By Travis Decaminada
Key Takeaway: Americans have reportedly lost nearly $30 billion to phone scams over the past year, as fraudsters have taken advantage of the global pandemic to find new ways to separate victims from their money. Beyond phone scams, which appear to be evolving in complexity, other Covid-19 related scams also pose a risk to consumers.
The ISO Emerging Issues team last reported on Covid-19 related scams here, wherein we mention a myriad of different schemes were reportedly taking advantage of current events to victimize people. Of particular note are phone scams. Per the Federal Trade Commission (FTC), phone scams generally involve a person (or robot) calling a potential target while posing as an authority figure, claiming that the person has won a fake prize, or may present some other high-pressure scenario. The goal of the scammer being to simply trick the person into paying a made-up bill, fine, etc, or to hand over their personal information. The FTC recommends, among other actions, that consumers use caution when dealing with suspicious phone calls, to not always trust their caller ID, and to consider call blocking features on their mobile devices.
Of particular note, the FTC mentions that phone scammers oftentimes request unusual payment methods, like gift cards or wire transfers. Per the agency, “Anyone who asks you to pay that way is a scammer.”
However, despite these recommendations phone scams are still common and reportedly cost consumers billions of dollar a year. Per Yahoo Finance:
“About 1 in 6 Americans were scammed by phone over the past 12 months, a recent Harris Poll and Truecaller ID survey of 2,024 adults found, with the average amount lost increasing to $502, up from $351 the previous year. Overall, Americans lost $29.8 billion to phone scams last year.”
The article goes on to note that some scammers reportedly used the limited supply of personal protection equipment (masks, face shields, etc.) during the early stages of the pandemic as a tool to scare people into buying items they would likely never receive. Further, the article mentions that the most likely victims of pandemic-linked phone scams were between the ages of 18 and 44 – interesting in that many may assume senior citizens were the most vulnerable group of targets.
Types of Phone Scams
A different article from Business Insider summarizes some common phone scams. Namely:
- Internal Revenue Service (IRS) scams – Wherein a caller pretends to be from the IRS and claims that a person owes back taxes which they must pay immediately or face severe consequences.
- Grandchild in distress scams – A scammer may pretend to be the grandchild of an elderly person calling to ask for money to get out of a bad situation.
- Free prize! scams – Wherein a phone call, sometimes automated, tells a victim that they won a fictional prize, like a free cruise, but insists that the “winner” either pay a fee up front or submit their personal information.
- Disaster or Charity scams – Some particularly nefarious scammers may even take advantage of major disasters, calming to be collecting money for relief efforts after a catastrophe occurs.
- Tech Support scams – A scammer may pretend to be unsolicited tech support and use that as a ruse to infiltrate a person’s computer, thus gaining access to their financial and/or personal information.
- Credit card or bank imposters – A scammer may pretend to be from a legitimate business, like a bank or utility company, and try and extort money from a victim with a made-up bill.
- Jury duty scams – Reportedly, some scammers are even trying to convince people that they missed jury duty and must pay a fee.
Beyond the Phone
Per CNBC, in general, the Covid-19 pandemic has been linked with a tremendous amount of fraud. Reportedly, over 325,000 individuals filed a fraud complaint with the FTC this year. Fraudsters have allegedly taken advantage of increased online shopping during the pandemic, in addition to efforts to steal stimulus payments. The article notes that child tax credits have recently caught the eye of some scammers and warns parents to take note. Finally, per the article, actual losses may be much higher than described because not all scams are reported to authorities.
Information about common scams targeting seniors from the Department of Justice can be found here.
General information about Covid-19 related scams from USAGov can be found here.