2023 fraud trends show huge losses to crypto, increased incidents of charity scams

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Fraud.org’s annual Top Ten Scams report for 2023 is out. Investment scams, including crypto fraud, continued last year’s trajectory and reached $20,000 in median losses. Two years earlier, that number was $1,750. Additionally, fraudsters seem to have capitalized on the record-breaking natural disasters, with reports of charity scams up almost 200%. The full Top Ten Scams report for 2023 can be found here. 

Top Ten Scams of 2023 

  1. Prizes/Sweepstakes/Free Gifts   
  2. Internet General Merchandise   
  3. Phishing/Spoofing   
  4. Investments (including cryptocurrency)  
  5. Fake Check Scams  
  6. Advance Fee Loans, Credit Arrangers   
  7. Friendship & Sweetheart Swindles   
  8. Charitable Solicitations  
  9. Family/Friend Imposter   
  10. Home Repair 

Sweepstake scams were the #1 reported fraud category in 2023, making up 29% of complaints. These crimes involve making victims believe that they won a prize or other reward, but in order to claim their winnings, they must first send the fraudster money. Victims usually never receive their prize, just more demands for payment. With a median loss of $1,000, this category’s share of reports received decreased year-over-year, likely due to the growing number of crypto-related complaints. 

Cryptocurrency scams are placed within Fraud.org’s investment scam category. With a 152% increase from last year, investment fraud has now reached a record high as the fourth most commonly reported scam. Steadily rising each year for the past few years, this category includes incidents where victims are deceived into believing they are purchasing legitimate cryptocurrencies for themselves. Instead, they either purchase nonexistent, bogus currency or they deposit their cash directly into a fraudster’s crypto wallet, believing it’s their own. 

A nearly 200% increase in charity scams caught our attention—the only category to exceed investment fraud in its year-over-year growth. As climate-related disasters have increased in frequency and severity, scammers will continue to find opportunities to exploit well-meaning victims. Typically, fraudsters solicit donations, claiming to deliver aid to impacted individuals. These frauds can take advantage of recent disasters or focus on aiding specific populations, such as veterans or persons experiencing financial hardship. They may also impersonate legitimate charities.  

Tips to guard against fraud 

  • Be cautious of strangers asking for money. Particularly those offering a prize, grant, award, or job opportunity. More information on sweepstakes and prize scams can be found here. 
  • Avoid cryptocurrency. As a legitimate investment vehicle, crypto is extremely risky. Its environmental impacts are much worse compared to other investment options. And of course, it’s rife with fraudsters looking to take advantage of the public’s unfamiliarity. More information on crypto fraud can be found here. 
  • Verify that the charity is legitimate before donating. The IRS’ tax exempt organization search and charitynavigator.org are two resources to check if the solicitor is registered as an official non-profit and view other metrics of trustworthiness. More information on charity scams can be found here. 

10 Resolutions for a Fraud-Free 2024

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Happy New Year! From Fraud.org, here are 10 New Year’s resolutions to reduce your risk of fraud in 2024. 

