Amid Soaring Consumer Fraud, Step up Your Vigilance
And share tips with the elderly, who are most vulnerable
The COVID pandemic was no match for the scamsters intent on ripping off unsuspecting consumers.
The Federal Trade Commission (FTC) reported that last year it received more than 2.1 million reports of consumer fraud, up 23% from 2019. The reported loss from the fraud claims was more than $3.3 billion, an 83% increase from 2019.
On a population-adjusted basis, the FTC says younger adults were much more likely to file an online fraud complaint than older folks. But it’s seniors who took the biggest hit. The median loss reported in complaints from people younger than 40 was less than $325. For complaint filers from age 70 to 79, the median reported loss was $635. And for the 80+ crowd the median loss was $1,300.
It’s not a love connection, it’s a scam
Maybe it was the confinement during the pandemic that fed a desire to connect digitally, but last year scamsters were all over dating/hookup apps. Thieves posing as an interested party charmed folks into thinking there was some emotional connection, and then once the wheels had been greased, got the unsuspecting victim to send a preloaded gift card or to wire money. Sometimes the money was supposed to be for a plane ticket to come visit, or to deal with a legal problem or gambling debt, or to pay for a needed surgery.
The FTC said the 70-79 age group who filed fraud reports said they lost $40 million to romance scams. (The second most costly scams reported by the 70-79 group were phony lotteries and sweepstakes, at nearly $28 million in reported losses.)
Another big source of consumer rip-offs was fraudsters posing as officials of a government agency, suggesting that the victim owed the government money. The FTC said nearly 180,000 complaints last year were such “imposter scams.” The median loss reported on these complaints was $1,250.
Last year more than 63,000 cases of imposter fraud were reported to the FTC where the scamster posed as being from the Social Security Administration. Total loss among those who filed this report was $22 million. But it’s not hard to imagine losses were higher, given that many retirees may not be hip to the online complaint database.
Thieves also posed as legitimate businesses, such as banks or credit card companies. It’s easy to glean some personal info through online databases or outright identity theft, so scamsters appear legit because they know something specific or true about the victim. If they know you have a credit card from a specific issuer, they send what looks like an official email, or they manage to rig the caller ID to say it’s in fact a call from that business.
How to outsmart imposters
Nearly $1.2 billion in consumer fraud losses reported to the FTC last year were some type of imposter scam. Adopt a habit of Don’t Trust, Verify:
Wait for a government snail-mail letter. When a government agency has a problem with your account, it will send an official letter in the mail. It won’t call you out of the blue and threaten you if you don’t pay up pronto. If you get one of those unsettling phone calls, assume it is a scam. Hang up and then check with the agency, by looking at one of your most recent statements and calling the service number directly, and ask if there’s anything you need to know about.
Ignore caller ID. Scamsters know how to game the phone system so the display looks legit. If you get a call from a business — bank, credit card, etc. — you have an account with, politely refuse to divulge anything, and hang up. Then log in to your account or call the customer fraud number on your statement or the back of your credit card. Tell them what just happened, and ask if there is indeed any problem.
Be suspicious of wire transfer or gift card requests. A popular trick scammers use is to ask victims to send them a preloaded gift card to pay for something, or to wire a payment. Fraudsters love both types of payments because once they are set in motion, they are nearly impossible to undo. If you ever get far enough along in a conversation where either a wire transfer or gift card payment is suggested, your scamster antennae should be on hyper alert.
And for those with an elderly relative or friend, perhaps the most effective advice you can give them is to have them rely on you. Tell them that if they ever get a call or email telling them they owe money, that their first and only move should be to clue you in and let you investigate.
If they receive a phone call asking for money — the most common way seniors are targeted — suggest that they take down a call-back number, and tell the person calling that someone will get back to them. That someone is you. That move alone can stop a scam cold. And even if the scamster is so bold as to give out contact info, with you on the case, it’s far less likely your loved one will be taken advantage of.