Imposter fraud and debt collection scams top the list of 2016 fraud reports


This week is Consumer Protection Week – but honestly, consumers should be on their guard about potential scams and fraud every single week of the year. In 2016, people who reported fraud to the Federal Trade Commission (FTC) paid $744 million to scammers – with a median payment of $450. Those are only the reported cases – many people are embarrassed to admit that they fell for a scam. Experts put scam crimes more on the order of $30 to $40 billion a year.

In looking at the top fraud in 2016, the FTC said that of those who specified how they were contacted by scammers, 77% said it was by telephone, with only 8% contacted by email and 3% by traditional mail. That tells you to be alert for suspicious calls.

Also notable in 2016, the FTC reports that for the first time, imposter scams passed identity theft for the number of complaints, and debt collection was the top complaint for the second year in a row.

Imposter scams are scammers who pretend to be someone else: the IRS, debt collectors, tech support – the FTC has posted examples of different types of imposter scams that have been reported.

Why are people susceptible to fraud?

Scammers are masters of human nature and prey on our weaknesses. They appeal to fear by posing as the IRS, debt collectors or other authorities, making harsh threats and you-must-act-now demands. They exploit our hopes of winning or getting something for free or for an incredible price. They take advantage of naive computer users with popups, phishing scams, unsafe apps or links and social media targeting.

In What Makes People Fall for Online Fraud? Rick Paulas reports on an AARP survey about risk factors involved with falling for Internet scams.

” … there’s a correlation between fraud victims and the activities people perform online. For instance, those willing to post their birth dates or relationship status on social media are 8 percent more likely to be victims of online fraud than those who keep mum. Those who sign up for free trial offers are 10 percent more likely to get swindled. People who click on pop-ups are 16 percent more likely. “Victims tend to be more open,” Shadel says. “But people wise up. They realize you shouldn’t be clicking on every pop-up you get.””

The article 10 Types of People Who Fall for Scams, Schemes and Cons by Marilyn Lewis says that:

Victims include older people, yes, but also younger ones. Educated and undereducated. White-collar and blue-collar. Dumb people and smart ones. The Stanford study says:

An emerging conclusion in profiling research is that there is no generalized profile of a “typical” victim. Profiling studies that analyze victims by type of scam, however, have yielded a clearer picture of scam-specific profiles. In other words, while everyone is vulnerable, some people may be more vulnerable to particular scams than others.

The article is very interesting, examining various demographic groups and what type of scam is likely to be most successful for that group. For example white men are the most likely victims of investment fraud; lonely people are more susceptible to dating fraud.

Even relatively sophisticated and alert people can let their guard down and fall for a scam. One way to keep suspicion high is to periodically review the FTC Scan Alerts to learn the latest scams that are circulating. It’s also important to report fraud should yo be come a victim. That is how the authorities catch criminals and alert others about new schemes.

Crime alert: more on card skimming fraud


card skimming fraud

Card skimming fraud is a type of fraud that uses devices to read your credit card and steal your pin or password. It’s a type of theft that frequently happens at ATM machines, but it also is common at gas stations and any place that you swipe the magnetic strip of a credit or debit card. The latest scene of the crime are self-checkout stations in supermarkets.

The problem is that data on your credit card is stored in magnetic strip on the back of your card and the magnetic strip is not encrypted. Cheap devices are readily available to scan that data. Devices used to be large and unwieldy, but have become increasingly smaller and cheaper. These devices can be cleverly disguised and affixed to retail outlets that read your cards. They can also be used anyplace your card is scanned.

To foil card skimming fraud, new cards contain chips with encrypted data so those cards are safer in theory. We say “in theory” because it’s an enormous undertaking for banks, gas stations and retailers to replace the card reader stations and convert to chip-enabled card readers, so many still rely on reading magnetic strips. As long as your credit cards have a magnetic strip, they are still insecure.

This ABC News video clip is about 8 minutes long  –  a good investment for a quick education about what skimming is, how to spot it and steps to take to prevent it.

Here are skimming fraud prevention tips we’ve gleaned from the experts over the years.