  1. Use multi-factor authentication. Using multi-factor/two-factor authentication is an easy way to protect your accounts even if your password shows up in a leak. By requiring permission for the login from an additional method of contact, usually text message or email, multi-factor authentication reduces an intruder’s chances of success. 
  2. Lock your SIM card with a PIN. Fraudsters can gain control of your phone number with an attack called SIM swapping. Once that happens, they have effectively voided any multi-factor authentication that relied on your phone number. To prevent a SIM swap, most major carriers allow customers to require the input of a PIN before their SIM can be used on another device. 
  3. Just because it’s online doesn’t mean it’s true. Scammers can deceive anyone, including your friends. Treat all investment opportunities, job offers, and other lucrative openings with caution, even if someone you know shared it on social media. 
  4. Verify identities. Criminals can take over online accounts or create copycats of real people you know. AI can mimic the voice of a loved one and create more convincing phishing attempts. With endless opportunities for deception, take a few minutes to verify that the person is who they say they are. One of the best ways to do this is to contact them through another medium besides the one they used to approach you. 
  5. Don’t pay with gift cards or cryptocurrency. Legitimate businesses and government offices will never ask you to pay an outstanding balance with a gift card or crypto. Anyone demanding these kinds of payments is a fraud.  
  6. Ask for details in writing. Genuine offers of employment, transactions, and donations should be able to provide comprehensive details in writing. These should include what is expected from you (namely monetary costs, the length of the commitment, or time requirements) and what they will provide, including warranty, refund, and return windows. If someone is unable to specify more information, treat it as a red flag.  
  7. Take your time. You should never feel coerced or pressured into making big purchases or commitments. Legitimate counterparties should be able to provide details in writing and give you space to make a decision. 
  8. Keep sensitive information encrypted. When inputting and sending personal information online, double check that the website is secure (secure connections begin with HTTPS and most browsers will display a lock symbol near the URL). Don’t keep confidential digital files, including where you store passwords, as plain text. Encrypted cloud storage and hard drives require a password to view the stored information and many will offer multi-factor authentication, making it much harder for hackers to break in. 
  9. Report instances of fraud. Phishing attempts and spam ar fraud, too. Reporting these incidents to law enforcement and third-parties that may have been involved in the transaction (like an online marketplace) increases your odds of recovering your losses. Law enforcement, policymakers, and the platforms these activities occur on are also better able to act on these issues with a fuller set of data to inform them. 
  10. Treat victims with compassion. Victims are often blamed, feel unsupported, and are given few options for recovery. This benefits only the scammers and makes us all less safe. Nobody is immune to fraud and it should be treated as seriously as any other crime. 

The Year in Fraud: 2023

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As 2023 comes to a close, we would like to highlight some notable developments in fraud that occurred this year. From alarming developments in scammers’ abilities to facilitate crimes, to new safeguards against fraud on Zelle, here are a few significant updates on the year that was in fraud. 

AI-facilitated phishing 

With the public availability of generative artificial intelligence, such as text-writing chatbots and voice cloning software, we have seen red flags regarding fraudsters’ misuse of these tools. Generative AI can allow scammers to create targeted and believable phishing messages in minutes. Normally, creating tailored attacks would take humans hours due to the time it takes to learn enough about the target. This is worrying given the higher rate of success attributed to individualized phishing attempts like these compared to generic ones.  

There was a 1,265% increase in phishing emails this year. This higher tempo of attacks combined with greater personalization requires more strict evaluation of incoming messages. Carefully check that the sender is a trusted contact—just one letter difference is a warning sign that they are an imposter. If you receive a requst for personal information, contact who you believe the sender is via another method you have previously used to communicate (such as text message or a phone call) and check that it is really them making the request. Lastly, just because an incoming message contains your full name, workplace, or other details does not mean it is genuine. 

Crypto ATMs as vectors of fraud 

In 2023, there were 69,000 cryptocurrency ATMs in the United States—more than triple the number that were available in 2020. These kiosks seem straightforward, allowing consumers to deposit cash in exchange for cryptocurrency. Unfortunately, scammers have been taking advantage of the public’s general unfamiliarity with the machines (and crypto itself), exploiting victims and coaching them to unknowingly deposit cash into the criminals’ wallets. To make matters worse, crypto ATM operators often place their kiosks in marginalized and underserved communities, with little-to-no visible warnings regarding the risks involved with using one of the machines. 

Fraud.org does not encourage consumers to use cryptocurrency as an investment tool given its volatility and lack of consumer protections. This advice still holds true with crypto ATMs. Do not deposit cash in these machines if someone over the phone is asking you to do so. Also, you should not deposit money into a crypto kiosk if you do not already have the relevant cryptocurrency wallet. If you do so, you will likely lose your cash. The safest place to store your cash is with a federally insured bank. 

