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Consumers lost a record $10 billion to fraud in 2023, Imposter Scam According to the Federal Trade Commission, this is the most common scam.
In 2023, nearly 854,000 people filed complaints with the FTC about imposter scams. This represents 33% of the total consumer fraud reports filed with the agency.
According to FTC data, consumers lost $2.7 billion to such scams in 2023. The average loss is $800.
Experts say imposter scams come in many forms, but have a basic premise: Criminals impersonate someone you trust, convincing you to send them money or obtain information that can then be used to make money.
The Federal Trade Commission said in a recent report that people may falsely claim to be a romantic partner, the government, a relative in trouble, a well-known business, or a technical support expert. Report.
Fraudsters are often part of sophisticated organized crime networks and may contact potential victims via email, phone calls, text messages, mobile apps, social media or traditional snail mail.
There are “really a lot” of imposter scams online
For example, someone pretending to be a government might suggest They work for the Social Security Administration, the IRS, Medicare and even the Federal Trade Commission.Others might say they come from a company like Amazon or Apple and claim there is a problem with your account or your account utility company Threatening to shut down services.Others might say they are close friend or family member and need money for emergencies.
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Experts say emerging and improving technologies such as artificial intelligence and voice replication are making these scams more convincing.
“These scams have certainly always existed, but the internet has really fueled them,” said John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League. “Scammers seem to be getting more sophisticated in their tactics. The more skilled you become.”
Additionally, imposter scams have a low barrier to entry for criminals, which could be another reason for their surge, said Hardeep Rai, product director at Feedzai, a fraud detection service used by financial institutions.
“You get a bunch of phone numbers and you call them,” Rye said. “In that sense, this is an infinitely scalable fraud.”
Older people tend to lose more money
Older victims are less likely to report losing money to various types of fraud than younger victims, but their typical losses are higher. For example, victims 80 and older suffered an average loss of $1,450; by comparison, typical losses for those under 70 were no more than $500.
The FBI reported last year that a subset of imposter scams – a type of tech support scam known as “ghost hacking” scams – were On the rise nationwide, “significantly affecting” older Americans.
This type of cybercrime is multi-layered: initially, scammers often pose as computer technicians from well-known companies and convince victims that they have serious computer problems, such as viruses, and that their financial accounts may also be at risk from foreign hackers .
The co-conspirators then impersonated financial institutions or U.S. government officials to convince victims to move funds from allegedly risky accounts to new “safe” accounts under the guise of protecting their assets.
The FBI says these tech support scams often wipe out seniors’ entire bank, savings, retirement or investment accounts.
“This is money that people have spent their entire lives accumulating,” Breault said. “For many victims, they don’t have time to recover: they are elderly or people with limited financial means.”
In addition to financial losses, “we know fraud can cause severe emotional and psychological harm,” he added.
According to the Federal Trade Commission, cryptocurrencies cause the most fraud losses relative to other payment methods, while bank transfers and payments come in second. In 2023, fraud victims lost $1.9 billion and $1.4 billion respectively through these payment channels.
In these cases, consumers often have limited legal recourse to recover their funds: Breyette said victims who are tricked into authorizing a transaction (i.e., voluntarily sending money to criminals) typically receive less financial protection than those who are defrauded of unauthorized transactions. Victims who are defrauded of transactions should be weak.
How to protect yourself from imposter scams
Rye said the most effective step consumers can take to protect themselves from imposter scams is to “pause and verify.”
Scammers prey on fear and urgency, hoping to trigger a knee-jerk emotional reaction in their victims.
“They’re playing a nasty mind game,” Rye said.
Consumers who receive an unsolicited message from someone – even someone they know – asking them to transfer money or make a transaction should pause, consider the request and avoid being pressured, he said. This could take fraudsters off script and remind consumers to make rational decisions, he added.
“It’s worth being skeptical,” Breault said.
They are playing a nasty mind game.
Hardeep Rai
Feedzai Product Director
Additionally, experts say consumers should verify who they are communicating with.
Don’t respond to unsolicited messages, Breault said. Instead, call the official number listed on your bill or on the back of your card and ask a representative to verify the accuracy of the initial communication.
Likewise, do not click on links in unsolicited messages or pop-ups or call numbers; independently search for the respective official website or other communication channels.
In this case, “you’re the one controlling that communication,” Breault said.
“It’s easy to think this can’t happen to you,” Rye said. “But everyone is susceptible to fraud. Fraudsters are very, very sophisticated.”
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