Don’t Fall For The Imposter

Cybersecurity, Financial Planning, Yeske Buie MillennialPosted on April 5th, 2017No Comments

Written By: Cristin Etheredge, FPQPTM

The Federal Trade Commission (FTC) recently released their annual summary of consumer complaints and consumer protection statistics for 2016. For the first time in the 20 years that the FTC has been keeping records, imposter scams surpassed identity theft among reported consumer complaints. When you combine these two issues, the FTC complaints exceeded 800,000 in 2016.

Imposter scams are situations where a hacker pretends to be someone that they are not. The imposter usually poses as someone you are likely to trust like a government official, bank representative or computer technician; and then they fraudulently seek money.

Statistics show that one of the primary ways fraudsters will likely try to reach you is by telephone. The complaint data that the FTC collected showed 77% of reported fraud was done by phone, 8% by email, 6% through the internet and 3% through postal mail. These scams cost consumers a reported $744.5 million dollars last year, or an average of $1,124 per complaint – and these numbers are only from the fraud that was reported to the FTC.

Despite the rise in reported scams, identity theft complaints dropped by 19% when compared to 2015, and the drop is largely attributed to the public becoming more knowledgeable and diligent with safeguarding their personal information. With that in mind, we share a few of the most common scams that fraudsters are using right now to provide you with ways to safeguard yourself against imposter scams and help ensure that you don’t fall for the imposter.

  • IRS Scam 
    • Fraudsters contact you and claim that you owe money. Typically, imposters will threaten legal action unless you make an immediate payment through a money order, cashier’s check or prepaid debit card. Keep in mind, real IRS agents will always first contact you by postal mail before any other source, and the agency accepts both checks and credit cards. Read more in Tips to Thwart Tax Thieves.
  • Other Government Officials 
    • As more people learned of the fraudulent IRS scams, fraudsters broadened their horizons. Claims have been made that imposters have been posing as any federal government employee to “verify” personal information via phone, including the US Dept. of Health and Human Services. Scammers are able to fake people into believing they are legitimate, because they are able to “spoof” the caller-id to appear legitimate. Common tales that they will say are you’ve ‘won’ a lottery or sweepstakes or that you owe a fake debt. Keep in mind, like the IRS, the federal government will likely contact you via postal mail first, and federal employees will not demand personal information.
  • Tech Support 
    • In these instances, either you get a phone call or a popup on your screen that a problem or security issue with your computer has been “detected”. The scammer’s goal here is to convince you to download malicious software or create a remote session to give them the ability to control the machine. In both of these cases, the fraudster is trying to either steal your data or hold it hostage until you pay a ransom. Keep in mind, legitimate tech support is not going to contact you unless you have previously contacted them about an issue.
  • Can you hear me now? 
    • The phone rings from an unknown number, and the first thing you hear is “Can you hear me now?” These are pre-recorded calls, and the aim is to record your voice saying “yes” and other things that fraudsters could potentially use to obtain money. Do not say anything, just hang up. If your numbers are not currently on the Do Not Call registry, consider adding them. Also consider becoming familiar with blocking unwanted calls. Keep in mind, if you respond to these calls in any way (like pressing 1 to speak to someone), it is likely to lead to more robocalls.
  • Virtual Kidnapping 
    • Using social media as their tool, fraudsters have taken up the task of claiming that they have kidnapped a loved one and demand immediate payment. The FBI calls this virtual kidnapping. This scam has been around for a while, but it recently has resurfaced. Read more from the FTC. Keep in mind, if the call feels real, hang up and get in touch with the relative or friend in question.
  • Grandkid 
    • Fraudsters purchase marketing lists just like large retailers do, but fraudsters use the lists to find vulnerable populations they might be able to exploit. 37% of imposter scam victims last year were over the age of 60, and fraudsters are using tactics like the love of grandchildren to scare their victims. What tends to happen in these scams is a person will receive a call from an unknown number and the person will pretend to be a young relative out of town and in trouble. The caller will plead with the grandparent not to tell anyone and claims that the only way to get out of the bind is to receive a wire transfer. Keep in mind, much like the last section, call or text the grandchild directly (how often are they without their mobile?)!
  • Online Romance
    • While online dating has become commonplace, so has the ability for con-artists to take advantage of those looking for love. Typically what happens in this scenario is that a person a distance away contacts you. Quickly, they become enamored, claiming that you’re the man/woman of their dreams and they would love to meet, BUT… (they are out of town/country, have a sick or dying relative, stationed abroad). Shortly after, requests for money will start. Keep in mind, if you provide cash to someone you have not met yet, often another emergency will require more.

 Tips to Remember

  • Consider how the person on the phone is asking you to pay. 58% of fraud victims last year paid via wire transfer and some fraudsters were able to get their victims to pay with prepaid debit cards (7%), which is difficult to trace or to reimburse victims.
  • If possible, let unknown numbers go to your voicemail. Fraudsters are unlikely to leave you a voicemail. Consider services like Hiya or Nomorobo to have no more “robo calls”.

For more information on these scams, feel free to review the FTC’s entire 104 page report which includes a breakdown by state, complaint type and age of victims.

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