Category Frauds and Scams

Feb 4 2023

How to Spot a Government Imposter Scam

Scammers are pretending to be government employees. They may threaten you and may demand immediate payment to avoid arrest or other legal action. These criminals continue to evolve and find new ways to steal your money and personal information. Do not fall for it! We want you to know how you and your loved ones can avoid becoming victims!

 Be Alert

If you owe money to Social Security, you’ll receive a letter by mail with payment options and appeal rights. They only accept payments electronically through Pay.gov, Online Bill Pay, or by check or money order through its offices. The SSA will never:

  • Threaten you with arrest or legal action because you don’t agree to pay money immediately.
  • Suspend your Social Security number.
  • Promise a benefit increase in exchange for money.
  • Ask you to send gift cards, prepaid debit cards, wire transfers, Internet currency, cryptocurrency, or cash through the U.S. mail.

Know What to Look for

  • The caller or sender says there is a problem with your Social Security number or account.
  • Any call, text, or email asking you to pay a fine or debt with retail gift cards, wire transfers, pre-paid debit cards, internet currency, or by mailing cash.
  • Scammers pretend they are from Social Security or another government agency. Caller ID, texts, or documents sent by email may look official, but they are not.
  • Callers threaten you with arrest or other legal action.
  • Internet scammers may use “phishing” schemes to trick a recipient into revealing personal information by clicking on malicious links or attachments.

For more information, click here.

Teaching Suggestions:

  • Ask students if they or their families have received calls from imposters?  If so, what was their response and how did they handle the situation?
  • Ask students to make a list of schemes scammers use to trick people into revealing personal information?

Discussion Questions:

  1. What should you do if you receive a suspicious call, text, or an email from an imposter?
  2. What can local, state, or federal governments do to minimize these scams and protect people?
Oct 8 2022

Cryptocurrency Investments Scams

Consumers reported losing over $1 billion to fraud involving cryptocurrencies from January 2021 through March 2022, according to a new analysis from the Federal Trade Commission. Fraud reports suggest cryptocurrency is quickly becoming the payment of choice for many scammers, with about one out of every four dollars reported lost to fraud paid in cryptocurrency.

People ages 20 to 49 were more than three times as likely as older age groups to have reported losing money to a cryptocurrency scam. Older age groups, however, reported losing more money when they did report a cryptocurrency-related scam.

Some of the red flags consumers should watch out to protect themselves from scammers`:

  • anyone who claims they can guarantee profits or big returns by investing in cryptocurrency;
  • people who require you to buy or pay in cryptocurrency; and
  • a love interest who wants to show you how to invest in cryptocurrency or to send them cryptocurrency.

The FTC’s latest Consumer Protection Data Spotlight finds that most of the cryptocurrency losses consumers reported involved bogus cryptocurrency investment opportunities, which totaled $575 million in reported losses since January 2021. These scams often falsely promise potential investors that they can earn huge returns by investing in their cryptocurrency schemes, but people report losing all the money they “invest.”

After cryptocurrency investment schemes, the next largest losses reported by consumers were on:

  • Romance Scams: These scams often involve a love interest who tries to entice someone into investing in what turns out to be a cryptocurrency scam.
  • Business and Government Impersonation Scams: Reports show these scammers often target consumers by claiming their money is at risk because of fraud or a government investigation and the only way to protect their cash is by converting it to cryptocurrency.

Reports suggest that cryptocurrency-related scams often begin on social media. Nearly half of consumers who reported a cryptocurrency related scam since 2021 said it started with an ad, post or message on a social media platform.

For more information, click here.

Teaching Suggestions

  • Ask students to make a list of the red flags consumers should watch out for to protect themselves from scammers.
  • Ask students if they, their families or friends have become victims of cryptocurrency fraud.  If so, what was the outcome?

Discussion Questions

  1. Why is cryptocurrency quickly becoming payment of choice for many scammers?
  2. Why do most cryptocurrency-related scams often begin on social media?
  3. What might be some reasons that people ages 20 to 49 were more than three times as likely as older age groups to have reported losing money to cryptocurrency scams?
Sep 24 2022

Beware of Credit-Repair Scams

According to the Federal Trade Commission (FTC), Financial Education Services (FES) has bilked people out of more than $213 million with a scheme that combines charging people for worthless credit repair services and recruiting them to sell the same bogus services to others.  FES also does business as United Wealth Services.

FES claims it can boost people’s credit scores by hundreds of points quickly by permanently removing negative information from their credit reports and adding positive information. But the FTC says FES’s services accomplish little or nothing. For example, FES sends clients form letters to send to credit bureaus to dispute negative items, but the letters don’t include supporting documents so they rarely result in removal of the items.

