Don’t get spooked by phantom debt collectors – Fraud.org

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The phone rings and a scary voice on the other end tells you that you owe them money and need to pay up … or else. The caller leads you to believe that a recent loan you took out has come due and that its time to pay or face legal action. Frightening, right?

This terrifying scenario has been experienced by thousands of consumers in recent years due to con artists running the “phantom debt collector” scam. In recent weeks, consumers have contacted Fraud.org in increasing numbers, suggesting the scam is once again on the rise.

The phantom debt collection scam comes in a number of variations, but the common element in almost all of them is a claim that a consumer owes money on a debt and needs to pay or else face serious consequences. Often, the scam begins when a consumer inquires about a payday loan or other short-term credit online or over the phone. The Web site or phone number that the consumer contacts may or may not be associated with a legitimate lender. Regardless of whether the consumer actually takes out a loan, he or she may receive a call later demanding money be paid. Since consumers interested in payday loans are often financially strapped, they may be susceptible to such demands whether or not they actually took out a loan.

Even for consumers who do not have outstanding debts, the con artists are threatening and convincing and have led some consumers to wonder whether someone has taken out loans in their name. In cases where a consumer actually does have outstanding loans, the scam artist may claim that the victim owes far more in fees and interest than he or she actually does. In other cases, the victim of the scam may be behind on a loan, but the caller has no authority to actually collect on the debt. No matter the consumer’s actual situation, skilled con artists are convincing them to hand over precious cash to settle the “debt.” Scammers often demand payment on these phantom debts via wire transfer, credit or debit card.

In a major enforcement action brought by the Federal Trade Commission in 2012, scammers working out of call centers in India claimed to be law enforcement officers who threatened to arrest victims if money was not paid. One outfit alone made at least 2.5 million calls, collecting more than $5 million before it was shut down. In other recent cases, the scam artists, again apparently working out of India, have threatened a negative credit report if payment is not made.

Consumers should be on the lookout for these scams. Here are some tips for spotting and avoiding being a victim:

  • If you receive a call from someone claiming to be a debt collector, ask for the person’s name and address, the company they represent and the original creditor (if indeed you have an outstanding loan). If they can’t provide this information, hang up;
  • If you’re concerned about the status of an unpaid debt, hang up and call the creditor back yourself at the phone number provided on your loan paperwork;
  • If the amount demanded is significantly more than the debt you owe, it’s probably a scam;
  • Check your credit report. If the debt the caller claims you owe is not listed on there, it’s probably a scam;
  • Don’t be intimidated if the debt collector is abusive or threatens legal action or arrest. Request that written notice of the debt be mailed to you and tell them that you do not wish to be contacted again about the debt. Under the Fair Debt Collection Practices Act, a debt collector must respect this request.
  • If you suspect that the caller is a phantom debt collector, hang up and report the scam to Fraud.org.

Read our other Fraud Alerts here.

Single-use prepaid cards new payment method of choice for con artists – Fraud.org

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For decades, the payment method of choice for scammers looking to collect money from victims has been through a wire transfer, like those provided by Western Union or MoneyGram. Victims wire the money from one location to another—sometimes even overseas—and criminals get away with untraceable cash. But recently, experts are noticing a shift. In 2014, for the first time in years, single-use prepaid cards—like Green Dot’s MoneyPak, InComm’s Vanilla Reload, Blackhawk’s Reloadit, and Bancorp’s NetSpend—have bumped wire transfers as the way most consumers are paying money to scammers.

In many cases, consumers are instructed by a scammer to take cash to a retail location, load it on to a prepaid card and either send the physical card to the scammer or the scammer’s accomplice. In other cases, consumers are asked to load cash on to the card and then provide a PIN or control number (viewable via a scratch-off on the back of the card) to a scammer, who can then deduct funds remotely. In both scenarios, scammers will try to convert the funds on the cards in to cash as quickly as possible so that the transaction can’t be stopped.

A complaint we received from a consumer in Phoenix, Arizona is typical of how these cards get used by scammers. She writes:

“This lady on Instagram said she was going to sell me two pairs of shoes for $300. She said to put $300 into a NetSpend Reload Pack. As soon as I did I sent her the code on the back of the card as she asked and then she completely ignored me. She stopped texting me and ignored all my calls. I called the Netspend company and there is nothing they can do about it.”

Another consumer from Woodstock, Maryland describes a call she received from someone impersonating an IRS agent:

“’Hi officer Julie Smith from Internal Revenue Service […] Don’t disregard this message and do return the call before we take any action against you. Goodbye and take care.’ My husband called back from his cell phone. They told him that he would be arrested for tax fraud if he didn’t pay. They had him go to Food Lion and buy $3,500 in Reloadit cards. They then asked for the number on the back. The money is now gone. Reloadit said that there is nothing that they can do.”

