'Hey, you're a phony!': Imposter fraud is taking off
More consumers are falling prey to scams in which con artists pretend to be someone trustworthy, like a government official or service technician, in order to fraudulently seek money, the Federal Trade Commission reports.
Incidents involving imposters perpetrating these scams have become so numerous that last year they were second only to complaints about crafty debt collection practices in an annual tally compiled by the FTC. In all, more than 3 million total complaints were received.
The latest report marks the first time these so-called "imposter scams" surpassed identity theft in the annual FTC report on complaints. The FTC said it received more than 400,000 complaints about imposter fraud.
U.S. consumers lost a total of $744 million to fraud in 2016, the FTC says. Scams including not just people pretending to be someone else, but also advance payments for credit services, work-from-home job offers, buyers' clubs, bogus charities, foreign money offers, Internet auctions, investment opportunities, mortgage foreclosure relief, "free "prizes and tax prep.
In 58% of the cases, unsuspecting consumers sent money to the con artists by wire transfer. The median amount lost was $450.
"It’s effective," said Monica Vaca, an acting associate director of the FTC. "We always tell people to take a deep breath. Take your time. If you get a scammy call that’s suspicious or weird, tell someone about it."
She says the scams can take a variety of forms. Someone posing as a tax collector or official inside some government agency might accuse a consumer of owing money in order to try to lure them into offering a payment. Or an imposter might tell a consumer that they've received a cash windfall, but first they need to pay fees in order to get it.
"It gets people very, very nervous when they hear that they’re in trouble," Vaca says.
Of the reports that listed the method of initial contact, some 77% were by phone. Only 8% of the scams involved email.
Florida had the most fraud and miscellaneous complaints per capita. Georgia, Michigan, Texas and Nevada rounded out the top five.
Older Americans are most vulnerable. People in their 60s were scammed most often, followed by those in their 50s. And it isn't just strange inquiries purportedly from overseas. Some 97% of the scams are believed to originate in the U.S., the FTC found.
Experts aren't surprised at how imposter scams are taking root.
"Everything is based on social trust. We tend to accept things when people ask us," said Luca Cian, assistant professor of marketing at the University of Virginia. Older people, in particular, "are not used to the scam and they think, 'Oh my God. It's really true.'"
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