Tag Archives: fraud

Sep 14 2024

Government Impersonation Scammers

New Federal Trade Commission data reveals that government impersonation scammers are targeting consumers for payments in cash, with the amount of cash reported lost to these scams nearly doubling from 2022 to 2023.

The FTC data shows that consumers reported losing $76 million when paying cash to government impersonation scammers in 2023, up from $40 million in 2022, an increase of 90 percent. In just the first quarter of 2024, consumers have reported losing $20 million to government impersonation scams when paying with cash.

The median loss for consumers who reported paying cash to government impersonation scammers in the first three months of 2024 was $14,740 – far higher than for any other method of payment. Consumers have reported mailing cash as well as handing cash to drivers sent to collect the money.

Scammers frequently impersonate government agencies, from local police to federal agencies, and while details of the pitch may vary, a common element is that the consumer they are targeting needs to send or transfer money to address an urgent issue or serious problem. This news is usually accompanied with a combination of dire warnings or threats designed to put their target in a state of mind where the urgency of the moment bypasses any doubts they have.

The key fact is this: government agencies will never call, email, text, or message you on social media to ask for money or personal information, and they will never demand a payment. Only a scammer will do that.

The FTC recently put into effect a new rule that gives the agency stronger tools to combat and deter scammers who impersonate government agencies and businesses, enabling the FTC to file federal court cases seeking to get money back to injured consumers and civil penalties against rule violators.

Consumers who are targeted by a government impersonation scam should report it to the FTC at ReportFraud.ftc.gov. More data about government impersonation scams is available on the FTC’s data dashboards.

For more information, click here.

Teaching Suggestions

·         Ask students if someone they know has been scammed by government impersonation scammers. If so, what was their experience?

·         Ask students to prepare a list of actions they might take if a government impersonation scammer approaches them.

Discussion Questions

1.      What can governmental agencies do to stop these impersonators?

2.      Once apprehended, should the perpetrators be fined or sent to prison? Any other penalties?

3.      What should you do if you are targeted by a government impersonation scammer?

Jun 24 2023

Stop the Robocalls

Tired of getting endless robocalls? Robocalls aren’t just a pain to get, they’re often pushing scams for bogus services such as fake extended auto warranties and debt relief. But robocallers can’t do it alone. That’s why the Federal Trade Commission is taking action against Stratics Networks, a company that supplied the technology for telemarketers to make tens of millions of robocalls. But that’s not all — the FTC is also suing the debt relief companies that hired Stratics to make robocalls for their illegal debt relief services.

According to the FTC,  Stratics delivered illegal robocalls for telemarketers promoting offers for credit card and student debt relief, home buying, health insurance, and cable TV discounts. Many robocalls were “ringless voicemails” — where your phone doesn’t ring but you get a voicemail with a robocall message.

Here’s what to know: a robocall trying to sell you something is illegal unless the company has your written permission to call you. Scammers use robocalls to get your money or your personal information so they can steal your identity. They might try to convince you the call is from the government, tech support, or your auto warranty company. Don’t buy it. Even if the name or number on the caller ID looks real, it could’ve been faked.

If you get an illegal robocall:

For more information, click here.

Teaching Suggestions

  • Make a list of common scams that target personal information and discuss how to detect and stop illegal robocalls.
  • Ask students what they do when they receive unwanted calls, emails, and text messages that are annoying, might be illegal, and are probably scams?

Discussion Questions

  1. Why should one think twice before buying an extended auto warranty from a robocaller? Or, a debt relief service?
  2. What actions can you take to minimize the number of robocalls you receive from scammers? How can you fight back and lower your risk of being a victim?
May 13 2023

Consumers Lost Nearly $8.8 Billion to Scams in 2022

Newly released Federal Trade Commission data show that consumers reported losing nearly $8.8 billion to fraud in 2022, an increase of more than 30 percent over the previous year.

Consumers reported losing more money to investment scams—more than $3.8 billion—than any other category in 2022. That amount more than doubled the amount reported lost in 2021. The second highest reported loss amount came from imposter scams, with losses of $2.6 billion reported, up from $2.4 billion in 2021.

