Criminals armed with personal information are creating crafty schemes to defraud consumers out of their hard-earned money
It took two phone calls to rob an 81-year-old woman of her $80,000 life savings.
The first came from a man claiming to be from the Social Security Administration. The woman thought the call was legitimate because her ID screen displayed the agency’s phone number. Plus the man knew her name and had her Social Security information.
The man said there was a problem with her account, and unless she immediately wired him the money to fix it, her benefits would be cut off. She agreed to send him the funds.
Soon after, she got a call from an accomplice claiming to be an FBI officer. He told the woman that the first caller was an imposter and had cheated her. He then convinced her that he needed money to go after the con man. She agreed to wire him funds as well. Now, in the twilight of her life, she has lost everything.
This is just one of thousands of so-called imposter scams reported each year that target people in the U.S., particularly older ones.
While overall robocall fraud complaints have been declining, the Federal Trade Commission, one of the government entities that regulates the telephone industry, says complaints about scams like the one described above are surging. In May of this year alone, the FTC says it received 46,000 impostor scam complaints.
Also on the rise, according to the FTC, is the average amount of money lost by consumers fooled by these scams.
In total, consumers have reported losses of $285.2 million so far this year, with a median loss of $700, according to FTC data. At this point in 2018, consumers had reported losses of $239 million with a median loss of $500.
“While less and less people are getting scammed overall, the few who are are seeing much bigger losses,” says Ian Barlow, the Do Not Call program coordinator at the FTC. “And there are lots of individual consumers who lose everything.”
Older people are particularly vulnerable to scams.
“This is a really big problem,” says Amy Nofziger, director of the AARP’s fraud victim support. “From a young age we’re taught to respect authority, and so, if you get a phone call saying that your Social Security number has been used in a crime, you’re going to listen because we respect our government.”
Consumers can no longer trust the numbers that appear on their caller IDs, she says, noting that the government will never request payment in the form of a wire transfer or a gift card.
“If someone asks for that, it’s a huge red flag and you should hang up immediately,” Nofziger says.
Criminals Know More About You
Imposter scams are rising because criminals are doing more research—especially on social media—to target and earn the trust of victims they think might result in a big payday.
“Our older adults didn’t grow up with the internet, like I might have, and are really excited to be on there and to be able to share things,” Nofziger says. “But everybody is putting way too much information out on social media, regardless of if you’re in your 50s or under the age of 50.”
She says it’s important that people have their security settings and their social media profiles locked down, and to understand that otherwise, anyone can have access to what we’re sharing online.
Easily available personal information, whether stolen in a data breach or from poorly secured social media accounts, helps criminals add credibility to their cons.
“Robocall scammers know more about you, so they’re targeting you specifically,” says Al Pascual, chief operating officer and co-founder at Breach Clarity, a firm that helps consumers to understand the threat level of a data breach and what steps they need to take to be protected. “They pretend to be a family member in need of money or use other creative ways to get you to pay up.”
And while the elderly are often targeted in these attacks, people of all ages are at risk. The FTC says that consumers under the age of 60 report losing money at higher rates than consumers over that age. But the elderly are still the prime targets because, according to the FTC, older victims tend to lead to bigger paydays for crooks.
4 Popular Phone Scams
There’s a nearly endless variety of frauds being perpetrated. Here are a few of the most popular ones for which you should be on the alert.
The Tech Support Scam
How it works: In this scam, robocallers contact victims impersonating an IT customer service rep, saying there’s a problem with your Apple ID, Microsoft account, or cable company account information. In this fraud, the number is spoofed to make the call look like it’s coming from the company’s 800 number. The caller may even have your name and an old password of yours. Once you’re hooked, they’ll send you to a fake website to steal your money or collect your personal information, or they may fool you into giving it to them directly over the phone. A favorite method is to ask their target to pay using a gift card, which victims will often purchase at a drugstore. Victims will either input the card’s information into a fake website or give the card’s details to the crook over the phone. The scammers then quickly redeem the card’s value.
