Last Updated on October 10, 2023 by BVN
Phyllis Kimber Wilcox
Ethnic Media Services (EMS) in association with the Federal Trade Commission (FTC) hosted a series of media briefings to inform the public on how to protect themselves from online and telephone scams.
The latest in the series, facilitated by Sandy Close, Executive Director of EMS, and Rosario Mendez, an attorney with the FTC, explored recent trends in telecommunications scams.
The FTC is the governmental agency tasked with, according to Close, “protecting American consumers from deceptive and unfair business practices.”
The speakers included Lois Greisman, Associate Director of the FTC’s Division of Marketing Practices and Sophia Siddiqui, FTC attorney from the Division of Marketing Practices.
Telephone Scams
According to Greisman, behind scams perpetrated via social media, “The next biggest area [for scams] is the telephone. Phones continue to ring off the hook . . . unwanted calls . . . fraudulent calls, we have a lot of law enforcement working on that,” she explained while further acknowledging, “There’s always more to do,” .
“Interestingly, what you see is that the median loss per person on the telephone is incredibly high. It shows how effective the telephone is at getting a person to part with their money to a scammer,” she concluded.
The panel experts also shared how scammers use telecommunications technology to cast as wide a net as possible in order to facilitate call volume. In this net scammers catch as many unsuspecting uniformed people as they can before disappearing with their money.
“I thought it would be useful to just to show visually where the greatest dollars are lost to scammers. It is interesting to see that scammers like certain types of payment because they can take the money easily and run and leave very little trail. And for the consumers, it is [all] but virtually impossible to get their money back,” Greisman stressed.
Payment Methods Telltale Sign
Panelists went on to describe how the different types of payments fit into the types of scams being perpetrated, noting how scammers ask you to pay, may give you insight into what kind of scam is being attempted. According to Close, “payment methods are telltale signs of a scam.” This includes payments from familiar apps such as Cash app, Venmo, Zell, as well as gift cards and crypto currency.
Telecommunications companies, law enforcement and the federal government are very aware of how scammers use technology, however with the cost of calls being incredibly cheap, the telephone scam pays, making it very popular and difficult to stop.
According to Greisman, “There is a lot of call blocking that goes on, by the Verizons, the Sprints, at the network level, and also there are devices you can put on your phone that will block certain calls or that will screen them. I know from our work millions of [these calls] are shut down.”
However, the cost to scammers of making these calls can be a fraction of a fraction of a penny Greisman explained. Noting that with technology, scammers just create another series of numbers and start calling again from the new numbers. Greisman’s advice, “‘Never trust the number in your Caller ID. If it says it’s from the U.S. government, it might not be.”
Imposter Scams
The greatest losses for consumers is through wire transfers which occur very often in what are referred to as “imposter” and “business opportunity” scams.
Imposter scams are those in which you are contacted by an imposter asking for money for false purposes. According to Greisman, “It’s the telephone call from the IRS [that] you owe back taxes; the telephone call from the sheriff’s department there’s a warrant out for your arrest; [a telephone call stating] you’ve gotta go buy a gift card for one hundred, two hundred, three hundred dollars.”
Greisman also gave this example:, “I got a call. I am told my grandson has been in a car accident in Canada, can’t find an insurance card, needs surgery right away. I’m sure this is an example each of you is familiar with. The only way he can get the surgery is if I go to my bank and if I ask them to send $7,895 to this account in Canada.”
This is an example of the types of scams that can involve a bank transfer, wire transfer, Money Gram, Western Union, or gift cards.
According to Greisman, Apple Pay and Google Pay tend to lead in this area along with payment apps like Zelle, Venmo, CashApp and others.
Greisman’s advice, “If you have a credit card, pay for anything you buy, especially whatever you buy online, with it. Why? [Because] you’ve got the best protections under Federal law. None of these other payment types offer those kinds of really good protections.”
Business Opportunity Scams
Business opportunity scams are where you are offered a chance to make a lot of money. The primary place for these types of scams is social media.
Greisman explained, “One of the things we hear a whole lot about— and you all see it in your work both as reporters and as consumers—you see it across all your networks, your circles, the primary point of contact that scammers use, is social media. That’s where the scams are hitting people. That’s where the scammers are reaching people.”
The investment scams usually focus on teaching people about how to get rich trading online. “What we are seeing because of the rage about crypto currency— the novelty of it— [is] pay me by crypto currency. A lot of people don’t know how to pay using crypto currency. [Scammers] are more than happy to walk you through step by step, inch by inch, to send them several thousand dollars worth in crypto currency.”
Business opportunity scams tend to result in big ticket payments. With pitches like, “I will set you up in business. I will enable you to become an online entrepreneur selling with your own website on Amazon or eBay. You will make significant money, but you [must] pay through a payment app ten thousand dollars, twenty thousand dollars,” according to Greeisman.
Greisman highlighted how you are not going to be able to walk in and buy gift cards for the large amounts of money these types of scams involve and you can, but it will be even harder, to walk into Western Union or Walmart or wherever you can send a wire transfer from and send many, many thousands of dollars. “That’s why with the bigger ticket items [like] investment scams and the business opportunity scams, we see different types of payments used. These are red flags we don’t see much brighter,” she advised.
Major Takeaways
According to the FTC, there are things you can do to help protect yourself from telecom scams. Beginning with, not trusting Caller ID. If you don’t recognize the number, don’t answer the phone. If you make purchases, especially online, use a credit card because they are protected by Federal law. If you do answer the phone and a stranger asks you to pay for a service, fee or fine by gift card, it is probably a scam.
According to Siddiqui, “The big takeaway is that nobody legitimate will ask for gift cards, crypto currency or a wire transfer. And if someone you don’t know asks you to pay with one of these methods, it’s likely a scam. Sending money one of these ways is just like sending cash. It’s very hard to get your money back. One of the methods scammers often use is gift cards, You can find out about federal protections for credit cards at ftc.gov/gift cards.”
To report an incident of fraud visit reportfraud.ftc.gov.