Banks institute Zelle safeguards in response to regulatory pressure

Consumers have been losing hundreds of millions of dollars each year to fraud committed through Zelle. In spite of these losses, banks resisted implementing basic safeguards, leaving most individuals with no way to get their money back if stolen by a criminal. Now, following media coverage and pressure from policymakers, the 2,100 banks enrolled in Zelle’s network have begun reimbursing victims of imposter scams who used Zelle to send money to fraudsters. These crimes typically involve a scammer posing as a government official, bank employee, or a similar figure who then demands payment from victims.  

Even though these banks have taken a step in the right direction, the full boundaries of their reimbursement protections are not public. Also, payments sent in error (either an incorrect amount or wrong recipient) still lack refund protections. It is safest to continue taking steps to minimize scammers’ ability to defraud you. Avoid paying for commercial goods and services over Zelle. Paying with a credit card or an online marketplace’s payment system often includes the greatest refund protections. Remember that government officials and banks will never ask for payment through Zelle.  

If you need to send money to someone over a payment platform, have the recipient request the money from you in the app. Fulfilling a contact’s request minimizes the chances of accidentally sending the wrong amount of money or sending cash to the wrong person.  

Tips for reducing your risk of fraud this holiday shopping season

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With November upon us, the holiday shopping season is shifting into high gear. While Black Friday and Cyber Monday deals can save shoppers cash on gifts, they are also an opportunity for scammers who are looking to capitalize in consumers’ interest in shopping online. To help reduce your risk of being their next victim, keep the following safe shopping tips in mind through the end of the year. 

Different payment methods have better fraud protections. Due to differences in consumer protection law and the ways that payment methods have been designed, how you choose to pay can determine if you are entitled to a refund in the case of fraud. Credit cards and debit cards have the most protection, with card issuers allowing you to dispute phony charges. Checks, peer-to-peer payment apps, wire transfers, and cash do not have such protections, even if a criminal convinces you send them money via one of those methods. 

In this vein, stick with the payment system set up for third-party marketplaces like Amazon, eBay, and Etsy. These platforms often ensure that the seller will deliver your purchase and give you the ability to dispute undelivered or fraudulent goods. There is no reason a seller should ask you to use a different payment method than the ones available on the platform. Avoid those asking for you to pay them in gift cards, with cryptocurrency, or through a peer-to-peer app (like Venmo, Zelle, Cash App, or PayPal). 

Be careful of delivery impersonations. One of fraudsters’ popular phishing methods is impersonating delivery companies like USPS, UPS, FedEx, and Amazon. Usually sent in a text message, the scammer will claim that a delivery can’t be completed until you provide more information. While they’re typically looking to steal personal information, these messages may also seek some type of payment peddled as a delivery fee or contain infectious malware. 

Given the higher chance that you may actually have a package on the way during the holiday season, it can be difficult to tell which notifications are genuine or not. If you are waiting for a real delivery, go to the shipment confirmation page (either through your email or through the seller’s website) and check if they really do need any further information from you. Don’t click on links from unknown senders or respond to suspicious messages. 

Just because your friend shared it on social media doesn’t mean it’s true. Last month, the Federal Trade Commission highlighted social platforms’ role in spreading scams. It’s a real problem for young individuals especially, with nearly half of those aged 18 and 19 reporting that social media was the first point of contact with a fraudster who stole their money. Regardless of age, scammers are trying to reach you on social media through posts of their own, posts that your friends shared, accounts impersonating people you may know, and purchased advertisements. These often include fake products and services that otherwise might be a good gift. 

If something seems off, don’t dismiss the alarm bells only because you know the person who shared the content. Links may impersonate genuine websites and businesses, often with only one letter misspelled. Scammers frequently take over the accounts of people you may know or create a new account to mimic a friend. Reach out to the person through text message (or another contact method besides the suspicious account) and check if it is really them making posts or sending messages. 

Watch out for cheap fakes. Scammers know it can be tough to find the hottest items at an affordable price. They often advertise popular or sold-out goods, like gaming consoles and smartphones, at unbeatable prices. After they take your money, they’ll ghost you and leave you empty-handed or send you a poor knock-off. If an item is known to be out of stock, you should question how this seller came by their goods. Similarly, if someone is selling items well below the going rate, that warrants extra care as a potential buyer.  

