What is a Fraud Ring and How Can I Keep Myself Safe?

Q: I’m hearing a lot about fraud rings and their threat to businesses and consumers. What is a fraud ring and how can I keep myself safe?

A: A fraud ring is a group of fraudsters and merchants that can operate for years while stealing money and information, causing tremendous damage and loss along the way. Let’s take a look at fraud rings, how they operate and how consumers and merchants can keep safe.

What is a fraud ring?

A fraud ring is an organized circle of criminals working to defraud and steal from people. They’ll use the same tactics as smaller scammer groups and individuals, but work on a massive scale. They also tend to have access to way more technology and resources than a typical scammer. Because of this, the harm they can do is on a much larger scale, too.

A fraud ring can consist of a group of criminals, as in any organized crime ring, or it can be made up of a family of crooks working together. The members of the fraud ring collaborate to share info that can help them commit acts of fraud to net vast amounts of stolen funds and merchandise.

How does a fraud ring operate?

A fraud ring can operate under several different pretexts. One common premise involves forgery, in which the fraud ring creates fake claims, steals identities and even prints counterfeit checks and/or currency. Some rings target individuals, committing identity theft and the like, but many focus on targeting ecommerce websites, businesses, charities or government agencies.

A fraud ring can commit any of the following scams:

• Forgery

• False claims

• Identity theft

• Identity manipulation

• Counterfeit checks and/or currency

How can I recognize a fraud ring?

Look for these red flags, which can indicate signs of fraud:

• Large purchases on your credit card or checking account that you didn’t make

• Bills for loans you haven’t taken out

• An unexplained, big drop in your credit score

If you own a business, you may be at higher risk of falling victim to a fraud ring. Be sure to look out for several sudden and large purchases from a customer who hasn’t made a purchase in a while, new accounts from customers that quickly become big spenders and claims demanding refunds for faulty products you believe were fine when shipped.

Detecting instances of fraud at the first sign of suspicion can help mitigate the damage and keep your money and your information safe.