The 3 Biggest Scams Threatening Your Money Right Now

White-collar crime in the United States is a thriving industry - and it's getting more sophisticated. The biggest scams threatening your money today don't just target the "suckers" of the world anymore.

The total cost of worldwide white-collar crime rose from just $5 billion in 1970 to $20 billion in 1980, $100 billion in 1990, and $220 billion in 2000, according to NW3C surveys and research of global law enforcement and regulatory reports. And a recent study from Eastern Michigan University estimates that white-collar crime will cost the United States as much as $1 trillion this year.

The absolute best way to avoid risk to your wallet is simply to be informed - by quickly picking up on the warning signs that your money is under attack, you can take immediate action.

That's why we've compiled a list of the three biggest scams targeting your money in 2014 - get to know these criminals before they get to know you.

No. 1 Money Scam of 2014: Tax Return Fraud

In 2013, the Internal Revenue Service (IRS) paid out $5.2 billion to identity thieves, according to a study released this week by the Government Accountability Office (GAO).

That the agency estimates it stopped another $24.2 billion in attempted fraud last year only highlights the fact that this scam is flourishing. Tax- and wage-related identity theft made up 16% of all ID-theft complaints at the Federal Trade Commission (FTC) in 2010. That portion rose to 43% by 2013, according to Time.

Florida has the highest rate of ID theft, so it's no surprise that tax return fraud is the most rampant there:

biggest scams chart

Here's how this scam works...

A perpetrator steals your identification. All he or she needs is a social security number, a laptop, and an internet connection. Then the criminal files a fake return before you file your taxes. The IRS issues its refunds within three weeks, so the thief collects the money quickly and then disappears.

The best way you can combat tax return fraud is to file your tax return early, and to do so electronically. Once the IRS gets a return with your social security number, it will notify you of any duplicate filings.

No. 2 Money Scam of 2014: Medicare Fraud

Medicare provides healthcare to 46 million elderly and disabled people in the United States. It pays out over 1 billion claims per year, for more than $430 billion. But it's also a $60 billion business for criminals - and taxpayers don't even know they're getting scammed.

For a sense of just how widespread this problem is, simply type "Medicare fraud" into the Google news tab, and see how many headlines of recent convictions pop up. You'll notice a fresh new batch every day.

Just on Friday, a Detroit cancer physician - whom some have dubbed "Dr. Evil" - pleaded guilty to $91 million in Medicare fraud between 2007 and 2013. This oncologist lied to hundreds of patients about their health so he could bill for unnecessary treatments.

"In this case, we had Dr. Fata administering chemotherapy to people who didn't need it, essentially putting poison into their bodies and telling them that they had cancer when they didn't have cancer," U.S. Attorney Barbara McQuade told the Detroit Free Press.

But you don't have to be a doctor to commit Medicare fraud. All you have to do is set up a fake storefront, steal identities, and start billing out medical charges to Medicare. Then the program issues its checks to the storefront, and the thief collects.

Only two things can be done by the average American to combat Medicare fraud: keep tabs on your quarterly Medicare statement (if you get one), and support politicians fighting this costly issue.

No. 3 Money Scam of 2014: Retail Data Breaches

In the first three months of 2014, 254 data breaches occurred, resulting in stolen data records for more than 200 million people. That's a whopping 233% year-over-year increase, according to data security company SafeNet. In fact, data records were lost or stolen in Q1 at a rate of 70 million every month, 2 million every day, and 93,000 every hour.

Consumers aside, these cyberattacks rack up major losses for the companies that get hit. A report from market intelligence firm IDC and the National University of Singapore forecasts global enterprises will spend some $500 billion this year to fight data breaches.


By Joe Heller, Hellertoon.com.

There are even more costs when a company gets successfully attacked - between mitigating the crisis and losing brand trust, the damage can be lasting. Target Corp. (NYSE: TGT) is still suffering from weaker sales resulting from its data breach last fall, when hackers stole 40 million customer credit card numbers and other personal data, like email addresses, from as many as 70 million customers.

Through February and March, the personal records of 233 million eBay (Nasdaq: EBAY) users were stolen, including names, passwords, phone numbers, and physical addresses. Even worse, the e-commerce giant failed to notify users until May.

In June, Asian food restaurant chain P.F. Chang's (Nasdaq: PFCB) was hit. While PCFB didn't reveal how many customers were affected, thousands of newly stolen credit and debit cards went up for sale online shortly thereafter.


By Randy Bish, Pittsburgh Tribune-Review.

And on Sept. 8, The Home Depot (NYSE: HD) announced 56 million of its customers' payment information had been compromised, dwarfing Target's retail data breach. As a result, victims across the U.S. are having cash completely drained from their accounts, or being fraudulently charged for items like prepaid cards and groceries.

In fact, the trend is pushing for a rise in "safer" payment methods. For instance, earlier this month, Apple (Nasdaq: AAPL) announced "Apple Pay," a mobile payment method that lets consumers hold their iPhones up to a payment device to make a transaction.

But Apple Pay brings more to the table than just convenience - it's actually more secure than using a credit or debit card. The only data that's transmitted is a one-time code that's generated by a special chip in the iPhone. The transaction is then approved by the customer using the phone's Touch ID - which is locked to their unique fingerprint. No credit card data is transmitted whatsoever.

To protect yourself from retail data breaches, make sure to carefully check your credit and debit card statements often. Keep in mind retailers are developing a history of not telling customers they'd been targeted until well after the event.

For months now, the SEC has been investigating whether anyone in the federal government leaked inside information to a Washington-based investment research firm. And this month there was an alarming new twist in the probe into the Washington-Wall Street "corruption corridor"...

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