A reverse image search of the seller’s pictures could reveal if they swiped the advertised images from somewhere else (a good sign that they’re not genuine). Also check the seller’s account to see if they have a trustworthy history of doing business. If you decide to make a purchase, stick with the marketplace’s payment system and use a credit card so you can dispute the charges if it turns out to be fraudulent.

 

If you or someone you know has targeted by or been a victim of a fraudulent student loan repayment scam or any other type of fraud, we encourage you to report it via Fraud.org’s complaint system. Complaints filed with Fraud.org are shared with a network of more than 200 law enforcement and consumer protection agency partners who can investigate these crimes. 

Stay smart as student loan payments restart

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This month, millions of borrowers will have to make payments on their student loans for the first time in over three years. For many, this will be the first time that they will put money towards their student debt. For all borrowers, this marks a significant transition that can affect their budgets. Unfortunately, we anticipate that criminals will seek to take advantage of consumers unfamiliarity with the student debt system to try and defraud them. 

Given the popular focus on debt cancellation over the past few years, it is unsurprising that fraudsters have tried to deceive borrowers with illegitimate promises of debt relief. These schemes usually involve outreach to consumers with requests for sensitive information, such as a Social Security number, bank account information, or Federal Student Aid (FSA) login credentials. In addition, scammers may attempt to charge a bogus fee for their “debt cancellation” services without ever helping the victim. 

Another common fraud related to student debt is phony consolidation and refinancing offerings. Often under the premise of lower interest rates or lower monthly payments, bad actors will perpetrate these schemes in a similar fashion as cancellation fraud with the hope of gaining sensitive consumer information or extracting payment. For most victims who believe their loans are consolidated under one of these scams, they never officially change their loan servicer. This means that despite potentially months of repayment, their charges were going to the fraudsters while their actual debt balances grew with interest and suffered penalties. 

The criminals behind these scams can impersonate legitimate entities within the student debt space, such as the U.S. Department of Education, a borrower’s university, or legitimate loan servicers. Others, however, peddle their scams under novel (and fake) branding. Many scammers will also charge for filing services that would normally be free if the consumer filed directly themselves. For example, one Pennsylvanian reported to Fraud.org a bogus “document preparation services” company that charged hundreds of dollars under the guise of helping borrowers get ready for repayment. 

With student loan payments resuming, keep the following in mind: 

  • The federal government offers loan consolidation services and limited debt relief programs (like Public Service Loan Forgiveness, Teacher Loan Forgiveness, and Income-Driven Repayment) free of charge. Anyone seeking a fee to provide these services is likely a criminal. 
  • The federal government and its contracted partners will never ask you for your login credentials over text, phone, or email. 
  • Ask your loan servicer about the details of your repayment plan and make sure you’re enrolled in the best plan for you. If you’re unsure which plan is right for you, check on the Federal Student Aid website. 
  • Make sure your monthly payments line up with the estimated monthly payments under your desired repayment plan. If they don’t, that may be a sign that you are paying a fraudulent business or that your legitimate servicer enrolled you in the wrong repayment plan. 

 

If you or someone you know has targeted by or been a victim of a fraudulent student loan repayment scam or any other type of fraud, we encourage you to report it via Fraud.org’s complaint system. Complaints filed with Fraud.org are shared with a network of more than 200 law enforcement and consumer protection agency partners who can investigate these crimes. 

Beware of charity scams following Hurricane Idalia and wildfires in Maui

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Following disasters, scammers frequently set up fraudulent charities to take advantage of consumers’ interest in helping victims. Beyond stealing victims’ money, these scams rob legitimate charities of funds that would otherwise go to support victims of disasters. Hurricane Idalia and the wildfires in Maui are no exception. At Fraud.org, we have seen an increasing tempo of reports of scammers fraudulently soliciting donations for these natural disasters. 

