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Common Scams

2020 was a crazy year for all of us, but that didn't stop scammers. The Federal Trade Commission received over 2.1 million fraud reports and over $3.3 billion in losses due to fraud just during 2020. This is a HUGE jump from 2019 with losses totaling a mere $1.8 billion. (Source)

Fraud Reported: 2.2 million

Financial Loss: 34% reported

Younger people (44% age 20-39) reported losing money to fraud more often than older people; however, people aged 70+ had a median loss which was much higher. View more data here.

 

Each year fraudsters find different ways to trick financial institutions and their members out of money. These scams vary from imposter scams (impersonating a love interest, relative, or even the IRS) to stealing your identity. Most of these scams have been around for years, but fraudsters are finding new tricks to disguise themselves. 

In order to help you keep your eyes out for these common scams, we're going to go over what exactly they entail and how to avoid becoming a victim.

 

Percentage of Fraud Reports by Contact Method:

31%  Phone Calls

27%  Text Messages

15%  Emails

11%  Website or Applications

6%   Social Media 

View the data here.

 

   Common types of fraud

 

Romance Scams

Most of these scams start off with scammers using other peoples photos and text on dating profiles/sites. Typically they come from a legitimate profile or elsewhere. Fictitious occupations are often used and can include jobs such as: working on an oil rig, in the military, or as a doctor with an international organization. 

These scammers are quick to profess their love and tug at your heart strings with fake stories and their need for money. Often times they request money for things such as plane tickets, travel expenses, and/or customs fees -- all needed to get back into the country. Victims often end up completing a wire transfer to the scammer, never hearing from their love interest again. 

Other variations include: 

  • Money Mules:  Money mules are used to open bank accounts by the scammer so they can send money to the victim for a short period of time. If flagged as suspicious, they'll close the account and find a new victim, hoping for a better outcome. A lot of times these scams go unreported because the victims are too embarrassed to do so. If this kind of scam sounds familiar, don't be embarrassed! It happens. Stop communicating with the scammer and explain your situation to a trusted friend/family member for their advice, or contact your financial institution for help.
  • Mobile Deposit:  In this variation, the scammer logs into the victim's account and requests mobile deposit services. Once the account is set-up for this, the scammer uploads fraudulent checks for deposit into the victim's account. The victim is then instructed to send the money to the scammer by Western Union or MoneyGram, which result in the checks being returned, unpaid. 
  • Western Union/MoneyGram:  In this variation, victims are duped into providing their online banking info. The scammer logs in to their account and initiates ACH debits against other accounts at other institutions, pulling in funds for deposit into the victim's account. The victim is then instructed to send the funds to the scammer via Western Union or MoneyGram. Subsequently, the ACH debits are returned to the financial institution as unauthorized.

Online dating and social media's growing popularity have made it easier than ever to meet new people and find dates. This, unfortunately, also makes scamming people easier as well. Con artists create believable backstories and identities to trick you into falling for someone who doesn't even exist. 

Secret Shopper Scams

Extra money is intriguing to all of us, so members who are looking to make some extra cash are frequently tricked into participating in a secret shopper scam. If you accept this job, you'll typically receive a counterfeit cashier's check ranging from $2,000 to $5,000. You'll then be instructed to cash the check and purchase money orders and gift cards to send to the scammers. For your efforts, you'll keep a percentage of the check you receive. However, this counterfeit check is subsequently returned unpaid and charged back to your account, leaving you to pay the entire check back to your financial institution. 

Advanced Fee Scams

In this particular scam, the victim is informed that they've won a large award (like a bogus lottery) or are entitled to a large inheritance from a deceased relative. However, before the victim gets the money, they must pay fake taxes or fees. The victim ends up wiring funds to the scammer to pay these fees, never hearing from the scammer again.

Elderly Scams

You guessed it! These scams target the elderly. Scammers will call a loved one, often a grandparent, pretending to be a grandchild or other relative in distress. They'll usually say that they've been arrested and need bail money, or that they're at the border and trying to get back into the country and need money wired to them, typically by Western Union. Hearing what they think is their grandchild in distress, the grandparent is anxious to help. In order to combat this scam rather quickly, it's important to call the grandchild in question at a recognized phone number or another relative for help. Variations on this scam include scammers posing as an attorney calling on behalf of the person in trouble, and rather than wiring funds, they request gift cards and provide account numbers. 

Social Security / IRS / Government Scams

Scammers have been impersonating SSA (social security administration) employees over the phone to request personal information or money. These imposters may threaten you and demand immediate action/payment to avoid arrest or legal action. Often times, these scammers "spoof" official government or local police phone numbers. Imposters may also use legitimate names and phone numbers of real SSA employees.

Similarly, you can receive calls from someone saying they're with the IRS. This caller may even know some of your SSN. They'll say you owe back taxes, or even that you're involved in money laundering, drugs, etc. They may threaten to sue, arrest, or deport you. They may even threaten to revoke your SSN or license if you don't send them money right away. To avoid legal action, the scammer will ask for your account info or for you to send money in the form of gift cards, wire transfer, or cash. Your social security number should be guarded closely. It never changes which makes it the perfect prize for an identity thief. 

Tech Support Scams

A person claiming to be a computer technician calls. They might say they're from a well-known company like Microsoft or Apple, or even your internet service provider. They tell you there are viruses or some other form of malware on your computer, so you'll need to give them remote access to your computer or buy new software to fix it. These scammers may want to sell you useless services, steal your credit card number, or install malware on your computer in order to see everything you do on your device. 

Social Engineering Fraud

Social engineering fraud is a range of malicious activities carried out through human interactions. It uses psychological manipulation  to trick users into making security mistakes. Unsolicited emails, texts, a phone calls supposedly from a legitimate company or person requesting personal, financial and/or login credentials are the most common approaches. Read more here.

 

Red Flags & Prevention

Scams are often hard to detect at first; however, these common red flags can help you combat identity theft and other forms of fraud. Don't forget, it's common for fraudsters to use intimidation tactics & urgent requests to get what they want.

  • Don't trust the display name -- these can be spoofed to appear that it's from a legitimate sender. 
  • Check for misspellings, bad grammar, or typos within the content.
  • Be careful clicking on links and opening attachments. Don't click unless you're sure of the sender or you're expecting the attachment. 
  • Don't provide personal or account info when asked. Openly sharing info on social media can provide an identity thief with the necessary info to impersonate you or answer certain challenge questions. 
  • Don't share your secure access codes sent via text or email with anyone. 
  • Be suspicious of anything "urgent" or "immediate" response needed, or "unauthorized login attempt" of your account
  • Know that the IRS or SSA will never contact you by phone, email, text, or social media.
  • Don't believe everything you see. Brand logos, names, and addresses may appear legitimate when they aren't.
  • Be suspicious if the recipient group seems random or unusual (e.g. all last names start with same letter).
  • Watch for emails or texts that appear to be a reply to a message you didn't actually send.
  • Monitor sender's email address for suspicious URLs & domains. 
  • If something seems suspicious, contact the source at a reliable number or other method of contact rather than just hitting reply.
  • Be wary of offers that are too good to be true, require quick action, or instill a sense of fear. 
  • Keep social media accounts private and be cautious who you connect with. Never share anything related to your credit union account, transactional history, or identifying info in unprotected forums. 

 

If you're ever in doubt or have questions, give us a call at 540.663.2181.