Preventing Fraud
Protecting What You’ve Built Starts with Knowing the Risks.
A Financial Guide to Recognizing, Avoiding, and Reporting Financial Fraud.
You work hard to build financial security for your family. Financial fraud is one of the fastest-growing threats to everything you’ve earned. FundaDream is committed to keeping you informed — because protecting your financial future starts long before a plan is in place.
Why Financial Fraud Matters
Financial fraud is not a niche crime that happens to other people. It is the most reported crime category in the United States, affecting millions of families each year across every income level, age group, and background. The financial services industry — the very sector designed to help people build security — is one of the most actively targeted.
Understanding how fraud works, what it looks like in financial services contexts, and what you can do to protect yourself is not just useful knowledge. It is one of the most valuable forms of financial planning a family can do.
The Scale of the Problem
Financial fraud affects Americans at a scale most people underestimate. The numbers below reflect reported losses only — the majority of fraud goes unreported.
$10B+ Lost annually | Americans reported losing more than $10 billion to fraud in a single recent year, according to the FTC — the highest total on record. The actual figure, including unreported fraud, is estimated to be significantly higher. |
34% Targeting adults 60+ | People aged 60 and older account for roughly one-third of all fraud victims and represent a disproportionately high share of total dollars lost, making senior financial fraud one of the most critical protection priorities. |
2.6M Reports per year | The FTC receives millions of fraud reports annually. Investment and financial services fraud, imposter scams, and identity theft consistently rank among the top categories by volume and dollar value of losses. |
#1 Most targeted sector | Investment fraud and financial services impersonation scams are consistently among the top categories of reported fraud by dollar amount lost — making financial literacy one of the most important consumer protections available. |
Common Types of Financial Fraud
Financial fraud takes many forms. Knowing what each one looks like is the first step to not becoming a victim.
Investment Fraud Fraudulent investment schemes promise high returns with little or no risk — a combination that does not exist in legitimate investing. Ponzi schemes, pyramid schemes, and fraudulent securities offerings typically target people through social media, unsolicited calls, or referrals from trusted contacts who were themselves defrauded. Warning signs include guaranteed returns, pressure to invest quickly, and difficulty accessing your funds. |
Insurance Fraud Insurance fraud targeting consumers includes fake insurance policies sold by unlicensed agents, ghost brokers who collect premiums and disappear, and identity theft used to take out policies or make unauthorized changes to existing coverage. Always verify that any insurance professional you work with is licensed in your state before paying any premium. |
Identity Theft Financial identity theft occurs when someone uses your personal information — Social Security number, bank account details, or insurance information — to open accounts, take out loans, or make unauthorized transactions in your name. It can go undetected for months or years and can severely damage your credit and financial standing. |
Imposter Scams Fraudsters impersonating government agencies (IRS, Social Security Administration, Medicare), financial institutions, or well-known companies contact consumers by phone, email, or text demanding immediate payment or threatening arrest, benefit suspension, or account closure. Legitimate organizations will never demand payment in gift cards, cryptocurrency, or wire transfer. |
Affinity Fraud Affinity fraud targets specific communities — religious groups, ethnic communities, professional associations, or close social networks — by using a trusted community member to introduce the scheme. The fraud spreads through trust rather than evidence, which makes it especially damaging. No shared background or community bond substitutes for verifying credentials and checking registration. |
Senior Financial Exploitation Older adults are disproportionately targeted by financial fraud, including by family members, caregivers, and trusted advisors. Elder financial exploitation involves unauthorized transfers, forged documents, undue influence over financial decisions, and theft of benefits. It is consistently underreported because victims are often ashamed or depend on their exploiters. |
Annuity and Insurance Churning Some unscrupulous agents encourage clients to unnecessarily replace existing life insurance or annuity products with new ones — generating a commission while costing the client surrender charges, lost benefits, and coverage gaps. A recommendation to replace an existing policy should always come with a clear, written explanation of the costs and benefits of the change. |
Phishing and Digital Fraud Phishing attacks use fraudulent emails, texts, or websites that appear to come from legitimate financial institutions to steal login credentials, account numbers, or personal information. Spear phishing targets specific individuals using personalized details gathered from social media. Always verify the sender before clicking any link or providing any information. |
Universal Red Flags - Warning Signs That Apply to Any Financial Offer
Regardless of the type of financial product or service being offered, the following warning signs are consistent indicators of potential fraud. If you encounter any of these, stop the conversation and verify independently before taking any action.
- Guaranteed returns or “risk-free” investment opportunities. No legitimate investment guarantees returns.
- Pressure to act immediately. Legitimate financial opportunities do not expire in hours.
- Requests for payment by gift card, cryptocurrency, wire transfer, or cash. These are irreversible and untraceable.
- Unsolicited contact by phone, email, or text about your finances, benefits, or taxes.
- Requests for your Social Security number, bank account number, or insurance policy number before you have verified the contact.
