Impostor scams, increasing in popularity, steal millions from victims
For the first time in 2016, impostor scams, where individuals pose as a government or other seemingly trustworthy official to get a victim to send money, surpassed identify theft, making it the second most common complaint the Federal Trade Commission receives.
According to FTC data, debt collection, impostor scams, identity theft, telephone and mobile services, banks and lenders, prizes, sweepstakes and lotteries, shop-at-home and catalog sales, auto-related services, credit bureaus, delinquency information furnishers and credit report users comprise the 10 most common complaints the agency received last year.
“Our latest data book shows that impostor scams are a serious and growing problem, and you can be sure that the FTC will use all the tools at its disposal to address it,” Thomas Pahl, acting director of the FTC’s Bureau of Consumer Protection, said in a statement. “That includes law enforcement actions against scammers and consumer education to help consumers avoid losing money.”
The consumer protection agency said of the 1.3 million fraud reports it received in 2016, victims reported paying $744 million to scammers.
Top 10 fraud and other complaints in Maine
- Impostor scams
- Debt collection
- Telephone and mobile services
- Prizes, sweepstakes and lotteries
- Banks and lenders
- Shop-at-home and catalog sales
- Auto-related complaints
- Television and electronic media
- Credit cards
- Internet services
Last year, a number of scams were reported locally that targeted residents in an effort to coerce payments. Most recently, a woman was bilked out of several thousand dollars when she was contacted on two separate occasions by someone pretending to be an FBI agent. The woman was told she owed money and needed to pay it back or she would be arrested.
In other cases, residents in Searsport were contacted by a man claiming to be with Publishers Clearing House who said they won a new vehicle or millions of dollars. In order to claim their prize, residents were told to send money orders.
Some residents also reported receiving calls from someone posing as a government official who said they won a grant from the U.S. government. However, in order to collect the money, residents were told to wire money through Western Union.
The Maine Attorney General's Office cautioned Mainers to be careful about such grants being offered through instant messenger programs and social media sites. Scammers posing as government officials inform a potential victim they are eligible for a free grant and need only to pay a small processing fee before the money is released. Even if the payment is made, no grant money is ever released.
A slightly more sophisticated impostor scam surfaced in Belfast where residents reported receiving calls from the IRS and then a follow-up phone call from the city's police department. The scam worked well enough that one individual paid $1,500 to the callers.
At the time, police said the callers were using cloaking applications to fool caller ID and spoof the police department's number.
While IRS scams are common — particularly this time of year when people commonly are filing taxes — residents and businesses alike have received phone calls from people pretending to be with Central Maine Power Co. In each of those cases, the purported CMP employee tells the resident or business they must immediately make a payment using a prepaid card or risk having their power shut off.
For people who reported losing money, the FTC said the majority — 58 percent — lost the money via a wire transfer. Also, most of the victims reported they were first contacted by phone.
On March 9, Sen. Susan Collins, R-Maine, and Sen. Kirsten Gillibrand, D-N.Y., announced they are introducing legislation to protect seniors from financial fraud. The bipartisan bill would, among other things, centralize services for consumer education and data on scams and fraud targeting seniors, create a grant program to prevent mail, telemarketing and internet fraud, direct the National Institutes of Health to conduct scientific research on older adults' vulnerability to scams and designate a national senior fraud awareness week.
There are steps consumers can take to protect themselves. The FTC recommends several options for defeating impostor scams such as never wiring money, not paying for a prize, not providing personal or financial information to a caller, not trusting a name or number and putting your number on the national do not call registry.
Complaints can be filed online at ftc.gov/complaint.