Online Scams and Fraud
Practical plain-language legal guidance for students and communities.
Written to help students and families understand legal topics that affect everyday life.
Online scams cost Americans billions of dollars every year. Young people are increasingly targeted because scammers know they are active online, may be less experienced with financial transactions, and often share a lot of personal information on social media.
Fraud means intentional deception to gain money or personal information. It is illegal. But the best protection is being able to recognize a scam before you become a victim.
QUICK FACTS
What You Should Know First
Young Adults Are a Top Target
According to the FTC, young adults ages 18 to 29 report losing money to fraud more often than older adults, particularly through social media and online shopping.
Gift Cards Are Always a Scam
No legitimate government agency, employer, or business will ever ask you to pay using gift cards. If someone asks for payment in gift cards, it is always a scam.
Government Agencies Do Not Call Demanding Payment
The IRS, Social Security Administration, and other agencies will not call you demanding immediate payment or threatening arrest. Hang up.
Crypto and Wire Transfers Are Irreversible
Once you send cryptocurrency or a wire transfer, you generally cannot get it back. Scammers prefer these methods for exactly that reason.
You Can Freeze Your Credit for Free
If your personal information is stolen, you can place a free credit freeze with the three major bureaus (Equifax, Experian, TransUnion) to prevent new accounts from being opened.
REAL SITUATIONS
What This Looks Like in Real Life
Q.Someone offered me a job online and sent me a check to deposit, then asked me to wire some money back.
A.This is a check fraud scam. The check is fake. Once you wire the money, it is gone and you are liable for the full amount when the fake check bounces. Stop communication immediately and do not send any money.
Q.I bought something on an Instagram page and never received it. The page has disappeared.
A.You may be able to dispute the charge with your bank or credit card company. Report the fraud to the FTC at ReportFraud.ftc.gov. If you paid by credit card, you have the strongest dispute rights under the Fair Credit Billing Act.
Q.Someone claiming to be from the Social Security Administration said my number was suspended and I needed to pay a fine.
A.This is a government impersonation scam. Social Security numbers cannot be 'suspended.' Government agencies do not call demanding immediate payment to avoid arrest. Hang up and report it to the FTC.
WHAT YOU CAN DO
Steps to Protect Yourself
Stop Before You Act
Scammers create artificial urgency. Any situation that demands you act right now, before you think, is designed to bypass your judgment. Pause and verify first.
Verify Independently
If a company or government agency contacts you, find their phone number on their official website and call that number directly to verify the contact.
Never Send Gift Cards as Payment
No legitimate organization will ever ask you to pay using gift cards. If someone does, end the conversation immediately.
Protect Your Personal Information
Never share your Social Security number, bank account numbers, or passwords in response to unsolicited contacts by phone, email, or text.
Report It
File a report at ReportFraud.ftc.gov. Reports help the FTC track scammers and warn other consumers.
MYTHS VS. FACTS
Common Misconceptions
MYTH
Scams only target older people who are not tech-savvy.
FACT
FTC data shows young adults are frequently targeted and often lose money, particularly through social media shopping scams and fake job offers.
MYTH
If a website looks professional, it is legitimate.
FACT
Scammers invest in professional-looking websites with real logos and polished language. Always check independent reviews, look for physical contact information, and be cautious about new or unverified sites.
MYTH
I would know a scam when I see one.
FACT
Modern scams are highly sophisticated. They use real brand imagery, personalization from your social media data, and professional communication that looks identical to legitimate outreach.
MYTH
There is nothing I can do after I have been scammed.
FACT
You can report to the FTC, contact your bank about reversing transactions, file a police report, and freeze your credit if identity theft occurred. Taking action quickly improves your chances of recovery.
KNOW YOUR RIGHTS
Your Core Protections
Federal law gives you specific rights and protections when you are the victim of fraud.
You have the right to dispute fraudulent charges with your bank or credit card company.
The Fair Credit Billing Act protects credit card users from unauthorized charges.
If your identity was stolen, you can place a free fraud alert or credit freeze with the major credit bureaus.
You can report scams to the FTC, the FBI's Internet Crime Complaint Center, and your state attorney general.
Identity theft is a federal crime under 18 U.S.C. § 1028.
FAQ
Frequently Asked Questions
Stop sending money immediately. Contact your bank if money left your account. Report to the FTC at ReportFraud.ftc.gov. If identity theft occurred, visit IdentityTheft.gov for a step-by-step recovery plan.
It depends on how you paid. Credit card charges are easiest to dispute. Bank wire transfers and gift card payments are very hard to reverse. Cryptocurrency transactions are generally not reversible at all.
Phishing is when someone sends a message pretending to be a trustworthy organization, like your bank, to trick you into giving up personal information or clicking a link that installs malware.
Secure your account immediately by changing your password and enabling two-factor authentication. Notify your friends directly that your account was compromised. Report the incident to the platform.
It can be, but use caution. Meet in a public place. Inspect the item before paying. Use a payment method you can dispute if something goes wrong. Never pay before receiving the item.
Almost certainly not. Legitimate prize programs do not require winners to pay fees upfront to collect their prize. This is called an advance-fee scam.
NEED HELP?
Helpful Resources
FTC: Report Fraud
File a consumer fraud report with the Federal Trade Commission.
Visit ResourceFTC: Identity Theft Recovery
Step-by-step identity theft recovery plan from the Federal Trade Commission.
Visit ResourceFBI: Internet Crime Complaint Center
Report internet crimes including scams and fraud to the FBI.
Visit ResourceSOURCES
Citations and References
LEGAL DISCLAIMER
SHIELD Legal provides legal education and informational resources only and does not provide legal advice. Legal information changes over time and varies by jurisdiction. Nothing on this platform creates an attorney-client relationship. For advice specific to your situation, please consult a licensed attorney in your state. Always verify current law with a qualified professional before taking action.