The rest of the top ten were all some form of imposter scam: debt collection scam, sweepstakes scam, tech support scam, government grant scam, etc. About 85% of those reporting scams to BBB recognized them as frauds before any money was stolen, but the Top Ten Scams still account for more than $1 million dollars lost from those who filed with BBB.
|Scam Type||Scam Reports||Percentage|
|Tax Scams (IRS and CRA)||2,413||24.0|
|Advanced Fee Loan||388||3.8|
|Work from Home||261||2.6|
|Fake Check/Money Order||242||2.4|
“Scammers are all basically imposters,” notes Mary E. Power, president and CEO of the Council of Better Business Bureaus, the umbrella organization for 113 local, independent BBBs across the United States, Canada and Mexico. “Three of the top four scams reported to us are those that scare people with threats of arrest, law suits or other frightening actions. Scammers are pretending to be government agents, lawyers, debt collectors, police officers. They engage directly with you, so your best bet to avoid being scammed is to stop engaging. Hang up the phone, delete the email, shut the door.”
How the Scams Work:
- Tax Scam: You receive a phone call from someone who claims to be with the IRS (U.S.) or CRA (Canada). They claim you owe money in back taxes and will be arrested or face legal consequences if you do not pay (usually by wire or prepaid debit card). The caller ID is spoofed to appear to be a government agency or the police.
- Debt Collection Scam: You receive a phone call from someone claiming that you have an unpaid debt. You are threatened with garnishments, lawsuits, even jail time if you don’t pay right now. The scammer will often use caller ID spoofing and pretend to be a government agency or law enforcement in order to further invoke fear.
- Sweepstakes/Prizes/Gifts Scam: You receive a call, letter, or email claiming you’ve won a prize in a sweepstakes. In order to receive the prize, you are instructed to send a fee to cover expenses associated with delivery, processing, or insurance. The prize is not real; you should never have to pay money to claim a prize you have won.
- Tech Support Scam: You are contacted by “technicians” claiming to have detected a virus or security threat on your computer and, for a fee, can log-in and correct the problem remotely. These callers are actually hackers trying to steal money or sensitive computer passwords and/or damage computers with malicious software.
- Government Grant Scam: You receive a phone call, email, or letter informing you that you’ve qualified for a government grant. In order to receive the grant, however, you are instructed to send money as a processing or delivery fee, usually by wire transfer or prepaid debit card.
- Advance Fee Loan Scam: While searching for loan information, you see an enticing ad and click through to the website. You fill out an application and soon receive an email or phone call advising that you are approved for the loan, but you must first send a processing fee, security deposit or insurance. You pay the “fee,” but never see the loan.
- Credit Card Scam: The scammer pretends to be from your bank or credit card issuer, and they claim that you are now eligible for a lower interest rate, or that they need to verify a recent transaction. The consumer provides the scammer with their credit card number and security code to “verify” their identity.
- Work from Home Scam: While looking for a job online, you answer an ad for making big bucks while working from home. The job may be stuffing envelopes, posting advertisements, or shipping packages. You could have your identity stolen when you fill out the employment forms, or even end up handling stolen merchandise.
- Fake Check/Money Order Scam: This can happen any time someone is paying you for goods or services (even when you are selling something online). You receive a check in the mail that is larger than the amount owed, and you are asked to deposit the check and wire the difference. The check is a fake and when it bounces, you’re out the money.
- Lottery scam: You receive a call, letter, or email advising that you have won a large amount of money in a foreign lottery, but you have to pay upfront for taxes and fees. Such lotteries are illegal. Sometimes you may be sent a check as partial payment, but the check will be counterfeit.
Why Scams Work:
There is a science to scams, and it may surprise you to know that scammers use many of the same techniques as legitimate sales professionals. The difference, of course, is that their “product” is illegal and could cost you a fortune. Here are the major techniques they use to draw you in:
Establishing a connection: The scammer builds rapport and a relationship with you. This is usually used face-to-face, as in home improvement scams and many investment scams, but also online romance scams.
Source credibility: Scammer use techniques to make themselves look legitimate, such as fake websites, social media posts, or hacked emails that come from a friend’s account. Most email phishing scams spoof real companies, and many scammers pretend to be a trusted business or government agency in order to add credibility.
Playing on emotions: Scammers rely on emotion to get you to make a quick decision before you have time to think about it. An emergency situation or a limited time offer is usually their methodology. They count on emotional rather than rational decision-making.
What You Can Do:
- Don’t be pressured into making fast decisions.
- Take time to research the organization. Check them out on bbb.org, search online, etc.
- Never provide your personal information (address, date-of-birth, banking information, ID numbers) to people you do not know.
- Don’t click on links from unsolicited email or text messages.
- If you are unsure about a call or email that claims to be from your bank, utility company, etc., call the business directly using the number on your bill or credit card.
- Never send money by wire transfer or prepaid debit card to someone you don’t know or haven’t met in person.
- Never send money for an emergency situation unless you can verify the emergency.
For more information:
- For scam information go to BBB Scam Stopper (bbb.org/scam).
- Report scams (whether or not you’ve lost money) to BBB Scam Tracker.
- For information on investment scams, go to BBB Smart Investing.
- To search for a business in the U.S. or Canada, or to find your local BBB, go to BBB.org.
- For information on charities, go to Give.org (BBB Wise Giving Alliance).
- For information on U.S. government services, go to: USA.gov.
- For information on Canadian government services, go to Service Canada.
ABOUT BBB: For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2014, people turned to BBB more than 165 million times for BBB Business Reviews on more than 5.4 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. The Council of Better Business Bureaus is the umbrella organization for 112 local, independent BBBs across North America, as well as home to its national programs on dispute resolution, advertising review, and industry self-regulation.
Source: Better Business Bureau (BBB)