While scammers will always be on the lookout for new ways to get paid, consumers can arm themselves with the information they need to detect red flags:

  • If you are asked to send payment via a prepaid card to someone you only know online or via the telephone, it’s likely a scam;
  • Treat prepaid card PIN’s and control numbers carefully – if you give them out to someone else, it’s like giving them cash;
  • If you do give a PIN or control number (or a physical card) to someone you suspect may be a fraudster, contact the prepaid card provider immediately. Unfortunately, consumers don’t enjoy the same protections on prepaid cards that they do on credit and debit cards, so you may not enjoy the same anti-fraud protections;

If you’ve been approached by a fraudster, or someone you suspect may be pushing a scam, report the incident to www.fraud.org.

Read our other Fraud Alerts here.

Gen Z students should beware scammers preying on back-to-school shoppers

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As the calendar turns to September, millions of Gen Z’ers are headed back to school. With COVID-19 still a huge concern, “back to school” means a variety of things this year: traditional in-person classes, all-virtual classes, or hybrid models of the two. Regardless of what the first day of school looks like, chances are that getting new clothes for first-day-of-school photos is on the to-do list. Advocates are warning, however, that young clothing shoppers are being targeted in a new scam and they need to be on the lookout.

Discount, vintage, or second-hand fashion buying apps targeted at Gen Z and Millennial customers with names like Depop, Poshmark, ThreadUp, and LetGo have been growing in popularity. These apps typically connect buyers and sellers of secondhand merchandise, especially fashion items or in-demand technology accessories like headphones or cell phone cases.

Depop is one of the fastest-growing apps in this category. It has been downloaded more than 5 million times on the Google Play Store and is currently the #4 shopping app on the Apple App Store. At a time when traditional clothing retailers’ fitting rooms may still be closed due to COVID, these apps are well-positioned for an even bigger surge in popularity.

While the services can be a great place to score a deal, scammers are also paying attention to the platforms’ new popularity, fueling a significant uptick in complaints from users.

In a typical scam, scammers posing as legit sellers post deeply discounted merchandise (think luxury fashion, the latest sneakers, or in-demand technology like gaming consoles). As shoppers show interest, the seller urges the user to complete the transaction outside the platform’s built-in payment system. Complaints we’ve reviewed have indicated that scammers often ask buyers to use P2P payment apps like PayPal’s Friends & Family, Zelle, or CashApp or even less secure payment methods like gift cards or wire transfers. Scammers seek victims willing to complete payment this way because it is harder for a transaction to be disputed when it occurs off of the selling platform.

Whether you’re a Gen Z’er shopping for the must-have fashion of the fall, or are just looking for a deal, here are tips you can use to spot and avoid these scams:

  1. Always pay via the platform’s preferred payment methods. If a seller asks you to pay another way, even if it’s to “avoid fees,” chances are that it’s a scam.
  2. Check the prices on similar merchandise on the app and on other apps. If that Louis Vuitton handbag or Supreme hoodie you’re interested in is listed at a fraction of the cost of similar bags elsewhere, there’s a high likelihood that it’s a scam.
  3. Beware of sellers who don’t have any customer reviewers or who *only* have positive feedback. No feedback could point to a scammer who has created multiple accounts and is churning through them as the old ones get banned. Someone who *only* has positive feedback could be paying accomplices to write bogus reviews. Look for balanced reviews and see how sellers have handled negative feedback from customers.
  4. If you get scammed, report it promptly to the platform. While the platform may not be able to get your money back for you, reporting the scam can help other users avoid falling victim.

If you suspect that you have become a victim, report it immediately. You can file a complaint at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can investigate and help put fraudsters behind bars.

Read our other Fraud Alerts here.

Use caution when talking to ‘old friends’ on Facebook

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Facebook is a terrific tool for staying in touch with old friends, former classmates, family, and community members. Unfortunately, like other popular social media platforms, it also attracts scammers looking to abuse the system for their own gain. We’ve recently heard from nearly a dozen consumers who have contacted Fraud.org about scammers using Facebook’s Messenger service to try to defraud them by posing as long lost friends.

The set-up for these scams is remarkably consistent. Consumers who sent us complaints report that these scams begin when they receive a message on Facebook Messenger from someone impersonating a former classmate or an old friend. When the recipient responds, the scammer strikes up a conversation to build trust. Once trust is established, the impersonator urges the consumer to send a text message to a number the scammer controls to get information on a grant, prize, or even government stimulus funds. When the victim texts the number, they are urged to pay an up-front fee and/or supply personal information (Social Security number, bank account/credit card information, etc.) to collect the non-existent money. Victims who do send the money are then urged to send even more money until they catch on. Unfortunately, the money is often sent via wire transfer or gift cards, which are extremely difficult or impossible to stop or reverse.

