A recent online survey, which polled more than a thousand participants between the ages of 11 and 18, delved into young people’s experiences with in-app purchases. The study showed that more than 10% of the respondents had unintentionally spent money on in-app purchases.1
From disputing legitimate charges to misrepresenting information on applications, you could unintentionally engage in fraudulent behavior in numerous ways.
Here are the 10 simple mistakes that can lead to serious consequences, including legal penalties and damage to your reputation.
1. Disputing Legitimate Charges
Friendly fraud is one of the most common forms of accidental fraud. It occurs when customers dispute a legitimate charge on their credit card statement, often because they don’t recognize the merchant’s name or forget about the purchase.
When you dispute a charge that you made, you’re essentially committing fraud, even if it was unintentional.
To avoid this, always double-check your statements and contact the merchant if you have any questions about a charge before disputing it with your bank.
2. Sharing Your Credit Card
It’s not uncommon for family members or close friends to share credit cards. However, if the primary cardholder is unaware of a purchase made by someone else on their account, they may mistake it for fraud and dispute the charge.
This can lead to accidental friendly fraud and potential legal consequences. To prevent this, establish clear communication with anyone with access to your credit card.
Make sure they understand the importance of informing you about any purchases they make to avoid confusion and accidental fraud.
3. Misusing Subscription Trials
Many online services offer free trials that require a credit card to sign up. Some people may sign up for these trials to cancel before the charges kick in but forget to do so.
When the unexpected charges appear on their statement, they might dispute them, claiming they never agreed to the subscription.
While this may seem an innocent mistake, it’s still considered fraud. Always read the terms and conditions carefully before signing up for any subscription or trial, and set reminders to cancel if you don’t want to continue the service.
4. Filing False Insurance Claims
Insurance fraud is a serious offense, but it can sometimes happen accidentally. For example, failing to inform your insurance company could be considered fraud if you file a claim for a lost item and later find it.
Similarly, providing inaccurate information on an insurance application, even if it’s unintentional, can lead to accidental fraud.
To avoid this, always double-check the information you provide on insurance forms and be transparent with your insurer about any changes in your circumstances.
5. Making Mistakes on Your Taxes
Tax season can be stressful, and making mistakes when filing your returns is easy. However, certain errors, such as claiming the wrong deductions or underreporting income, could be considered accidental tax fraud.
While the IRS may be lenient with genuine mistakes, repeated or significant errors could lead to penalties or criminal charges.
To minimize the risk of accidental tax fraud, keep accurate records throughout the year and consider working with a qualified tax professional to ensure your returns are filed correctly.
6. Using Someone Else’s Login Credentials
Sharing login credentials for streaming services or other online accounts may seem harmless, but it could be considered fraud. Even if you have permission from the account owner, using someone else’s login information violates most services’ terms of use and could lead to accidental fraud.
Protect yourself by only using your own login credentials and avoiding sharing them with others.
To share a service with family or friends, look for legitimate options like family plans or guest accounts.
7. Misrepresenting Information on Applications
When filling out applications for loans, credit cards, or other financial services, it’s crucial to provide accurate information. Misrepresenting your income, employment status, or other details, even unintentional, could be considered fraud.
Lenders rely on this information to assess your creditworthiness, and providing false data could lead to legal consequences.
Always double-check the information you provide on financial applications and be honest about your situation. If you’re unsure about something, ask for clarification before applying.
8. Accidentally Participating in Fraudulent Schemes
In some cases, individuals may unknowingly participate in fraudulent schemes, such as pyramid schemes or multi-level marketing (MLM) programs that operate illegally.
These schemes often prey on people’s desire to make money quickly and may not be immediately recognizable as fraud.
To protect yourself, thoroughly research any business opportunity before getting involved.
Look for red flags like promises of guaranteed income, pressure to recruit others, or a lack of transparency about the company’s products or services.
9. Mishandling Company Funds
Employees with access to company funds, such as those responsible for managing expenses or invoices, could accidentally commit fraud by mishandling these resources.
For example, submitting false expense reports or accidentally double-paying an invoice could be considered fraud, even with no malicious intent.
To avoid accidental fraud in the workplace, follow company policies and procedures carefully, keep detailed records of all transactions, and report any errors or discrepancies immediately.
10. Failing to Correct Known Mistakes
If you realize that you’ve accidentally committed fraud, such as by submitting false information on an application or receiving funds you’re not entitled to, failing to correct the mistake could compound the issue.
Knowingly benefiting from an error, even if you didn’t cause it, could be considered fraud.
If you discover that you’ve made a mistake that could be construed as fraud, take action immediately. Contact the relevant parties, such as your bank, insurer, or employer, and work with them to rectify the situation and minimize any potential legal consequences.
By understanding the common ways fraud can occur unintentionally, you can take steps to protect yourself and avoid costly mistakes.
Remember, honesty and transparency are always the best policies for financial matters.
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Martha A. Lavallie
Martha is a journalist with close to a decade of experience in uncovering and reporting on the most compelling stories of our time. Passionate about staying ahead of the curve, she specializes in shedding light on trending topics and captivating global narratives. Her insightful articles have garnered acclaim, making her a trusted voice in today's dynamic media landscape.