“We’ve definitely been seeing a high volume of calls purporting to be from the main numbers of tech companies like Apple and Microsoft being used; that’s definitely a trend,” says Jim Tyrrell, senior director of product marketing at Transaction Network Services, which provides robocall detection for big telecom companies, such as Verizon and Sprint. “We’ve seen high-risk calls increase by double digits over the last six months,” he says.
Family Emergency Scam
How it works: Scammers pose as relatives or friends calling in an emergency. By dredging your social media account, they can learn your family relationships, pet names, latest travels, and more. In this scam, once the crooks have the information, they’ll call you, making it seem like a family member, such as a grandchild who may be traveling abroad, is in a faraway jail or in the hospital and in urgent need of emergency funds. The element of urgency can trick you into sending money before you realize it’s a scam. And while you normally might recognize the voice of family members, there are some you may not have spoken to in a long time. Often, crooks ask the victim to keep it secret, preventing victims from checking with other family members about the supposed crisis.
Government Imposter Scam
How it works: It’s one of the most prevalent frauds today. In this scam, criminals use phone number spoofing technology to fraudulently make a government agency’s phone number appear on victims’ phones to fool victims into believing that the IRS or Social Security Administration is calling seeking payment. Crooks often have your name, Social Security number, or other personal information. In the IRS scam, they may threaten to arrest or deport you, or revoke your license if you don’t pay right away. With the Social Security scam, they often say your benefits are blocked and can be reactivated for a fee.
How it works: Scammers call pretending that they’re Medicare representatives or that they’re from a medical supply company. Often they are looking for your personal information and will say they need your Medicare number so that you can get a back or neck brace. Sometimes the scammers will call offering free services or equipment in exchange for your Medicare information. They may say they need your information or money so that you can get a new Medicare card and that if you don’t act quickly, you’ll be hit with fees.
Tools to Protect You
Scary as the threat may seem, there are technological and behavioral tools that may help reduce your susceptibility to being defrauded by robocall phone scams.
To help protect consumers, some phone service providers are rolling out new call authentication technology called Shaken/Stir and are working with software developers to improve analytics and artificial intelligence algorithms that monitor suspicious activity on their networks to more aggressively block unwanted calls from reaching consumers.
“We’re working with the carriers to build out technology to protect their subscribers,” says Gavin Macomber, senior vice president at First Orion, the robocall blocking firm that powers T-Mobile’s tools. “Their customers, overwhelmed by the amount of unwanted phone calls they receive—especially those that are looking to scam them—are putting more of the responsibility onto the carriers to protect them.”
AT&T and Verizon are also working with robocall blocking firms to improve their security.
“Now many carriers are offering blocking at the network level,” says the FTC’s Barlow. “So we really urge consumers to investigate what’s available for them.”
But not all consumers are equally protected, especially those with traditional copper landlines from small providers that haven’t yet switched over to a digital network.
“Too many of these robocalls are from scammers intending to do consumers harm,” says Maureen Mahoney, policy analyst at CR. “While there are an increasing number of effective anti-robocall tools for cell-phone users and consumers with advanced home phone lines, those with traditional landlines have limited options to protect themselves, and they can be costly. That’s why phone companies need to be required to implement effective anti-robocall technology for all phone customers, at no charge.”
How to Protect Yourself
- Hang up. Don’t engage with any robocallers; it can just end up in more calls.
- Don’t trust caller ID. Scammers can make it look like their calls are coming from trusted institutions.
- Don’t pay anyone who calls you over the phone. If you get a call trying to get you to pay money, it’s almost certainly an unlawful robocall.
- Never pay by wire transfer, gift card, or prepaid card over the phone. No legitimate company or government agency is asking to be paid with Amazon, Google Play, or iTunes gift cards.
- Resist the urge to act immediately, no matter how dramatic the story is.
- Report scam calls to the FTC at donotcall.gov or by calling 877-382-4357. The more data the agency has, the more it can focus on enforcement, Barlow says.
- Register for the Do Not Call Registry. This may not reduce calls from criminals who ignore the registry, but it will reduce calls from the lawful companies.