While this scam is not new, the request to take the conversation off Facebook Messenger and on to text message is a new twist. This is likely due to the scammers trying to evade anti-fraud technology employed by Facebook.

Here are tips to reduce your risk of falling victim to this scam:

  • Don’t immediately assume your Facebook friend is who they claim to be. Thanks to widespread data breaches, it is not difficult for scammers to get the information they need to compromise a Facebook account. If you receive a message from someone you have not spoken to in a long time, do not assume that the message is legitimate. The safest course of action is to simply ignore the message.
  • Test them. If you do engage in a conversation and become suspicious, you can try to verify the identity of the person messaging you by asking them a question only they would know (i.e., who was our 9th grade English teacher?).
  • Beware requests to take conversations off Facebook Messenger. Complaints we have received often describe requests to move conversation from Facebook (where they can be monitored) to text message. This is a big red flag for fraud.
  • Anyone who asks you to send money to get money is swindling you. If you are asked to pay money to collect a prize, grant, stimulus check, or any other type of reward, it is a scam.
  • Turn on two-factor authentication and encourage your friends to do the same. One of the reasons this scam occurs is that consumers tend to re-use passwords across multiple websites (your email and Facebook account, for example). That means that if your username and password are compromised at one website, scammers can use that information to try and compromise your account at other websites. An effective way to reduce the risk of this is to turn on two-factor authentication. This will require anyone trying to log in to your Facebook account to supply a special code (typically provided via text message or an authentication app) before they can log in.

Bonus Fraud Alert: Facebook copy/paste scams

If you have perused your Facebook newsfeed for any appreciable length of time, chances are that you have come across a message from a friend urging you to “copy and paste” their message instead of using Facebook’s “share” function. These “copy and paste” instructions often come at the end of a heart-warming, controversial, or political story.

These messages may seem innocuous and they may make you feel good by helping to spread a message you agree with. However, by copying and pasting a message instead of using the “share” function, you may be helping marketers (not all of who are legitimate) build lists of people to contact later with friend requests or other messages. A tell-tale sign of such scams is misspelled or unusual words or phrases in the text of the message. Including those in a message helps the scammers search on that misspelled word or phrase and easily build lists of the people who have helped to spread the message.

The easiest way to avoid this scam is to ignore any message on Facebook that urges you to “copy and paste” instead of “sharing.”

If you suspect that you have become a victim, report it immediately. You can file a complaint at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can investigate and help put fraudsters behind bars.

Read our other Fraud Alerts here.

Utility shut-off scammers threaten to turn off the lights on consumers during pandemic

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As the world reels from the COVID-19 pandemic, in addition to the threat to public health, the virus is also wreaking unprecedented economic havoc. Tens of millions of Americans are out of work, and many are wondering how we are going to keep the lights on. Unfortunately, scammers are aware of this, too. NCL has recently seen a spike in consumer complaints about scammers posing as local power company representatives threatening to shut off fearful consumers. 

The anatomy of the scam is highly consistent: a consumer receives a call from someone claiming to be with the electric utility company. The caller warns the consumer that their power is about to be shut off over an unpaid bill. The only way to avoid this is to pay up immediately, typically via wire transfer, gift card, or some other difficult-to-stop payment method.

Such a call can be very scary—particularly for those who may need electricity to power medical devices or run their small business. Unfortunately, due to the COVID-19 pandemic, many consumers are having trouble keeping up with their bills, which may make them even more vulnerable to this scam. And even for consumers who are confident they’ve paid their bill, the impending threat of a shut-off at the height of summer heat can cause a panic.

The story we received recently from a consumer in Detroit, Michigan is typical of these scams. She writes:

“I was called by [someone] claiming to be a manager for DTE stating that my bill had not been paid and my services were going to be shut off and would not be turned back on for another week if I didn’t pay him in 40 minutes. I was told to drive to a Speedway where I loaded $400 on to one card and $387.63 on the second card. I immediately gave the man the 14-digit code on the back and he advised me that services would not be shut off.”

To spot the red flags of these scams, and avoid becoming a victim, here are some tips that you can use:

  • Don’t panic. According to the National Association of Regulatory Utility Commissioners, electric utilities in all 50 states have placed moratoriums on disconnections during the COVID-19 crisis, either voluntarily or in response to government orders. If someone contacts you claiming that they’re about to shut-off your electricity, it’s a scam.
  • Worried? Contact the power company. A utility will never initiate a disconnection without contacting you via the mail first. If you received a call from someone claiming they’re about to turn off your power, hang up and contact your electric company. Their toll-free phone number and website address is typically listed on your electric bill.
  • Beware of unusual payment methods. Anyone who asks you to pay an overdue electric or other utility bill via wire transfer, gift card, bank-to-bank transfer, bitcoin, or any other unusual payment method is almost certainly trying to scam you.
  • Do not give out personal information. Utility imposters may offer to connect their victims to federal assistance programs or payment plans to help pay their overdue bills. They just need to “verify” the victim’s information. In reality, these scammers are trying to gather the information they need to steal your identity. If you suspect something is amiss, hang up and call your utility company directly.