The complaint says FES charges people $99 up front for its services, plus up to $89 each month. It’s illegal for a credit repair company to charge people before fully performing the services it promises. Also, the complaint alleges, FES doesn’t give people important information they’re entitled to by law, including written information about the total cost of its services and its refund and cancellation policies.

According to the complaint, FES also pressures people to become FES “agents,” telling them they can make tens of thousands of dollars a month selling FES services to other consumers and recruiting them to become FES agents themselves. But, the FTC says, FES’s purported business opportunity requires its agents to pay hundreds of dollars to join and advance in the business. And, the FTC alleges, in classic pyramid scheme style, FES incentivizes recruiting new agents over selling credit repair services. The complaint charges that few people, if any, make the income promised, and many lose money as FES agents.

If you want to repair your credit, Fixing Your Credit FAQs has information about building your credit and spotting scams. And, if you’re thinking about investing in a business that requires you to recruit other investors, read this information about spotting a pyramid scheme.

For more information, click here.

Teaching Suggestions

  • Ask students to make a list of the legal steps to take to improve their credit scores.
  • What are the legitimate resources for low-cost or no cost help to repair your credit?

Discussion Questions

  1. Is it possible for you to boost your credit score by hundreds of points quickly by permanently removing negative information from your credit reports and adding positive information?  Explain your answer.
  2. Discuss the statement: “Sometimes doing it yourself is the best way to repair your credit.”
  3. What is one of the most important step you can take to improve your credit score?
Jun 4 2022

Conned on Social Media? It’s not just you

In 2021, more than 95,000 Americans told the Federal Trade Commission that they’d been scammed with a con that started on social media. In fact, more than one in four people who reported to the FTC that they lost money to any scam said the transaction started with a post, an ad, or a message on a social media platform. And the losses amounted to about $770 million.

Americans reported losing the most money to investment scams (particularly those involving bogus cryptocurrency investments) and romance scams. More than a third of the Americans who lost money to romance scams said it started on Facebook or Instagram.

The largest number of reports came from people who lost money trying to buy something they saw marketed on social media. Most said they didn’t get what they paid for, while some reported ads that impersonated a real online retailer. Reports of social media fraud increased for all age groups in 2021, but people 18 to 39 were more than twice as likely to report losing money than older adults.

Scammers trying to get your money are always looking for new ways to reach people. And they’ll use whatever they know about you to target their pitch. Here are a few actions you can take to protect yourself, no matter which social media platform you use:

  • Try to limit who can see your posts and information on social media. Of course, all platforms collect information about you from your activities on social media, but visit your privacy settings to set some restrictions.
  • Check if you can opt out of targeted advertising. Some platforms let you do that.
  • If you see urgent messages from a “friend” asking for money, stop. It could be a hacker behind that post pretending to be your friend.
  • Don’t deal with a vendor that requires payment by cryptocurrency, gift card, or wire transfer. That’s sure to be a scam.

If you see or experience scam on social media, report it to ReportFraud.ftc.gov.

For More Information, click here.

Teaching Suggestions

  • Ask students if they, their friends or relatives have been scammed on social media.  If so, what have been their experiences?
  • Ask students to make a list of actions they might take to protect themselves from social media scams.

Discussion Questions

  1. Why do many people fall victims to scammers?  What can they do to protect themselves?
  2. What can the federal, state, and local governments do to protect consumers from scams?
May 7 2022

COVID-19 testing scams

Scammers are preying on people looking for COVID tests. Some fraudsters are offering unauthorized test kits. Others are setting up phony testing sites to steal your personal information. The sites may look real with tents and hazmat suits – but then you don’t get the test results, you’re charged for a “free” test, or they use your information for identity theft.

 To avoid COVID testing scams, remember:

  • Do not give your Social Security number or passport number in order to get a COVID test.
  • Find legitimate testing sites. Check with your state  or local  health department or your doctor.
  • Look for FDA-authorized test kits. Check the FDA’s list of authorized antigen tests  and PCR tests  before buying. Now, you can get four free COVID test kits per household at COVIDtests.gov .
  • When shopping online for test kits, pay by credit card. If you’re charged for an order you never received, or for a product that’s not as advertised, you can contact your credit card company and dispute the charge .

COVID-19 vaccine scams

As the COVID-19 vaccine is rolled out throughout the country, it’s important to be on the lookout for scams. Beware of scams offering early access to vaccines for a fee. Don’t share your personal or financial information if someone calls, texts, or emails you promising to get you the vaccine for a fee. Also, keep in mind that Medicare covers the cost of the COVID-19 vaccine. COVID-19 vaccines are also free to others throughout the country, although providers may charge an administration fee.

For more information, click here.

Teaching Suggestions

  • Ask students if they, their friends or family members have been victimized by COVID-19 Vaccine scams.  If so, what were their experiences?
  • Ask students to research legitimate COVID-19 testing sites in their area.

