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According to the Federal Trade Commission, consumers lost a record $10 billion to fraud in 2023, and imposter scams were the most common scam, according to the Federal Trade Commission.
In 2023, nearly 854,000 people filed complaints about scams with the FTC. This represents 33% of the total consumer fraud reports filed with the agency.
According to the FTC, consumers lost $2.7 billion to such scams in 2023. The average loss was $800.
Imposter scams come in many forms, but they have one basic principle: criminals pose as someone you trust in order to convince you to send them money or to get information that can later be exploited to make money. say experts.
People may falsely claim to be a romantic interest, the government, a relative in distress, a well-known company or a tech support expert, the FTC said in a recent report.
Fraudsters, who are often part of sophisticated organized crime networks, can contact potential victims through channels such as email, phone calls, SMS, mobile apps, social media or traditional mail.
The internet has “really accelerated” fraud scams.
For example, government fraudsters might suggest working for the Social Security Administration, the IRS, Medicare, or even the FTC. Others may say they are from a company like Amazon or Apple and claim there is something wrong with your account, or that your energy provider is threatening to shut off service. Others may say they are a close friend or family member and need money for an emergency.
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Emerging and improving technologies like artificial intelligence and voice cloning have made these scams more convincing, experts say.
“These scams have actually been around forever, but the Internet has really amplified them,” said John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League. “The scammers seem to be getting better at what they do.”
Additionally, fraudulent scams present a low barrier to entry for criminals, another likely reason for their prevalence, said Hardeep Rai, product director at Feedzai, a fraud detection service used by financial institutions.
“You get [hold of] “A series of phone numbers and calls,” Rai said. “In that sense, it’s an infinitely scalable scam.”
Older adults tend to lose more money
Older victims were less likely than younger ones to report losing money from all types of fraud, but their typical loss was higher. For example, victims aged 80 and older had an average loss of $1,450; In comparison, the typical loss for those under 70 did not exceed $500.
The FBI reported last year that a subset of imposter scams — a type of tech support scam known as “phantom hacker” scams — was on the rise nationwide and was “significantly affecting” older Americans.
Such cybercrime is complex: First, fraudsters usually pose as computer technicians from well-known companies and convince the victims that there is a serious computer problem such as a virus and that their financial accounts could also be at risk from foreign hackers.
Accomplices then pose as officials from financial institutions or the U.S. government and persuade victims to move their money from supposedly compromised accounts to new “safe” accounts under the guise of protecting their assets.
According to the FBI, these tech support scams often wipe out seniors’ entire banking, savings, retirement or investment accounts.
“This is money that people have worked a lifetime to build,” Breyault said. “Many victims do not have time to recover: they are elderly or people with limited resources.”
In addition to financial loss, “we know that fraud causes significant emotional and psychological harm,” he added.
According to FTC data, cryptocurrencies accounted for the largest fraud losses compared to other payment methods, while bank transfers and payments came in second. In 2023, fraud victims lost $1.9 billion and $1.4 billion, respectively, through these payment channels.
Consumers in these cases often have limited legal recourse to get their money back: victims who are tricked into authorizing a transaction (i.e., voluntarily sending money to criminals) generally enjoy weaker financial protection than those through unauthorized ones Transactions were fraudulent, Breyault said.
How to protect yourself from scams
The most effective steps consumers can take to protect themselves from fraudulent scams is to “stop and check,” Rai said.
Scammers take advantage of fear and urgency, hoping to trigger a knee-jerk emotional response in victims.
“They are playing a nasty psychological game,” Rai said.
Consumers who receive an unsolicited message from someone—even if it appears to be someone they know—requesting them to transfer money or complete a transaction should pause, think about the request, and not push themselves to do so let it go, he said. This could lead a fraudster to deviate from the scheme and remind consumers to make their rational decisions, he added.
“It’s worth being skeptical,” Breyault said.
They are playing a nasty psychological game.
Hardeep Rai
Product Director at Feedzai
Additionally, consumers should check who they communicate with, experts say.
Don’t respond to an unsolicited message, Breyault said. Instead, call the official number on your bill or on the back of your bank card and ask the representative to verify the accuracy of the original notice.
Also, do not click on a link or call a number in an unsolicited message or pop-up window. Find the respective official website or another communication channel yourself.
In this case, “you are the one controlling that communication,” Breyault said.
“It’s easy to think this wouldn’t happen to you,” Rai said. “But everyone is vulnerable to fraud. Fraudsters are very, very advanced.”
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2024-02-15 20:00:22
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