The basic premise of a charity scam is simple: fraudsters solicit donations on behalf of a non-profit effort, while actually diverting some (or all) of the funds to themselves. These phony charities crop up in many contexts in addition to natural disasters. For example, criminal charges have been brought in relation to scams targeting veterans assistance programs and political initiatives. In 2022, the FTC received over 10,000 reports of charity fraud. These scams can solicit funds through a variety of mediums, including social media, text messages, and robocalls. They sometimes impersonate governmental agencies or legitimate charity organizations, such as FEMA and the American Red Cross. However, they may also operate under a novel name and premise, trying to take advantage of media coverage in the wake of a disaster. 

If you’re looking to provide assistance to victims of Hurricane Idalia and the Maui wildfires, keep the following tips in mind: 

  • Don’t assume a charity is legitimate just because a friend promoted it on social media. 
  • Look for a history of charity work. If the organization was established a few days ago, it’s more likely to be a fraud. 
  • Be suspicious of charities seeking donations via cryptocurrency, gift cards, or wire transfers. These kinds of payment methods contain the least fraud protections and typically have greater uncertainty about who is receiving the funds. The safest way to donate is via credit card or debit card. 
  • Think twice before donating to a charity that is not listed on charitynavigator.org or the IRS’ tax exempt organization search. 
  • Legitimate charities shouldn’t pressure you into making a donation quickly. 
  • Check for signs that the charity is an imposter. Unusual wording and spelling mistakes are a red flag. Also be sure that the URL is spelled correctly—just one letter difference can redirect you to a scam. 
  • If you have been affected by a disaster, visit DisasterAssistance.gov for next steps on receiving federal aid. 

 

If you or someone you know have been a victim of a charity scam, we urge you to report it via Fraud.org’s secure online complaint form. Complaints are shared with Fraud.org’s network of consumer protection and law enforcement partners who use complaints to identify trends and build cases. 

IRS warns taxpayers of mail scam

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The Internal Revenue Service (IRS) is warning taxpayers about a new scam designed to trick potential victims into believing that they are owed a refund. IRS and government impersonation scams are nothing new. In fact, Federal Trade Commission data shows that they are one of the most reported forms of fraud for years now. However, this scam stands out from the rest as it involves postal mail and is related to a refund rather than outstanding taxes. 

Specifically, the impersonators are mailing cardboard envelopes containing a letter with IRS masthead and claiming to be regarding the recipient’s “unclaimed refund.” It then asks for multiple photos of the potential victim’s driver’s license and various personal information (such as a phone number, bank routing information, and a Social Security number) to receive the refund. As with other scams, the contact information provided by the fraudsters does not belong to the IRS. The personal information they are seeking allows the criminals to commit identity theft. Additionally, the letter is filled with awkward and incorrect phrasing—another common sign of fraud. 

Fraud.org continues to receive complaints from consumers regarding this and other IRS impersonation schemes. For example, a consumer reported receiving a letter with a demand for over $27,000 to pay off a tax debt that did not exist. Another individual living overseas submitted a fraud report detailing a phishing website pretending to help international taxpayers resolve IRS matters. 

To reduce your risk of being a victim of a government imposter scheme, keep the following tips in mind: 

  • Double check the legitimacy of any phone numbers, email addresses, URLs, or filing dates sent to you with the official information available on the irs.gov website. 
  • Typos, grammatical errors, and improper phrasing are all red flags that an incoming communication may be a scam. 
  • Remember that the IRS never contacts taxpayers via email, text, or social media regarding a bill or tax refund. 
  • Do not respond to suspected phishing attempts and do not click any weblinks that may be contained within the message. 
  • Report suspected fraud to fraud.org and learn more about official reporting mechanisms at the IRS here: https://www.irs.gov/privacy-disclosure/report-phishing 

 

If you or someone you know have been a victim of a tax scam, we urge you to report it via Fraud.org’s secure online complaint form. Complaints are shared with Fraud.org’s network of consumer protection and law enforcement partners who use complaints to identify trends and build cases. 