  • Use well lit, well-trafficked ATMS and gas stations with security cameras; go inside banks; be particularly careful at freestanding ATMs.
  • When using an ATM or paying at the gas pump, check for anything unusual and be alert for any devices that may be affixed. Look for anything that protrudes from or seems affixed to the machine, any color differences, any unusual stickers. Look for nearby mirrors, pamphlet holders, speakers, or devices that could house a camera.
  • Always cover the keypad with your hand to shield from any cameras that may be trying to record your PIN. It’s also a good idea to touch several keys with your fingers to thwart anyone trying to grab your pin via infrared heat detector readers.
  • Don’t let anyone “help you” at an ATM or credit card reader.
  • When paying at a restaurant or any retail outlet, don’t let anyone walk away with your card, have them read the card in your presence so that they don’t harvest your information with a small pocket-skimmer.
  • Check your bank account regularly to ensure funds have not been taken.
  • If you spot anything suspicious at an ATM or a  self-service gas or grocery kiosk, alert the business or the police right away.

Fraud alert: Thieves are trying to steal your medical identity!


medical id theftYou’re no doubt aware of the dangers of identity theft, but have you heard of medical identity theft? It appears that thieves are not only eager to steal your personal information to make purchases, intercept your tax returns, open accounts or commit crimes, they’d also like to pose as you to get expensive medical services. It’s a serious, growing crime that can put your financial and physical health at risk. The Federal Trade Commission (FTC) describes medical identity theft this way:

A thief may use your name or health insurance numbers to see a doctor, get prescription drugs, file claims with your insurance provider, or get other care. If the thief’s health information is mixed with yours, your treatment, insurance and payment records, and credit report may be affected.

Consumer Reports offers a good article on The Rise of Medical Identity Theft, noting that there were an estimated 2.3 million cases identified in 2014. They explain that it’s a crime that can go well beyond financial repercussions:

But there’s another, far more dangerous problem with medical identity theft: The thief’s own medical treatment, history, and diagnoses can get mixed up with your own electronic health records—potentially tainting and complicating your care for years to come. And that isn’t a hypothetical problem.

“About 20 percent of victims have told us that they got the wrong diagnosis or treatment, or that their care was delayed because there was confusion about what was true in their records due to the identity theft,” says Ann Patterson, a senior vice president of the Medical Identity Fraud Alliance (MIFA), a group of several dozen healthcare organizations and businesses working to reduce the crime and its negative effects.

Scary, right? Even scarier is that the thieves may be in your house right now! Consumer Reports notes that medical identity theft is sometimes called “friendly fraud” because it’s often perpetrated by family members. They cite a study by the Poneman Institute in which 47% of the respondents said the theft was perpetrated by a relative or someone else they knew, while only 10% was attributed to a data breach and 12% due to having been tricked into providing personal information.

Like identity theft, anyone can be a victim, but two groups are at particularly high risk:

  • The elderly, who may be more susceptible to scams
  • Children, whose health and financial records may not be guarded as carefully they should be

What can you do to protect yourself against this type of theft? Here’s a good place to start. Consumer Reports offers 10 Ways to Guard Against Medical Identity Theft. As with anything else, half the battle is awareness. Understanding the danger and taking basic precautions can help. Here are some other good medical identity theft resources:

When guarding against summer burglaries, don’t forget your yard


There are more than two million home burglaries per year, according to the FBI, and the highest percentage of burglaries occurs during the summer months. It’s not hard to figure out why. It’s peak vacation season so a lot of homes are empty; plus, with warm weather, there’s an increase in the number of doors and windows left open, which make accessibility easier. According to Safeguard the World:

  • About 30 percent of all burglaries are through an open or unlocked window or door.
  • Windows are left unlocked at a much higher rate than doors.
  • An open window that is visible from the street may be the sole reason that a house is targeted.
  • An open window with only a locked window screen is particularly inviting to thieves. Access is quick, easy and silent.

See more statistics along with prevention tips.

One other seasonal vulnerability is highlighted in a recent survey conducted by one of our insurer partners. American Modern Insurance points out that in good weather, there are simply more unsecured “backyard valuables” lying around: bikes, sporting equipment, grilles, lawn furniture – all relatively easy targets for thieves. Copper coils from air conditioners and other metallic items can be sold for scrap metal.