Discussion Questions

  1. When shopping online for test kits, why is it prudent to pay by credit card?
  2. What steps can you take to make sure that you are not being tested at a phony testing site?
Mar 12 2022

Gift Card Scams

Someone might ask you to pay for something by putting money on a gift card, like a Google Play or iTunes card, and then giving them the numbers on the back of the card. If anyone asks you to do this, they’re trying to scam you. No legitimate business or government agency will ever insist you pay them with a gift card. Anyone who demands to be paid with a gift card is a scammer.

What Gift Card Scams Look Like

Gift cards are for gifts, not for payments. But these cards are popular with scammers because gift cards are easy for people to find and buy, and cards have fewer protections for buyers compared to some other payment options. Gift cards are more like cash: once you use the card, the money on it is gone. Scammers like this.

If someone calls you and demands that you pay them with gift cards, you can bet that a scammer is behind that call. Once they have the gift card number and the PIN, they have your money. Scammers may tell you many stories to get you to pay them with gift cards, but this is what usually happens:

  1. The caller says it’s urgent. The scammer says you have to pay right away or something terrible will happen.
  2. The caller usually tells you which gift card to buy. They might say to put money on an eBay, Google Play, Target, or iTunes gift card. They might send you to a specific store — often Walmart, Target, CVS, or Walgreens. Sometimes they tell you to buy cards at several stores, so cashiers won’t get suspicious. And, the caller might stay on the phone with you while you go to the store and load money onto the card. These are all signs of a scam.
  3. The caller asks you for the gift card number and PIN. The card number and PIN on the back of the card let the scammer get the money you loaded onto the card. And the scammer gets it right away.

 For more information, click here.

Teaching Suggestions:

  • How do scammers convince you to pay with gift cards?  Make a list of common gift card scams and schemes, and share it with others.
  • Ask if anyone has paid someone with a gift card.  If so, what was their experience?

Discussion Questions:

1.  What are signs of a gift card scam and how can one spot a gift card scammer?

2.  What steps should you take if you paid a scammer with gift cards?

Jan 1 2022

Tips To Avoid Internet Scams

Each day, more and more scams surface through computers, tablets, cellphones, and other smart devices. To protect your personal information and to avoid being a victim of fraud, the following actions are recommended:

  • Keep operating systems, browsers, programs, apps, and security components up to date.
  • Be aware of the latest scam techniques being used by fraudsters. Search online to learn about current scams.
  • Enable firewalls for your computer and router.
  • Install an antivirus program for your computer, tablet, and smartphone that updates automatically.
  • Create a guest network for visitors to your home to use, to avoid them having to access your home network.
  • Don’t click or respond to emails, phone calls, or text messages from strange addresses and those with unusual subject lines.
  • Update passwords often with a random, complex series of letters, numbers, and symbols; don’t use the same password on different sites. Consider use of a password manager. 
  • Use only reputable sites when shopping online. Use a credit card instead of a debit card for greater financial protection. Don’t click on links or pop-ups, which can be a fake, look-alike website; instead, go directly to the shopping website.
  • Adjust privacy settings on your devices, and for websites you visit for your best protection.  
  • Regularly back up your data in case of a malicious attack, so you don’t lose access to your information and files. If you encounter a ransomware attack, file a report with the FBI.
  • Avoid use of public Wi-Fi to prevent potential fraud and identity theft.
  • Be cautious with your social media posts, especially information about children and teens. Don’t post personal information, vacation plans, work and home schedules, address or other contact information. Don’t “check in” at the locations you visit. 
  • Be cautious about online gaming, which can result in identity theft, bullying, harassment and online predators. Children should use an avatar or nickname.

For additional information on avoiding online scams, click here.

Teaching Suggestions

  • Have students search online for examples of recently-created online scams.
  • Have students create a video, poster, or slide presentation with common email scams and actions to avoid those situations.

Discussion Questions 

  1. What are some reasons that a person might become a victim of an online scam?
  2. Describe actions to learn about new online scams. 
Sep 11 2021

How to protect yourself from social media identity theft

If you use social media, you could be a target for identity theft. You can buy identity theft insurance – or it might be included in your homeowners or renters policy. But taking simple steps to protect your social media accounts can help you avoid most scams.

  1. Don’t post ID cards

It might be tempting to post a photo of a new license or ID card, but it may include your birthday and other identifying data.

2. Question quizzes and surveys

Watch out for quizzes that ask for personal information. Scammers ask questions with answers you might use for security login questions, such as the model of your first car, your first pet’s name, or your hometown.

3. Don’t overshare

Most social media sites and apps ask you about yourself, then display that information on your profile. Be careful what you give them. The more a scammer knows about you, the easier it is to create a fake account with your information. If an app allows it, keep your profile private.