Check fraud is on the rise

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At a time when fraud has gone high-tech, with artificial intelligence being embraced to drive ever-more ingenious scams, scammers are again turning to an old-fashioned tactic: swiping physical checks from individuals’ mailboxes and U.S. Postal Service collection boxes. Despite the declining usage of checks over the past several years, incidents of mail theft are on track to nearly double this year and check fraud is on the same trajectory. Considering the significant amount of money that scammers can steal via check (especially when compared to cash or digital payments), the potential harm from this trend should not be ignored.  

The fraud is simple. Scammers open mailboxes flagged with outgoing mail (or they rummage through mail collection boxes) and steal envelopes they believe may contain a check. They can then douse the checks in consumer-grade chemical solutions to remove the original recipient and check amount information. Once the checks dry, the fraudsters fill in the now blank checks and address the check to themselves or an accomplice, rerouting the money away from the victim’s intended addressee.  

Mail theft naturally jeopardizes other payment methods as well. Scammers could easily charge a stolen credit card, especially if the victim had already activated it. Additionally, money orders can be rewritten similarly to checks. One Californian reported to Fraud.org that four of their Moneygram money orders were stolen from their mailbox, with two of them successfully cashed by the thief. The crime resulted in a $2,000 loss to the victim.  

If you’re thinking about sending or receiving money in the mail, remember the following:  

  • Drop off mail containing a check or credit card with an employee at a post office. Sending mail through a staffed post office will lower the chance of a fraudster intercepting your payment. 
  • Remove mail from your mailbox frequently. Fraudsters can’t swipe your incoming mail if you get to it first.  
  • Confirm with the recipient that they received the money. Additionally, check your bank statements for any charges that may be greater than authorized or sent to the wrong individual.  
  • Report fraud immediately. If you notice suspicious payments from your account, contact your bank as soon as possible to begin protective measures and possibly receive a refund. 

 

If you or someone you know have been a victim of check fraud, we urge you to report it via Fraud.org’s secure online complaint form. Complaints are shared with Fraud.org’s network of consumer protection and law enforcement partners who use complaints to identify trends and build cases. 

Be wary of quick cash for “ugly” houses

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Streets across the country are littered with “we buy ugly houses” and similarly phrased signs. While many of these ads are not false—consumers can get quick cash for an unsightly abode— there are many reports of the companies behind the signs using deceptive and predatory tactics to take advantage of vulnerable homeowners. From significantly undervaluing a seller’s house to outright lying to homeowners, bad actors have taken advantage of many consumers who are in a pinch. 

Predatory businesses in this space look to target individuals in difficult situations. These may be people who need cash quickly, who may be dealing with a death of a loved one, or who are experiencing cognitive issues. While buyers typically offer money up front, sometimes thousands of dollars, it comes with a catch. They may significantly undervalue the home, tack on junk fees, or trap the consumer in complicated contracts that make it difficult for the homeowner to back out. A ProPublica report investigating these purchases found numerous instances of buyers targeting older Americans with unfair and deceptive tactics. The report highlights an 82-year-old homeowner with dementia who lost 1/3 of the value of her house in such a deal. 

While entities touting their ability to offer cash for your “ugly house” are major proponents of these tactics, there are other unscrupulous businesses in this space to watch out for as well. Some of those offering reverse mortgages target similarly vulnerable homeowners with pitches that disguise the true cost (and net loss) of the proposition. Additionally, both buyers and financers have been documented lying to individuals to secure a deal. In one instance, they had falsely claimed that the victim was going to lose their home through legal action if they did not sell. Other individuals were deceived about how long they could remain in their home after they completed the sale.  

Beyond unfair contracts, there are more traditional scammers—those seeking your money for nothing in return. One consumer from California reported to Fraud.org that when they were at risk of losing their home, they were approached by a mortgage servicing company offering a solution. However, over a year later, the homeowner lost $19,000 to the fraudsters and still ended up in foreclosure.  

