine print to explain all the terms and conditions of using the product. If the offer does not provide this type of additional information or provide a clear way to obtain it (e.g. by visiting the company's website), you may be looking at a mail fraud scam.
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The U.S. government and other government agencies have a number of publications that describe various types of mail fraud scams and other financial frauds. Read these resources to educate yourself about other types of fraud and how you can protect yourself.
- Consumer Fraud by Phone or Mail, http://www.usps.com/cpim/ftp/pubs/pub281.pdf
- Mail Fraud Schemes, https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/FraudSchemes.aspx
- Postal Worker: By U.S. Navy photo by Photographer's Mate 3rd Class Danny Ewing Jr. Wikimedia Commons/United States Navy Public Domain