The FTC received fraud reports from 2.4 million consumers last year, with the most commonly reported being imposter scams, followed by online shopping scams. Prizes, sweepstakes, and lotteries; investment related reports; and business and job opportunities rounded out the top five fraud categories.

The FTC’s Consumer Sentinel Network is a database that receives reports directly from consumers, as well as from federal, state, and local law enforcement agencies, the Better Business Bureau, industry members, and non-profit organizations. Sentinel received more than 5.1 million reports in 2022.

The FTC uses the reports it receives through the Sentinel network as the starting point for many of its law enforcement investigations, and the agency also shares these reports with approximately 2,800 federal, state, local, and international law enforcement professionals.

For more information, click here.

Teaching Suggestions

  • Ask students what actions they have taken to keep their security software, internet browser, and operating system up to date.
  • Suggest that students use multi-factors authentication for extra security when they log into their accounts.

Discussion Questions

  1. What is the purpose of Consumer Sentinel Network  and why does it provide free data to any federal, state or local law enforcement agencies?
  2. Do you know how to lock down your smart phones, network, and information? 
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?

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.
Mar 30 2019

Avoid Tax Refund Advances

Each year, more than 1.5 million taxpayers obtain refund anticipation loans (RALs).  This year, the number may be higher as a result of the government shutdown.  While, RALs provide faster access to your money, they come with high fees and should only be used as a last resort.  These “cash advances” are a potential for scams; before using these loans, take these actions:

  • Assess the cost. While some national tax chains promote this service as a “free” cash advance, fees may apply for applying for the advance, checking your credit, and transferring the money to you. Costs for your refund advance check range from $29 to $65.  If your refund is on a prepaid debit card, there will likely be additional fees.
  • Beware of loan terms based on timing. Additional charges may occur if your refund is delayed.
  • Compare other options. Seek less expensive, small-dollar, short-term loans from a community bank or credit union, or a zero-percent credit card. A $35 charge to defer a $350 tax preparation fee for two weeks has an APR of 174 percent.
  • To avoid late fees for bills, contact your creditors. Utility companies and medical providers may offer no-cost extensions or no-cost payment plans.

Always be sure you are doing business with a reputable tax preparer. Check credentials and references. Avoid tax preparers who charge fees based your refund amount, or who deposit your refund in their bank account. Another fraudulent activity is filing false information to increase the amount of the refund.

For additional information on tax refund advances, click here.

Teaching Suggestions

  • Have students search online for costs for refund anticipation loans.
  • Have students prepare a video presentation on avoiding refund anticipation loans.

Discussion Questions 

  1. What advice would you give a person planning to obtain a refund anticipation loan?
  2. How might community organizations and government agencies assist people who are considering a refund anticipation loan?
Apr 21 2018

Romance Scams

What are some signs that a romance scam could be taking place?

  • a new love living far away requests money or use of your credit card number
  • being asked to sign a document giving a new romantic interest control of your finances
  • a new sweetheart wants you to open a joint bank account with them

While romance scammers usually focus on single, older people, anyone seeking a new relationship is a possible target. These scams can happen in person, but more often through social media, dating websites, smartphone apps. These scams happen when a new love pretends to be interested in you as a way to get your money. In fact, they may not even be who they say they are.

Beware of Cupid’s arrow striking your wallet instead of your heart!  To protect you, friends, and family from romance and other scams, consider these actions:

  • Avoid giving a new friend access to credit cards, bank accounts, or other financial assets.
  • Report crimes or financial exploitation to local law enforcement agencies or to Adult Protective Services (APS); information available at gov.
  • Contact your state attorney general and the Federal Trade Commission to report cases of financial abuse.

For additional information on romance scams, click here.

Teaching Suggestions

  • Have students create and present possible scam situations to create awareness among various potential victims.
  • Have students create a visual presentation (using computer software or a poster) to communicate actions to avoid scams.

Discussion Questions 

  1. What are common warning signs that may indicate that a possible scam is taking place?
  2. Describe actions that might be taken to avoid various scams and frauds.
Jan 13 2018

Protect Your Social Media Accounts

The Internet has made our lives easier in so many ways. However, you need to know how you can protect your privacy and avoid fraud. Remember, not only can people be defrauded when using the Internet for investing; the fraudsters use information online to send bogus materials, solicit or phish.

