Consumer Awareness

What Are the Most Common Types of Consumer Fraud?

calendar12 Apr, 2023
timeReading Time: 5 Minutes
What Are the Most Common Types of Consumer Fraud?

Consumer fraud is any illegal act that is done to trick or steal money from people or businesses. It involves the use of false or misleading information, deception, or other unethical tactics to get people to part with their money, property, or personal information.

Consumer fraud can take many forms, including identity theft, credit card fraud, Ponzi schemes, phishing scams, telemarketing fraud, and many others. These scams are often designed to take advantage of people who are vulnerable, such as the elderly or people with limited financial resources.

Identity theft is one of the most common types of consumer fraud. It occurs when someone steals an individual’s personal information, such as their social security number or bank account information, and uses it for their own financial gain. This can result in significant financial losses and can also damage the victim’s credit score. Another common type of consumer fraud is credit card fraud. This involves the unauthorized use of an individual’s credit card to make purchases or withdraw cash. This can be done by physically stealing the card or by stealing the individual’s card information online.

 Types of Consumer Fraud:

  • Phishing Scams

Phishing scams are one of the most common types of consumer fraud. These scams involve fraudsters sending emails or text messages that appear to be from legitimate companies, such as banks or credit card companies. The message will typically ask you to click on a link to verify your account information, but the link will take you to a fake website that looks identical to the legitimate one. Once you enter your login information, the fraudsters can use it to access your accounts and steal your money.

To protect yourself from phishing[1] scams, never click on links in emails or text messages from unknown senders, and always verify that the website you are visiting is legitimate before entering any sensitive information.

  • Identity Theft

Identity theft is another common type of consumer fraud that can result in significant financial loss. This type of fraud occurs when someone steals your personal information, such as your Social Security number, and uses it to open new credit accounts or make purchases in your name.

To protect yourself from identity theft, be careful about giving out your personal information, especially online. Use strong passwords, and don’t use the same password for multiple accounts. Monitor your credit report regularly to spot any suspicious activity.

  • Investment Scams

Investment scams are another common type of consumer fraud. These scams often involve fraudsters promising high returns on investments that are either non-existent or do not exist at all. The fraudster may claim to be a financial advisor or investment professional, but in reality, they are just trying to scam you out of your money.

To protect yourself from investment scams, do your research before investing in anything. Be wary of any investment that promises high returns with little or no risk. Always verify that the person offering the investment is licensed and registered with the appropriate regulatory agency.

  • Lottery Scams

Lottery scams are another common type of consumer fraud that targets vulnerable individuals, such as seniors. These scams typically involve fraudsters contacting you to inform you that you have won a large sum of money in a lottery or sweepstakes. The catch is that you need to pay a fee or provide your bank account information to claim your prize.

To protect yourself from lottery scams, remember that you can’t win a lottery or sweepstakes that you didn’t enter. Never give out your bank account information or pay a fee to claim a prize. If something seems too good to be true, it probably is.

  • Tech Support Scams

Tech support scams are becoming increasingly common as more people rely on technology in their daily lives. In these scams, con artists contact you and say they are from a real company’s tech support, like Microsoft or Apple. The fraudster will claim that there is something wrong with your computer or device and ask you to give them remote access to fix the problem. Once they have access to your device, they can put malware on it or steal your personal information. 

  • Ponzi Schemes

It is another type of consumer fraud that has been around for many years. They involve offering investors high returns on their investment, but in reality, the returns are being paid out with money from new investors. The scheme eventually collapses, leaving many investors with significant financial losses.

To protect yourself from tech support scams, remember that legitimate companies will never contact you unsolicited and ask for remote access to your device. If you have a problem with your computer or device, contact the company directly using a phone number or email address that you know is legitimate.

Money-Related Jurisdiction

Consumer complaints may be made over the following values:

Forums Amount
District forumup to 20 lakhs
State Commission20 lakhs to 1 crore
National Commissionmore than 1 crore
The award pronounced by the national commission might be contested at Supreme Court. 

How to File a Complaint in a Consumer Forum:

  • Step 1:

The complaint can be made on simple paper, stamp paper is not necessary for it.

  • Step 2:

The complaint should be drafted stating the facts necessary for establishing the cause of action. Following things needs to be mentioned in complaint by the consumer:

a) Name and complete details of complainant and opposite party or parties.

b) Date and time of purchase of goods or services availed and amount paid for them.

c) Particulars of dispute; like defect in goods or inferior quality of service etc.

d) Particulars of relief sought in the complaint.

e) Particulars of goods purchased with numbers or details of services availed.

f) Copies of all those documents can be attached which support the contention of consumer and are necessary to establish the cause of action like copy of bills of goods bought or service availed, warranty receipt, copy of complaint made to trader asking to compensate for the loss.

  • Step 3:

The compensation claimed should be specified in the complaint and along with it consumer can also ask for refunds, damages, litigation expenditure etc. But these amounts should be detailed under different heads and in accordance with pecuniary jurisdiction of respective consumer forums.

  • Step 4:

The statement of jurisdiction should be made in the complaint as to how the case falls within the jurisdiction of consumer forum.

  • Step 5:

A verification affidavit should be affixed with the complaint stating that all the facts and claims made in the complaint are true and correct.

  • Step 6:

At the end of complaint the signature should be put. The consumer may argue his case on his own or through his authorized representative. The complaint made with district forum or state commission needs to be filed in three sets and when made with national commission needs to be filed in four sets with additional sets for each opposite party.

  • Step 7:

The complaint has to be filed with within two years from the date on which the cause of action arose. In case of delay sufficient reasons has to be given to the forum so it may allow the complaint to be filed.

Note: We have a team ready to assist you in filing a complaint on consumer forums.


In conclusion, consumer fraud is a serious problem that affects millions of people every year. Fraudsters use a variety of methods to exploit unsuspecting consumers, and the consequences can be severe. However, by being aware of the most common types of consumer fraud and taking steps to protect yourself, you can greatly reduce your risk of falling victim to a scam. Remember to be cautious when giving out personal information, always do your research before investing or making purchases, and never click on links or give remote access to unsolicited tech support. Stay vigilant and be proactive in protecting yourself against consumer fraud.

Also Read:
Consumer Benefits Under Consumer Protection Act

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