Sophisticated scams are fooling cautious consumers, costing Americans billions in losses
WASHINGTON (7News) — Americans may be losing billions more to scammers than federal agencies can track.
Experts analyzing real-time data said losses could be ten to fifteen times higher than what is reported to the Federal Trade Commission, which estimates $2.6 billion a year for imposter scams alone.
Highly sophisticated scams are one reason for the escalating losses, fooling even the most cautious consumers.
“He knew information about me,” said Renee Roberson.” He knew what town I lived in. He gave me other information about myself that made me know that he was legitimate when he really wasn't."
Roberson is one of millions of Americans duped by this new class of criminals.
“It was so crazy. I still cannot get over it," said Roberson.
In a matter of minutes, a series of well-timed maneuvers by criminals had her handing over $3,100 in cash.
It's a devious scam that starts with a small, intentionally suspicious charge being made on a stolen credit or debit number.
“On the day that I got scammed, my bank alerted me, through text message, that a suspicious transaction had been made on my debit card. And that was a real text,” said Roberson.
The criminals knew the charge would immediately trigger a legitimate text message from Roberson's bank.
So, the criminals followed minutes later with a call pretending to be from Bank of America.
Roberson had no idea the number was spoofed.
“It said Bank of America on the call. And I thought, 'Oh, they're calling me about this fraudulent charge that I just got,'” said Roberson. “And that's when I answered the phone.”
Roberson said a pleasant-sounding man walked her through reversing bogus charges he said were on her Zelle account.
“He had me open my mobile banking app, create a new contact, and name the contact myself, so it had my name on it. And then he gave me a number that he said was the claim number for this charge reversal,” said Roberson.
It wasn't until she got a confirmation text from Zelle, via her bank, that she realized the "account number" she input was a phone number, and she'd just sent thousands of dollars to the criminal.
“I thought, ‘What have I just done?’ This money is gone,” said Roberson.
The FTC said last year, that Americans lost $2.6 billion to imposter scams that do things like claim your Amazon package is delayed, alert you to bank fraud prevention, or offer free gifts.
“It definitely is getting more sophisticated and harder for people to recognize as fraud right away,” said Alex Quilici.
Quilici is the CEO of YouMail. A free service that blocks scammer calls, texts and voicemails.
“They’re getting really clever,” said Quilici. “There have been Amazon scams forever but now they’ll call you, and if you’re on an iPhone, you’ll see the transcript of what they’re saying and it will look like they’re legitimate. Like, there’s this weird charge on your Amazon, you just have to press one to fix it. People don’t even think and they ‘Press 1’ and they’re off to the races.”
Quilici said because YouMail works by identifying and blocking potential problems, it also collects data on these scams and works with law enforcement agencies and banks to help shut them down. Based on the company's data analysis, Quilici said Americans are losing far more than what's being reported to the FTC.
‘We did a survey of about 350 people of different age groups and asked them about brand impersonation scams. I think three-quarters said that they’d experienced one. And at least one in eight had fallen for one,” said Quilici. “We did the estimate of losses. It was like 20 or 30 billion and it's ramped up dramatically. Even the FTC's numbers are 10 times what they were only three years ago.”
Quilici said now, criminals are much more targeted.
“It used to be 'spray and pray.' They would call everybody hoping certain people will answer. Now, it feels like they're making far fewer calls and they're almost targeting people who might have a particular credit card," said Quilici.
And if that's not enough, he said you should expect to be hit from all sides.
“The scammers are going multi-channel. So, you will get the same scam from email, text and calls. They all reinforce themselves. Especially the package delivery scams. And in the holidays, it's a perfect time to try to pull off that scam.
Quilici said there are three things you can do to arm yourself:
- Get a call-blocking app on your phone.
- Do not trust incoming calls.
- Do your homework. Independently find the number and call it to verify if the contact is real.
As for Roberson, Zelle eventually refunded her $3,100. She said she was surprised by that, given that most cash app companies make it very clear that they are not responsible for transactions that the account owner authorizes.
“Anyone could be a victim,” said Roberson. I would have never thought I would’ve fallen for something like this.”
To report fraud to the FTC, click here.
7News contacted Zelle about the rise in these scams and attempts to defraud consumers using their services. The company told us they do not share details of their reimbursement requirements so as not to tip off criminals and less than one-tenth of one percent of their transactions are reported as fraud.
The company's spokesperson at Early Warning Services, LLC offered the following:
"We remind every Zelle user of the following three tips:
- Only send money to people you know and trust.
- Beware of payment scams – if a deal sounds too good to be true, it probably is.
- Zelle doesn’t guarantee protection for all authorized payments so treat Zelle like cash.
Helping consumers safely pay is a top priority for Zelle, which is why we’ve launched our payment safety education webpage. We are committed to consumer education – this year, we’ve educated millions of consumers through our extensive website materials through partnerships like the National Council on Aging (NCOA), HerCampus and Utilities United Against Scams, including:
Launched a campaign with Vox Media, called S.A.F.E. Squad, starring actor and producer Christina Ricci: www.Vox.com/safesquadhq.
Partnered with the Better Business Bureau on this campaign: BBB and Zelle warn of the red flags of scams."