Here’s what you can do to protect yourself when using social media:

Privacy Settings: Always check the default privacy settings when opening an account on a social media website.

Biographical Information: Consider customizing your privacy settings to minimize the amount of biographical information others can view on the website.

Account Information: Never give account information, Social Security numbers, bank information or other sensitive financial information on a social media website.

Friends/Contacts:  Decide whether it is appropriate to accept a “friend” or other membership request from a financial service provider, such as a financial adviser or broker-dealer.

Site Features: Familiarize yourself with the functionality of the social media website before broadcasting messages on the site. Who will be able to see your messages — only specified recipients, or all users?

For More Information, click here.

Teaching Suggestions

  • Ask students to make a list of their social media accounts. How do they protect their accounts from fraudsters?
  • Why do many social media websites require biographical information to open an account?

Discussion Questions

  1. Why is it important to limit the information made available to other social media users?
  2. Is there an obligation to accept a “friend” request of a service provider or anyone you don’t know or do not know well?
  3. Why be extra careful before clicking on a link sent to you even if by a friend?
Sep 16 2017

Hurricane Financial Toolkit

Natural disasters create a need for unique actions.  After physical safety is assured, some of the activities related to finances include:

  • contacting your insurance company – request a copy of your policy, take photos and videos to document your claim.
  • registering for assistance at DisasterAssistance.gov or call 1-800-621-3362.
  • talking with your mortgage lender and credit card companies since you may not be able to make upcoming payments on time.
  • contacting utility companies to suspend service if you will not be living in your home due to damage.

Beware of various scams that surface after natural disasters.  These frauds can include phony repairs, deceptive contractors, requiring up-front fees, fake charities, and misrepresenting oneself as an insurance company agent or government representative to obtain personal information.

Assistance for the personal and financial chaos created by a hurricane or other natural disaster may be obtained from these organizations:

For additional information on financial actions for disasters, click here.

Teaching Suggestions

  • Have students role play situations that might require actions such as those described in this article.
  • Have students create a video with suggestions to take when encountering a natural disaster.

Discussion Questions 

  1. How might the advice offered in this article be communicated to people who are victims of a natural disaster?
  2. Describe common mistakes people might make when encountering a natural disaster.
Apr 29 2017

Fraud Victims Vulnerable to Severe Stress, Anxiety and Depression

The FINRA Investor Education Foundation issued a new research report, Non-Traditional Costs of Financial Fraud, which found that nearly two thirds of self-reported financial fraud victims experienced at least one non-financial cost of fraud to a serious degree—including severe stress, anxiety, difficulty sleeping and depression. While the Stanford Financial Fraud Research Center estimates that $50 billion is lost to financial fraud every year, the FINRA Foundation’s innovative research examines the broader psychological and emotional impact of financial fraud.

“Fraud’s effects linger and cause distress well after the scam is over. For the first time, we have data on the deep toll that fraud exerts on its victims, and the results are sobering. This new research underscores the importance of the FINRA Foundation’s work with an array of national, state and local partners to help Americans avoid fraud, and assist consumers who have been defrauded,” said FINRA Foundation President Gerri Walsh.

The research report found that:

  • nearly two thirds (65 percent) reported experiencing at least one type of non-financial cost to a serious degree; and
  • most commonly cited non-financial costs of fraud are severe stress (50 percent), anxiety (44 percent), difficulty sleeping (38 percent) and depression (35 percent).
  •  Beyond the psychological and emotional costs, nearly half of fraud victims reported incurring indirect financial costs associated with the fraud, such as late fees, legal fees and bounced checks. Twenty-nine percent of respondents reported incurring more than $1,000 in indirect costs, and 9 percent declared bankruptcy as a result of the fraud.

Additionally, nearly half of victims blame themselves for the fraud—an indication of the far-reaching effects of financial fraud on the lives of its victims.

For more information, click here.

Teaching Suggestions

  • Ask students to list a few suggestions to protect themselves from financial fraud.
  • Explain how FINRA can assist consumers who have been the victims of financial fraud.

Discussion Questions

  1. What are a few indirect financial costs associated with funds?
  2. Why nearly half of victims blame themselves for being victims of financial fraud?
  3. How and where should you report financial fraud?