It is important for people to know the steps to avoid falling victim to these sophisticated fraudsters.
The Federal Trade Commission (FTC) reported a sharp increase in reported losses from scams committed by individuals impersonating businesses and government agencies, and during the first half of 2023 alone, victims suffered $1.3 billion in financial losses.
Many scams begin with a phone call or message asking people to move or transfer money supposedly to protect their savings, letting them know they are from their bank, or a well-known company such as Amazon or Microsoft, or a government agency.
During the videoconference “Steep Rise in Losses from Imposter Scams” organized by Ethnic Media Services, FTC officials discussed the top scams by imposters posing as government entities or companies, how to spot them and how to report them.
Emma Fletcher, a data researcher at the Federal Trade Commission, said that last year they received 2.6 million reports of impersonation scams in a wide variety.
“This included scams from individuals impersonating reputable businesses, government agencies, including the FTC; or someone they know, such as a family member or friend. In the first half of the year alone, they received 360,000 reports of impersonation scams, with $1.3 billion in reported losses.”
He said this is just the tip of the iceberg as research indicates that less than 5% of people who experience a scam, report it.
“The average loss from these scams in the first half of the year was $800, but we are getting more and more reports of scams that are really taking over. People have had their bank accounts emptied, even their retirement accounts.”
He specified that where losses have been seen the most are in scams committed by characters posing as businesses and government agencies.
“What is really worrisome are the tactics the scammers use. Phone call scams are on the decline, while text messages and emails are on the rise, but the ultimate goal is to catch people on the phone, via text or email.”
He noted that scams that impersonate a business, pose for example as a bank alerting you, that you have a suspicious charge on an account, and when you respond, the situation escalates quickly and becomes more serious.
“They tell you that your account is at risk, which of course is entirely false, and then they pass you off to a government agency. The idea is to play on your emotions, to create a sense of urgency and alarm so you can’t think clearly.”
He said people in the end, thinking they are protecting their money, end up with empty savings accounts.
“We are also seeing huge losses from impersonation scams that ask people to go to bitcoin ATMs and deposit cash. The scammers even call these machines ‘federal security lockers,’ which goes along with the story that they are directing you to the machine to protect your money.”
Another form of the scam is to pop up a security alert on the fake computer that appears to be from Microsoft or Apple, and a number to call to have the problem resolved.
“The second step is escalation. Once they call, they are told that the situation is really very serious; and things vary getting to the point of people creating pages that look very real to impersonate entities like the U.S. Marshals.”
He even mentioned that they have had reports that as part of these frauds, there are people who pay in cash and even with gold bars to couriers who come to their homes.
“During this process, people are coached to stay on the phone and lie to those who try to intervene.”
He said there are many types of impersonation scams in circulation. To learn more, visit: https://www.ftc.gov/news-events/data-visualizations/data-spotlight/
Kati Daffan, assistant director of the Federal Trade Commission’s Division of Marketing Practices, said cryptocurrency ATMs, look like any other ATM, and are in any neighborhood store.
“The difference is that they don’t take your cash but are used to buy and transfer cryptocurrencies; and there is no government agency overseeing these ATMs.”
He noted that under a new FTC rule on imposters, it is now an explicit violation to pretend to be a government official, or a business.
Therefore, he expounded that this rule will give them much stronger tools to combat scammers impersonating government agencies and businesses.
“Most importantly, it will allow us to bring cases, to recover people’s money at the hands of scammers.”
But he said that even before this rule, they have sought to hold scammers accountable for their scams.
He said the first case they used the new rule was with people who received communications from someone pretending to be from the U.S. Department of Education, with a final notice to get a student loan forgiveness, then put them on to talk to a telemarketer, whose job it was to convince people to sign up.
But instead of helping them, he mentioned that they collected hundreds of illegal charges from consumers.
“Our litigation against this operation is ongoing.”
He added that a good place to start educating yourself on the issue of scams committed by imposters is to go to the site: ftc.gov/impostores where you can find a wealth of materials in Spanish.
It is important that you report scams to: reportefraud.ftc.gov.
And remember, only scammers will tell you: Act now, just say what I ask you to say; don’t do this or you’ll be arrested; don’t hang up; move your money to protect yourself; take your money out and give it to ?; go to a bitcoin ATM and buy gift cards.