- A professional who cannot provide verifiable license information or who discourages you from checking their credentials.
- Promises of returns significantly higher than market rates, especially if combined with claims of “exclusive” or “insider” access.
- Difficulty withdrawing your money, vague explanations of where your funds are held, or requests to reinvest rather than receive payment.
- Offshore account requirements or instructions to keep the investment confidential from family or other advisors.
- Documents that appear official but contain spelling errors, inconsistent formatting, or generic language.
How To Protect Yourself
The most effective fraud prevention is proactive. These steps reduce your risk significantly before any fraudster ever makes contact.
Step 1 Verify credentials before you engage.
Any licensed insurance professional must hold a valid state insurance license. You can verify license status for California insurance professionals at the California Department of Insurance website (insurance.ca.gov). Investment professionals can be verified at FINRA BrokerCheck (brokercheck.finra.org) and the SEC’s Investment Adviser Search (adviserinfo.sec.gov). Always verify before sharing any financial information or making any payment.
Step 2 Work only with licensed, vetted professionals.
Every financial professional in the FundaDream network has passed a comprehensive vetting process including identity verification, license verification, criminal background check, and adverse media screening. Choosing a vetted professional is one of the most important protections against insurance and investment fraud.
Step 3 Monitor your financial accounts and credit regularly.
Review your bank and investment account statements monthly. Check your credit reports at least annually — all three bureaus are available free at annualcreditreport.com. Review your Social Security earnings record at ssa.gov. Early detection dramatically reduces the damage from identity theft and unauthorized account activity.
Step 4 Slow down. Ask questions. Verify independently.
Fraud depends on urgency and trust. The single most effective protective behavior is slowing down any financial conversation and verifying independently — not through a number or link provided by the contact, but through a number you find yourself from an official source. A legitimate financial professional will never object to you taking time to verify.
Step 5 Protect your personal information.
Never share your Social Security number, Medicare or Medicaid number, bank account details, or insurance policy numbers unless you initiated the contact and have verified the identity of the recipient. Shred documents containing financial information. Use strong, unique passwords for financial accounts and enable multi-factor authentication wherever available.
Step 6 Talk to someone you trust before making major financial decisions.
Isolation is a fraud tactic. Scammers frequently ask victims to keep the opportunity secret. Involving a trusted family member, friend, or independent financial advisor before making any significant financial commitment gives you a second perspective and breaks the isolation that fraud depends on.
Step 7 Review all documents carefully before signing.
Never sign a blank form. Never sign anything you do not fully understand. Ask for time to review documents before signing, and do not work with anyone who refuses to give it to you. If a document contradicts what you were told verbally, stop and seek independent advice.
Step 8 Be especially cautious online and on the phone.
Do not click links in unsolicited emails or text messages about your finances, benefits, or taxes. Do not call phone numbers provided in unsolicited messages. Hang up on callers who demand immediate payment, threaten consequences, or request irreversible payment methods like gift cards or cryptocurrency.
If You Suspect Fraud - What To Do Immediately
If you believe you have been the victim of financial fraud or that someone is attempting to defraud you, take action immediately. The sooner you act, the more likely you are to limit your losses and assist law enforcement in stopping the fraud from reaching other victims.
Step 1 Stop all contact with the suspected fraudster.
Do not send additional money, do not respond to further communications, and do not follow any instructions from the person you suspect of fraud. Additional contact rarely recovers lost funds and may expose you to further harm.
Step 2 Document everything.
Preserve all communications — emails, texts, letters, voicemails, and documents. Write down the details of every interaction you can recall, including dates, amounts, names, phone numbers, and exactly what was said or promised. This documentation is critical for law enforcement and recovery efforts.
Step 3 Contact your financial institution immediately.
If money has left your account, contact your bank or financial institution immediately to report unauthorized transactions. Ask about your options for stopping or reversing transfers. Wire transfers and cryptocurrency transactions are extremely difficult to reverse, but prompt action gives you the best chance.
Step 4 Place a fraud alert or credit freeze.
Contact one of the three major credit bureaus — Equifax (equifax.com), Experian (experian.com), or TransUnion (transunion.com) — to place a fraud alert on your credit file. A credit freeze is stronger and prevents new credit from being opened in your name. Both are free.
Step 5 Report the fraud to the appropriate authorities.
Filing a report creates an official record, may help law enforcement identify and stop the fraudster, and may be required for insurance claims or tax deductions. See the reporting resources below.
Step 6 Consider consulting an attorney.
If significant funds were lost, a consumer protection or financial fraud attorney can advise you on options for civil recovery and legal remedies. Many offer free initial consultations.
Where To Report Financial Fraud
Reporting fraud matters — even when you believe recovery is unlikely. Reports help authorities identify patterns, warn other consumers, and build cases against repeat offenders.
