Over 1 million people filed fraud complaints with the Federal Trade Commission last year, according to its Consumer Sentinel Network Data Book.
The secure, online database is based on unverified reports filed by consumers and is available only to law enforcement. They use the data collected to spot trends, identify questionable business practices and targets, and enforce the law, indicates the FTC.
The top three categories of fraud are debt collection, identity theft, and imposter scans, according to the FTC, which has partnered with Ethnic Media Services (EMS) to alert journalists of color about the new ways consumer fraudsters are constantly changing their game.
During a September 11 tele-briefing, legal experts outlined new scam tactics targeting cities like Nashville, Denver, Kansas City, and Boston.
In 2017, the last year of full reporting, the FTC took in nearly 2.7 million consumer reports and of those, about 1.1 million were about fraud, according to Attorney Monica Vaca, FTC associate director of the Division of Consumer Response & Operations and tele-briefing host.
“People lost a lot of money. In the aggregate, people reported losing $905 million to fraud,” said Vaca. For individuals who lost money, that means an an average of $429, she said.
Vaca added that the good news is people took time to report a fraud they were exposed to, but recognized and avoided, she said. About 21 percent of those who reported fraud to the FTC in 2017 said they lost money.
According to Vaca, by far, the largest fraud category was imposter scam, where somebody pretended to be calling from the government, a business, or who has some technical support expertise. In addition, it might be somebody who lies about being one’s online love, someone who fakes an emergency as a member of one’s family.
“The losses that people experience to these imposter scams are huge. Of that $905 million aggregate loss, more than a third of the reported losses stem from these kind of imposter scams,” she said.
The first thing fraudsters do is convince people that they need to get the money immediately and through fear tactics. “Sometimes they do that by saying that you or someone you love is in trouble. You haven’t paid your taxes. Maybe they’ll say, ‘You didn’t show up for jury duty,’ or that you’ve got a big debt, and you’re about to be arrested,” Vaca explained.
A second very common tactic is to tell people something great has happened, like they’ve won a prize, but they need to pay money for taxes and fees to get at it. “Any way you slice it, it’s a story that’s designed to make you think that you’ve got to send money and you’ve got to do it quick,” added Vaca.
Recently the FTC worked with the Department of Justice to settle a case against Western Union. Consumer fraud victims who paid scammers using the company’s wire transfer will receive $586 million in refunds.
In Nashville, scammers got ahold of the delinquent payment list for the city’s retail supplier of electric power. They threatened power shutoffs if immediate payment of overdue bills wasn’t made.
“That’s the first I’d heard of someone masking as a collector for a public utility seeking money” said Atty. David Tarpley of the Legal Aid Society.
The FTC is increasingly getting reports that scammers are demanding to paid by gift cards, according to Vaca. Oddly, she pointed out, a scammer is on the phone, claiming to be the IRS, but on the other saying go to a local retailer and buy $1,000 worth of gift cards. Once the cards are purchased, and the reads the numbers off the back per the scammer’s demand, just like that, a consumer’s money is gone!
“The FTC is hearing this story every single day. We’re seeing reported dollar allowances now so high that we really do need to warn the public to be vigilant about this,” said Vaca. “The government does not demand to be made via gift card. The government does not call you and demand payment for a prize, and certainly, they don’t tell you to pay them with a gift card,” she continued.
Vaca urged whoever gets this kind of call to take a moment before rushing into action by calling a friend or loved one and tell them about the call. Chances are they’ll realize it doesn’t make any sense once they hear it out loud. Also, report it to the FTC so they can fight them, she said.
Fraud, identity theft, or an unfair business practice may be reported to the FTC at ftc.gov/complaint. Click on the FTC Complaint Assistant icon, and answer the questions. The FTC accepts complaints related to many topics, including National Do Not Call Registry violations, computers, the internet and online privacy, telemarketing scams, credit scams and immigration services.