“An American Modern survey of more than 500 adults living in the US, indicated that 31 percent do not take proactive steps to secure property and personal items located on the outside of the home. Additionally, the survey indicated that respondents were most likely to take steps to protect their electronics (42%), as well as jewelry and watches (23%) inside their homes, and less likely to do so with outdoor/recreational items (18%). The survey was conducted through Google in June 2016.”

In their press release, American Modern offers 10 tips, which we reproduce here:

1. Install strong door locks and deadbolts. Choose a lock that is proven to withstand drilling or picking.

2. Reinforce doorjambs and strike plates. Most often, structural failures occur when strike plates separate from doorframes.

3. Apply window security film. This prevents glass breakage and can deter a smash-and-grab.

4. Lock your windows. If your windows don’t already have locks, add them. Or, drill small holes into the upper and lower sashes at their overlap point and insert removable eyebolts.

5. Close and lock your shed and garage every night. Make sure your vehicles are under cover and secure before you head out of town. On a smaller scale, stolen tools and lawn equipment are also a lucrative theft item, so ensure these items are securely stored away. The garage can also serve as a common entry point for burglars.

6. When away from home, don’t advertise your absence. Put temporary holds on mail and newspaper delivery, or have a trusted neighbor collect them. Put lights on staggered timers. Also, avoid posting on social media about your travel plans, which can increase the risk of burglaries and break-ins while you are away from your property.

7. Keep valuables outside the bedroom. Thieves on the hunt for valuables will likely make the master bedroom their first stop to scout out jewelry or cash. Keep these items in a different room instead.

8. Put in motion-activated outdoor lighting. Make sure entry points are especially well-lit.

9. Organize a Neighborhood Watch. Meet your neighbors and deter theft!

10. Vehicles and items left in them. Most vehicle-related thefts take place in under 20 seconds. Never leave loose items on the seats or dash; lock them in the trunk or, better yet, take them inside with you. If you have a garage at home, use it. If you must park on the street, install a loud alarm system with a visible, blinking dash light.

Welcome to prime tax scam season!


illustration of online crookWhen it comes to ID theft, you really can’t afford to relax – the criminals who are out to get you certainly aren’t slacking off: In 2014, there was a new identity fraud victim every two seconds. In the same year, $16 billion was stolen from 12.7 million U.S. consumers. (See III on the Scope of Identity Theft).

Between January and April, IRS impersonators and tax scammers are out in full force. Scams often happen via aggressive phone calls, email phishing and spam, phony online websites, or even via social media. Some of the common scam pitches to watch out for:

  • Get a bigger return and get it faster … just click or sign here
  • You need to update your online file .. give us your Social Security number
  • This is the IRS. You owe big bucks in back taxes – pay now or we’ll arrest you
  • You owe a small amount in taxes or fees, here’s a quick way to pay that online so you don’t hold up your refund
  • Please make a tax-free donation to <> charity or <> political fund.

Two particularly common types of fraud are IRS Impersonators – usually threats by phone – and tax preparer scams. You can read about the most common types of tax fraud from last year’s IRS Dirty Dozen.

Consumer Reports shares some good ideas to foil the scammers. We like this one:

Thieves usually claim tax refunds by filing taxes before their victims do. So another way to protect yourself is to file long before the tax deadline, which is Monday, April 18, this year (April 19 in Maine and Massachusetts).

Here are some other tips to avoid becoming an ID-theft victim:

  • Don’t trust the number that shows up on your caller ID or email identification. These can be spoofed. Don’t click on any links or give out any info. Instead, go directly to the website or call the organization yourself to make payments or donations.
  • Don’t give out credit cards, dates of birth, social security numbers or any other sensitive information to callers you do not know. Never send that information by email, which is insecure.
  • Create secure passwords. Use different passwords for any accounts involving sensitive information or payments. That might seem like a hassle, but this small inconvenience pales in comparison to the troubles you will have if someone steals your ID.
  • Review your credit card and bank statements regularly. Check free credit reports annually with this authorized site.
  • Avoid making financial transactions over insecure public wifi networks.
  • Ensure that your browser is up to date and security patches applied.
  • Keep an eye out for elderly relatives or friends – the elderly are often specifically targeted for fraud.