AGENCY | REPORT | WEBSITE |
FTC | Federal Trade Commission — primary federal agency for consumer fraud. File a report for scams, identity theft, and imposter fraud. | reportfraud.ftc.gov |
SEC | U.S. Securities and Exchange Commission — for investment fraud, Ponzi schemes, and securities violations. | sec.gov/tcr |
FINRA | Financial Industry Regulatory Authority — for complaints about brokerage firms and registered investment professionals. | finra.org/investors/have-problem |
FBI IC3 | FBI Internet Crime Complaint Center — for online fraud, phishing, and digital financial crime. | ic3.gov |
CA DOI | California Department of Insurance — for insurance fraud, unlicensed insurance activity, and agent misconduct. | insurance.ca.gov |
CFPB | Consumer Financial Protection Bureau — for complaints about financial products, services, and institutions. | consumerfinance.gov/complaint |
SSA OIG | Social Security Administration Office of Inspector General — for Social Security imposter scams and benefit fraud. | oig.ssa.gov/report |
State AG | California Attorney General — for consumer fraud, financial scams, and elder financial exploitation occurring in California. | oag.ca.gov/consumers |
Special Focus - Elder Financial Exploitation
Older adults are the most heavily targeted demographic in financial fraud. Elder financial exploitation is the single most reported and costliest form of elder abuse in the United States — and an estimated 1 in 5 older Americans has been victimized. The majority of cases go unreported because victims are ashamed, fear losing independence, or are being exploited by someone they trust.
Elder financial exploitation takes many forms:
- Unauthorized use of a senior’s bank, credit, or investment accounts.
- Forged signatures on financial documents or changes to beneficiary designations.
- Pressure or manipulation to change a will, trust, or power of attorney.
- Overcharging for services or products sold to older adults.
- Unnecessary replacement of insurance or annuity products to generate agent commissions.
- Financial abuse by family members, caregivers, or people in positions of trust.
If you are concerned about elder financial exploitation — for yourself or someone you know — contact:
- Adult Protective Services (APS) in your county — for immediate assistance with elder abuse.
- The National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311), operated by the U.S. Department of Justice.
- The California Department of Aging: 1-800-510-2020.
- Your local law enforcement agency if you believe a crime has been committed.
How FundaDream Helps Protect You
FundaDream’s design reflects a commitment to consumer protection that goes beyond standard industry practice. Here is what FundaDream does on your behalf before any professional is connected to you.
Comprehensive Professional Vetting
Every professional in the FundaDream network has passed a seven-step vetting process including identity verification, OFAC screening, primary license verification, criminal background check, adverse media screening, supplemental credential review, and final approval. Professionals with revoked licenses, felony convictions, financial crimes, or regulatory bars are permanently ineligible.
License Verification
FundaDream verifies that every professional holds a valid, current license in the state where they practice before connecting them with any client. You should never work with an insurance professional who cannot provide verifiable license information — and with FundaDream, you never have to.
Transparent Firm Identity
FundaDream Insurance Solutions, Inc. is a licensed California insurance corporation. Our license information is available upon request. We identify ourselves clearly in all consumer-facing materials, and we encourage every consumer to verify our standing directly with the California Department of Insurance.
Data Protection
Your personal and financial information is protected in accordance with FundaDream’s Privacy Policy. Your information is shared only as necessary to connect you with the right professional — not distributed broadly across the network or used for purposes unrelated to your planning needs.
No Pressure, No Obligation
FundaDream does not charge consumers for matching services and does not require any commitment after an initial consultation. Our professionals are vetted for client-first service standards. You are never obligated to move forward with any recommendation.
Protecting Your Plan Starts Here
The best protection against financial fraud is financial confidence — knowing who you are working with, understanding how legitimate financial services work, and having a trusted professional on your side.
FundaDream was built to give every family access to vetted, licensed financial professionals who meet a high standard for credentials and integrity. If you have concerns about a financial professional you have encountered — inside or outside the FundaDream network — we encourage you to verify their credentials and report any concerns to the appropriate regulatory authority.
Getting Started
Whether you are looking for a vetted financial professional who is part of something bigger than their practice, or a business owner looking to work with a firm whose values match your own — FundaDream is the path with purpose and where you belong.
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FundaDream’s charitable giving program is administered in accordance with applicable federal and California state law. All charitable recipients are IRS-recognized 501(c)(3) tax-exempt organizations whose status is verified prior to any gift being made. Charitable giving is made from FundaDream’s general corporate revenues at the sole discretion of FundaDream leadership on a periodic basis. No consumer benefit, inducement, or entitlement is created by or associated with FundaDream’s charitable giving activities. FundaDream’s charitable giving is not tied to any individual insurance transaction, premium payment, policy placement, or client relationship. No financial professional who partners with FundaDream has any right to direct, influence, or receive any benefit from FundaDream’s charitable giving activities. FundaDream reserves the right to modify, suspend, or discontinue its charitable giving program at any time at its sole discretion. This disclosure does not constitute legal, tax, or financial advice. For questions about FundaDream’s charitable giving program, contact FundaDream directly.
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