"An educated consumer is the con-man's worst enemy," says financial coach Todd R. Tresidder, founder of FinancialMentor.com. Here are some of the most common frauds victimizing consumers right now and how to protect yourself.

Mortgage Fraud
Just last year, the FBI opened 599 mortgage fraud cases and had 1,089 mortgage fraud convictions. Still, the agency had 2,590 pending mortgage fraud investigations at year end. Today's mortgage scams are often aimed at distressed homeowners, states the FBI's Financial Institution Fraud Unit. These scams include foreclosure rescue schemes, loan modification schemes and equity skimming, among others. They are often carried out by real estate and mortgage professionals enabled by their specialized knowledge and/or authority. The FBI recommends that consumers protect themselves against mortgage fraud by seeking referrals and avoiding unsolicited relationships, checking licenses, walking away from any transaction that is high pressure or seems too good to be true, and not signing any paperwork that they don't understand.

Debit Card Fraud
If a Certified Fraud Examiner (CFE) like Ken Stalcup can become a victim of debit card fraud, it can happen to anyone. Stalcup, who works for Somerset CPAs in Indianapolis, used his debit card to pay the bill at a local restaurant.

"My waitress took my card and walked to the register, out of my sight, and returned with my receipt and the card. I signed the copy and even added a nice tip," he says.

Two days later, his bank contacted him to let him know they were shutting down his account and his debit card because it suspected they had been compromised. His card was used to purchase a computer and office supplies at a store 600 miles from his home.

"By allowing my waitress to carry my card off, she was able to swipe my card and sell my account information to other people who were able to steal from my account," he says.

Though his bank caught the fraud quickly, he recommends that consumers avoid letting their debit cards out of sight and check their accounts daily.

Fake Charities
Fake charities use the same techniques to steal your money that legitimate charities use to raise funds, according to the Federal Trade Commission (FTC). Before you donate, make sure you know where your money is going. Ignore high-pressure pitches, don't give cash and be especially careful in the wake of natural disasters, which is when con artists prey on the sympathetic and the generous. Get the charity's contact information and check out the organization before you give. Make sure the organization is legitimate, uses donations for its intended purpose and is an IRS-approved nonprofit.

Fake Lotteries
The typical lottery fraud targets the elderly and originates with a phone call or post card from Jamaica, the AP reported recently. The FTC received 30,000 complaints about this type of fraud in 2011. Because many victims don't report being scammed, officials estimate the problem's scope is actually much larger.

These fake international lottery scams ask the "winner" to send money to cover taxes on the prize. Victims who pay are then harassed for more money. The stolen money is rarely recovered. Furthermore, victims' names and contact information may get placed on "sucker lists" that are sold to fraudsters who will target the same victims for further scams. The FTC says consumers should never pay money to collect on a lottery or other prize. Be especially skeptical if you're told you've won a prize for a lottery or sweepstakes you don't recall entering. Don't share your credit card or bank account numbers or send money, even if the "organization" awarding the "prize" sends you a check first. Also, since U.S. law does not allow the cross-border purchase or sale of lottery tickets by mail or phone, assume anything claiming to be an international lottery is illegitimate.

The Bottom Line
"Although consumers are protected by a number of consumer protection laws, including the Consumer Credit Protection Act, there are still many opportunities for people to be taken advantage of by unethical professionals and corporations," says Steven Wolf, Executive Director and Forensic Accountant in the Washington, D.C., office of Capstone Advisory Group.

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