If there is an opportunity to sell or refinance your home, keep the following tips in mind: 

  1. Know the value of your home. Home value estimates and the price of recently sold homes in your neighborhood can be found online, often via free-to-use websites. Knowing the prices of properties comparable to your own house can help you better recognize if someone is taking advantage of you. 
  2. Get multiple quotes. If possible, try to get multiple offers from different businesses for the service you are seeking. 
  3. Review everything in writing. Especially scrutinize any fees, interest rates, future obligations, or cancellation mechanisms. 
  4. Seek an outside opinion. Run the offer by a trusted advisor. The U.S. Department of Housing and Urban Development has a directory of housing counselors. Note that while some services are free, such as those for foreclosure prevention, homeless counseling, and individuals who cannot afford a fee, HUD-sponsored counselors are permitted to charge reasonable fees for other services. 
  5. Search for reviews or warnings about the business or person pushing the offer. An online search of the company or individual’s name alongside “fraud,” “scam,” or “reviews” may produce warnings from other consumers, law enforcement, or watchdog groups. The Better Business Bureau may also be a resource for checking out companies looking to buy your home. 
  6. Pressure tactics are a red flag. If someone is prompting you to act quickly, often with a time-sensitive offer, think twice before accepting their proposal. 
  7. Be wary of unsolicited offers. Many bad actors in the housing space seek out individuals they believe to be vulnerable targets for their predatory tactics.  

If you or someone you know has been targeted by predatory home-buying services, we urge you to report it via Fraud.org’s secure online complaint form. Complaints are shared with Fraud.org’s network of consumer protection and law enforcement partners who use complaints to identify trends and build cases. 

Is that really your friend messaging you online?

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Social media has made it easier than ever to connect with people you know. This also means that scammers are only a few clicks away from causing serious harm. Consumers have submitted numerous reports to Fraud.org about scammers who have solicited money and personal information while impersonating someone else on a social media platform. 

This impersonation typically happens in one of two ways. In an account takeover, the fraudster gains unauthorized access to someone’s account. The other way is by setting up an imposter account where the fraudster creates a new account pretending to be someone else, often by using pictures that their target had publicly uploaded before. In both cases, the scammer will use the hacked or impersonated account to distribute a web link or ask for personal information from accounts in their target’s following/friends list.  

These messages often come with a plausible sounding ask. For example, imposter accounts may claim that they are trying to regain access to their original account and to help them do so, you must answer their questions or click on a link. It is also common for compromised accounts to share fraudulent money-making opportunities for things like fake cryptocurrencies or government programs. 

One consumer from Iowa reported to Fraud.org that a friend’s account shared details about a grant on social media. After learning more, the consumer was told that they qualified for the award, but they had to pay delivery fees first. In the end, the fraudsters took $1,000 from the Iowan through bogus fees and the grant never materialized. 

If you think an imposter is contacting you, remember the following tips: 

  1. Do not open any links or comply with requests for information. Even if they provide reasonable justification for their requests, you could be putting your own account at risk by cooperating. It is best not to interact or respond to a suspicious account.  
  2. Do not send them money. It is unusual for people to ask for money over social media. If you are close enough with someone that they are asking for help, they should be able to get in touch with you by other methods. 
  3. Contact the person another way. If you think someone might be impersonating your friend on social media, send your friend a text message and see if it is really them. If you suspect that their phone may be stolen (or that they are a victim of SIM-swapping), ask a mutual friend if they have noticed unusual behavior as well. 
  4. Report the account. Most social media platforms allow users to report accounts for suspected impersonation, fraud, or both. The sooner the platform becomes aware of the problem, the quicker they can take action. 
  5. Pay attention to warnings from the platform. Major digital platforms that allow messaging between users will automatically filter out suspicious communications. Think twice before opening messages flagged as spam.  

If you or someone you know has been a fraud victim, help yourself and other by reporting it! By using Fraud.org’s secure online complaint form, your complaint will be shared with our network of consumer protection and law enforcement agency partners. 

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