In honor of National Consumer Protection Week — don’t worry; we forgot to get you a gift too — we wanted to take a few moments to remind everyone of some of the most common scams so that they can do their best to avoid them.
While scams come in all shapes and sizes, here are four big ones that never seem to go out of style, no matter how often folks are warned about them.
1. Lottery Scam
Lottery scams often take on different forms: In some cases, a fraudster will call or mail information to a consumer claiming to be a government official, informing victims that they’ve won a federally supervised lottery or sweepstakes.
In order to obtain the prize, these schemers will require the victim to provide a payment covering taxes or fees in order to received the supposedly won funds.
To state the obvious, however, there is no lottery. There’s just a large pool of people in Jamaica trained to work in call centers servicing the United States and Canada who figured out that scamming people was much more lucrative than collecting an hourly wage.
Just last month, federal prosecutors indicted a Florida man for his part in a Jamaican lottery scam, collecting payments ranging from a wire transfer of $150 to a cashier’s check sent to him through the mail for $12,500. Prosecutors say that he would keep a portion of the payments and send the rest on to his accomplices in Jamaica.
2. The Grandparent Scam
There’s no love like that of a grandparent. And fraudsters aren’t above taking advantage of that.
In the long-used Grandparent’s scam a victim will receive a call from someone claiming to be a grandchild or family member in trouble, requesting money. These schemers sometimes use information from social networking sites, or hack into your loved one’s email account, to make the farce seem more real.
Thankfully, the scam — and its other variations, which include fake grandkids asking for pricey bail to get out of prison abroad or debt collectors claiming children will be arrested if debts aren’t paid — has received some attention and many retail workers have been successful in preventing the fraud.
For example, in January a Walmart employee stopped an elderly couple from losing $2,500 to the scam. Back in 2014, a group of nurses stopped grandparents from wiring thousands of dollars to scammers.
3. Tech Support Scams
If a window pops up on your computer alerting you that your device has been compromised by a malware attack and offers to fix the problem by calling a toll-free number, there’s a good chance it’s a scam.
In the second variation, a scammer will claim to be able to fix your device if you pay hundreds or thousand of dollars for special software.
These schemes have bilked millions of dollars from consumers concerned about the health of their devices and the information stored within.
Last October, the FTC shut down a Missouri-based operation that used pop-up alerts to scare people into thinking their computers were hacked.
Before that in July 2016, feds halted an international support operation that allegedly relied on a combination of deceptive online ads and misleading, high-pressure sales tactics to frighten consumers into spending hundreds of dollars for dubious computer “repairs” and antivirus software.
But there is some good news on the tech scam front: In May 2016, Microsoft — feeling burned too many times by scams — banned third-party tech support ads in Bing search results.
4. Tax Scams
‘Tis the season for tax scams. There are no shortage of schemers trying to get their hands on tax dollars — whether it be an imposter claiming to be with the Internal Revenue Service demanding payment for overdue tax debts or fraudsters filing returns in others’ names to get their hands on returns.
The first tax scam involves someone calling victims claiming to be with the IRS and informing consumers they have an outstanding tax debt that must be paid or they’ll find themselves in jail. Similar to the grandparent’s scam, these ne’er-do-wells will often tell a target to purchase prepaid gift cards — usually of the iTunes variety — and then call back with the cards’ codes.
One recently uncovered scam involved an Indian call center where workers were able to collect up to $225,000 each day pretending to from the IRS. Federal authorities arrested dozens of people in the U.S. and India for allegedly scamming tens of thousands of consumers out of millions of dollars through the sophisticated call center scheme.
Other tax-time scams involve schemers filing fraudulent tax returns in other consumers’ names sometimes with information they’ve gathered by illegally accessing companies’ W-2 databases or using the “Boss Scam” or “CEO Scam,” in which a fraudster contacts someone inside a business, pretending to be the CEO or other executive asking for personal information about employees.
With consumers bringing home hundreds, if not thousands of dollars in refunds each year, this is big business.
In fact, the “Boss Scam” brought in an estimated $2.3 million in just three years, the FBI reported in 2016.
Last month, two women were charged with filing more than 850 fraudulent tax returns worth $2.78 million from 2012 to 2015.
While the FTC and other organizations will spend the week highlighting different scams affecting consumers, there are permanent resources available. The FTC offers a consumer information website with details how to avoid and detect scam, how to report them, and other actions consumers can take to avoid becoming the victim of fraudsters.