It's a frightening thought, but someone might be looking for your private data to commit identity fraud. U.S. consumers reported losing $3.3 billion to fraud in 2020 alone, while over 60% of Americans state that they’ve been a victim of a scam in the past. Fraudsters are getting particularly skillful these days, meaning the type of fraud you may encounter goes beyond what’s typically expected.

Phone scams and email scams are still regular vectors for criminals, but you may need to be wary of emerging or unexpected fraud types, including insurance, romance and even reward point fraud.

Auto insurance scams

Getting into an accident is stressful enough without adding fraud into the mix. However, there’s been an increase in insurance fraud targeting unwary U.S. drivers. Nearly 1 in 3 U.S. drivers believe they’ve been a victim of car insurance fraud, which can take several forms.

After getting into an accident with another vehicle, the other driver or that driver’s repair shop may try to exaggerate the cost of the repairs or the types of repairs that need to be completed, for example. This accounts for 39% of insurance scams reported by U.S. drivers. If you’re found to be at fault, and your car insurance provider is forced to pay, you may end up seeing a hike in your insurance rates as a result, or even complete cancellation of your policy by your provider.

A further 26% of U.S. drivers reported that mechanics fraudulently installed faulty air bags that had to be replaced later, and 25% stated that they were victims of predatory and unwanted towing.

Not all types of auto insurance scams are preventable. However, making sure to call the police and file a report following an accident is a good idea. Additionally, take pictures of all visible damage on your vehicle and the other vehicle in the case of an accident that involves more than one car.

Romance scams

The proliferation of social media and dating apps has made romance scams much easier to pull off, and has helped increase how many scams of this type now occur. According to the Federal Trade Commission, Americans reported losses of over $300 million to romance scams in 2020. This is also unfortunately a scam heavily targeted at older women. The average age of a romance scam victim is 50, while 63% of victims are women, according to one survey.

Scammers will typically examine potential victims’ social media pages, looking for signals that might indicate the potential victim is emotionally susceptible. Then, the scammer will create a fake profile that fits the type of love interest that the victim may be interested in. Quite often, the scammer will agree to meet up in person but cancel for various reasons, often related to having money issues. Scammers will keep this game going as long as possible to extract as much money as possible from the victim.

It can be difficult to avoid being a romance scam victim. However, the simplest avoidance method is to never give money to a potential romantic interest that you have never met in person. Confirm the identity of any love interests. If they start asking for money, that’s a red flag.

Medicare and health care scams

As you start aging, health care and Medicare become major concerns, especially as research shows that Medicare Supplement plans may cost as much as $784 per month, based on some pricing structures. This is a factor that scammers take advantage of as they target older Americans with phone and email scams that attempt to tap into fear and greed.

Many Medicare and health care scams will come in via phone calls. Scammers may claim that you’re due a refund for medical costs or expenses. Or, they may claim that you owe additional money for medical expenses. Some may seem more benign, making the claim that you need to verify your identity, typically in order to receive money or to complete a Medicare or health care approval process.

Many fraudsters have taken advantage of the ongoing COVID-19 pandemic to separate victims from their money and identity. The U.S. Department of Health and Human Services (HHS) offers a warning about fraud related to COVID-19.

Be suspicious of any call you receive asking for your identity or credit card information related to health care or Medicare services. If you do get a call from someone claiming to be from a service related to health care or Medicare, do not give information over the phone. Instead, go to that organization’s website, find a verified phone number, and independently initiate a call to see if there’s anything you need to do related to any account you may have with them.  

Rewards point scams (aka loyalty program fraud)

How many accounts do you currently have that offer rewards points? Scammers are increasingly targeting accounts with rewards points, which at times can be worth hundreds of dollars.

The broad term for this is loyalty program fraud, and access to these accounts comes down to weak password security. Cybercriminals will use what’s known as credential stuffing to input stolen username and password combinations into accounts. When they get a hit, they’ll steal the existing points and any further points you acquire as long as they have access to the account. Quite often, they’ll sell accounts with accrued points on the dark web for as little as a few dollars or as much as several hundred dollars, especially for accounts with airline miles.

No loyalty reward accounts are free from threat. Everything from pizza delivery accounts to gas cards is up for grabs. This issue extends beyond the points, however. When hackers can confirm that a username and password combination works to gain access to one of your accounts, they’ll try it on other accounts.

To prevent this type of fraud, use strong and unique passwords or passphrases across your accounts. Save passwords to a secure password manager to help you handle those multiple unique passwords. Implement multifactor authentication when possible. If a fraudster can access one of your accounts, they can probably access multiple accounts, increasing the risk of financial losses and account takeovers.

The Bottom Line:

These are only a handful of fraud concerns. Vigilance is essential to avoid becoming a victim of a scam. As most fraud is built around a scammer’s hope to gain access to private data or accounts, you can avoid most fraud attempts by never giving out private information over the phone to numbers you don’t recognize or can’t verify, never answering or clicking on links in suspicious emails, and improving the security of your private accounts.

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Maxime Rieman is product manager at ValuePenguin. Educating and assisting shoppers about financial products has been Rieman's focus, which led her to joining ValuePenguin, a consumer research and advice company based in New York. Previously, she was product marketing director at CoverWallet and launched the personal insurance team at NerdWallet.