4. Limit app sharing

Many apps let you sign in with a more popular app. But when you do, you usually agree to let the new app use data from the old one. If one app is hacked, scammers can get data from every app linked to it.

5. Close old accounts

Scammers look for old, unused accounts with outdated passwords that are easy to hack. If you don’t use an app, delete your account.

6. Protect family members

Teens are the most likely to overshare. They usually have clean credit histories, which makes their identities valuable. Seniors don’t use social media as often but might not know when they’ve been hacked. It’s a good idea to check the accounts of family members in those groups.

For more information, click here.

Teaching Suggestions:

  • Ask students how they protect their social media accounts.  What precautions are particularly useful to protect their identity on the Internet?
  • Why are teens more likely to overshare their personal information on the social media?

Discussion Questions:

  1. What can regulatory agencies, such as, the Federal Trade Commission and Consumer Financial Protection Bureau, do to protect your social media accounts?
  2. Should Facebook, Instagram, Whats App, etc. provide clear guidance on what to post (or not to post) on social media sites?  How it might be done to protect consumers?
Aug 28 2021

Do you need identity theft insurance?

Victims of identity theft can be left with a bad credit record that can take months to correct. Here’s what you need to know about identity theft insurance and how to protect yourself.

  1. You may be covered

Some homeowners policies include coverage for identity theft. Check your policy or ask your agent to see if yours does. Other companies can add it to your homeowners or renter’s policy or sell you a stand-alone policy. These typically cost $25-$50 a year. Some credit monitoring services also provide identify theft protection or help with recovery.

2. What it includes

Identity theft insurance pays you back for what you spend to restore your identity and repair your credit. These costs can include fees, phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees. Some policies include credit monitoring and alerts and help you start the process to restore your identity. As with any insurance policy, make sure to know exactly what you’re purchasing and be sure to ask about deductibles and policy limits.

3. Is it worth it?

The U.S. Department of Justice reported recently that 7 percent of Americans were the victims of identity theft. Of those, half said it cost them less than $100, and 14 percent said they lost $1,000 or more. Banks and credit card companies already cover most or all losses due to fraud so most victims’ spend more time than money restoring their identity. However, complex cases can mean attorney’s fees and lost wages if you need to take off work, which could be covered by an identity theft policy.

4. How to protect yourself

You can take the following steps to protect yourself from identity theft:Be aware of your setting when you’re entering a credit card number or providing one over the phone. Make sure strangers can’t see or hear you.

Always tear up applications for “pre-approved” credit cards you get in the mail. Criminals may use them and try to activate the cards.

Never respond to unsolicited email that requests identifying data.

 For more information, click here.

Teaching Suggestions:

  • Ask students if they ever thought of purchasing identity theft insurance?  If so, did they purchase it or not?  What have been their experiences?
  • Ask students to make a list of steps to take to protect themselves from identity theft.

Discussion Questions:

  1. Why purchase identity theft insurance if it is already covered by your homeowners insurance policy?
  2. Under what circumstances is identity theft insurance necessary?  Is it worth it?  Explain.
Aug 14 2021

New IRS imposter scam targets college students and staff

If you’re a college student, faculty, or staff member, pay attention to this scam. IRS imposters are sending phishing emails to people with “.edu” email addresses, saying they have information about your “tax refund payment.” What do they really want? Your personal information.

Scammers are sending emails with subject lines like, “Tax Refund Payment” or “Recalculation of your tax refund payment.” The email asks you to click a link and submit a form to claim your “refund.”

What happens if you click the link? The website asks for personal information, including your name, Social Security number (SSN), date of birth, prior year’s annual gross income (AGI), driver’s license number, address, and electronic filing PIN. Scammers can use or sell this information for identity theft.

The emails can look really real and include the IRS logo. But no matter what the email looks like or says, one thing stays true: the IRS will not first contact you by email. They will always start by sending you a letter. And, to confirm that it’s really the IRS, you can call them directly at 800-829-1040.

If you clicked a link in one of these emails and shared personal information, file a report at IdentityTheft.gov to get a customized recovery plan based on what information you shared.

If you spotted this scam, the IRS is asking you to forward the email as an attachment to phishing@irs.gov and at ReportFraud.ftc.gov.

For more information, click here.

Teaching Suggestions:

  • Ask students if they, their relatives or friends have received such scam emails.  If so, how did they respond to the scam?
  • Why have imposter scams increased so rapidly in the last few years?  What, if anything, can consumers do to avoid such scams?

Discussion Questions:

  1. Why is it important not to click on the links, even if they seem to be legitimate?
  2. If you clicked on such a link, what steps should you take to protect yourself and others from being scammed?