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.

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.

Meet the 2015 Insurance Fraud Hall of Shame


2015 Insurance Fraud Hall of Shame. Image from www.insurancefraud.org

2015 Insurance Fraud Hall of Shame. Image from www.insurancefraud.org

Every year, the Insurance Fraud Bureau issues its picks for the Insurance Fraud Hall of Shame. If your image of an insurance fraudster is someone who inflates a claim by a few dollars, think again. Meet the 2015 insurance fraudsters, a frightening bunch of cold killers and brazen criminals who commit brutal crimes to try to cash in on insurance policies.

  • Consider nightmare neighbor Mark Leonard and his girlfriend Monseratte Shirley who rigged their home for a gas explosion so they could collect $300,000. Instead, two of their next door neighbors suffered horrifying, fiery deaths. In addition, 30 neighboring homes had to be demolished and 50 more were damaged. A dozen neighbors were injured, and $5 million worth of damage was caused.
  • Consider the nightmare neurosurgeon who performed needless spine surgery on patients to get the insurance money. The profile doesn’t say how many hapless victims came under his knife but it must have been quite a few: His bogus claims to health insurers totaled $32 million.
  • Consider the nightmare Dad who brutally killed his 10-year old son in a botched attempt to collect on life insurance.
  • Consider the nightmare pet boutique owner who tried to torch her store nearly burning a few dozen puppies alive, in the process. Fortunately, she was particularly inept.
  • There are more … a crooked lawyer, a furniture store owner, a cop, a Russian-American crime ring – 9 in all.

These are particularly egregious examples of fraud, but the less dramatic “every day” fraud takes an enormous toll on society too – about $32 billion a year in insurance fraud losses, according to the Insurance Information Institute. Businesses build the cost of losses into product pricing, so honest people end up paying about $32 billion a year to cover insurance fraud.

Overall, public tolerance for insurance fraud has been falling in recent years – fewer and fewer people now think of it as a victim-less crime or an OK practice. But beyond public and tolerance, has insurance fraud itself dropped? Not so much, experts say.

Reporting insurance fraud

If know about insurance fraud, here are ways to report it:

 

Scam-apalooza! Don’t let fraud ruin your holiday


ruined-holidayThe CT commissioner of insurance warns policyholders of a recent insurance phone scam. People are getting calls that their insurance is cancelled and they need to make a credit card payment to reinstate their policy. The commissioner says: Never give out your credit card information to an unsolicited caller.

Good advice – particularly over the holiday. Scams are plentiful in the holiday season so keep your radar set on high. We’ve heard about fake shipping notifications, pyramid schemes, gift card scams, fake charities and plain old package theft. Don’t let scammers ruin your holiday – learn about the most common holiday fraud schemes.

General Alerts

Gift Card Scams

Package Theft

Delivery Scams

Charity Scams

Santa Scams

Holiday Pyramid Schemes

Holiday job Scams

General shopping & holiday safety

You’ve won! Beware of sweepstakes and lottery scams


Money raining from the skyIf there’s one old adage you should take to heart and live by, it is this: If it seems too good to be true, it probably is. Here’s a real world application: You get an email, phone call or letter telling you that you’ve just won a sweepstakes or lottery that you never entered. Do this: throw it out. And if the correspondent asks you for money in the form of a processing or transaction fee, run, don’t walk, to report it to state or federal fraud authorities.

These phony “wins” are part of a network of sweepstakes and lottery scams that are proliferating like bad weeds. They proliferate because, unfortunately, they have a lot of takers — probably because most people have fantasies of winning. Criminals are devious, persistent, and expert at targeting our human foibles: our fears, our hopes, our carelessness – and our greed.

The November Consumer Reports focuses on fraud targeting the elderly, and they feature one article — Anatomy of a Swindle — that outlines how these sweepstakes scams work. And while the issue deals with fraud aimed at the elderly, people of all ages are susceptible to fraud. Read the article, and if you have elderly friends or relatives, make sure they are familiar with these scams too.

The FTC offers a must-read about common warning signs for prize scams. It’s worth a quick read.

The FBI also offers information about frequent scams and tips for avoiding fraud. These three are particularly relevant to this type of fraud:

  • Don’t pay for a “free prize.” If a caller tells you the payment is for taxes, he or she is violating federal law.
  • Always take your time making a decision. Legitimate companies won’t pressure you to make a snap decision.
  • Never send money or give out personal information such as credit card numbers and expiration dates, bank account numbers, dates of birth, or social security numbers to unfamiliar companies or unknown persons.

How to file a complaint

If you have a scam or fraud complaint, here are several ways to file a report.