If you suspect that you have become a victim, report it immediately. You can file a complaint at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can investigate and help put fraudsters behind bars.

Read our other Fraud Alerts here.

Lost your job? Be careful ID thieves don’t take your unemployment benefits, too!

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The latest reports are historically grim: nearly 40 million Americans have been thrown out of work due to the COVID-19 pandemic.

For the tens of millions of newly jobless, state unemployment insurance benefits are a lifeline that helps them keep the lights on and provide food for their families.

Unfortunately, to add salt to the wounds of the newly unemployed, circumstances are ripe for identity thieves. The combination of billions of dollars in federal stimulus money flowing in to state unemployment funds and tens of millions of new claimants has created a once-in-a-lifetime opportunity for identity thieves seeking to steal those benefits. 

According to the Secret Service and multiple media reports, organized rings of criminals are working to siphon off unemployment insurance payments, potentially worth hundreds of millions of dollars, intended for workers laid off due to the COVID-19 pandemic. In the state of Washington, for example, scammers reportedly made off with unemployment benefits worth nearly $1.6 million in a single month. This scam is reportedly even affecting consumers who have not yet lost their jobs.

How the scam works

Identity thieves use databases of personal information (likely obtained via data breaches) to create phony accounts on state unemployment insurance office websites. Once they successfully create an account, they have the benefits direct-deposited into a bank account controlled by the scammer or an accomplice. The scammer then uses the deposited funds to purchase untraceable bitcoins, gift cards, or money orders. Those purchases are often performed by so-called “money mules” who may themselves be ensnared in a romance fraud or work-from-home scheme run by the scammers.

If you’ve recently become unemployed, the following steps can help you reduce your risk of becoming a victim of this scam:

  1. Log on and create a profile on your state unemployment office’s website as soon as you are laid off. This will reduce the window of opportunity for scammers to create fake profiles in your name and steal your unemployment benefits. For information on your state’s unemployment insurance benefits and instructions on how to file a claim, click here.
  2. If you have already created a profile with your state unemployment office, log in and verify that no one has filed a claim in your name. If you’ve used a password on your profile that you’ve used on other accounts, change your password to something unique that you haven’t already used elsewhere.
  3. If you receive communication that someone else has applied for unemployment benefits in your name or your unemployment benefits claim was denied because someone else already applied, file a fraud complaint with your state’s unemployment office promptly. The U.S. Department of Labor maintains a list of state unemployment fraud hotlines at this link.
  4. Put a credit freeze on your credit report with the three major credit reporting bureaus (Experian, Equifax, and TransUnion). If identity thieves have the personal information necessary to steal your unemployment benefits, they likely also have the information they need to take out credit or engage in other criminal activity. A credit freeze will prevent anyone from accessing your credit file until you unfreeze it with a PIN. For more information on credit freezes, refer to this FAQ from the Federal Trade Commission.
  5. If you’re looking for work, beware of online ads or unsolicited email and text offers to participate in work-from-home job opportunities. Common schemes involve offers to be a mystery shopper, payment processing agent, money transfer agent, or other similar jobs where you are asked to allow deposits to be made to your personal bank account. These jobs don’t exist and participating in one (even unwittingly) could land you in legal trouble.

If you’ve been affected by an unemployment benefits fraud or any other coronavirus-related scam, we want to hear from you! By filing a complaint at Fraud.org via our secure online complaint form, you can help law enforcement bring scammers to justice. We share complaints with our network of nearly 200 law enforcement and consumer protection agency partners who can and do put fraudsters behind bars.

Read our other Fraud Alerts here.

Fueled by COVID-19, pet adoption scams on the rise 

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You may have heard heartwarming stories about how all the animals in community pet shelters have been adopted out during the pandemic by people choosing this time to adopt a furry friend.

Unfortunately, scammers are busy looking for clever ways to defraud consumers out of their much-needed cash, and the pandemic is providing opportunities. Overall, Fraud.org has seen a 79 percent increase from COVID-related complaints from March to April alone. And one scam in particular — pet adoption scams — has seen a significant spike.

For the February-April time period, we have seen a 42 percent jump in complaints about pet adoption scams versus the same period in 2019. Our colleagues at PetScams.com also report a similar spike in interest, with more than twice the number of visitors to their website in April as they had in March.

This spike in pet adoption scams is undoubtedly being driven by the COVID-19 pandemic. These scams have been around for years, but the current pandemic circumstances are providing the perfect environment for scammers to succeed at this particular scam. Here’s why:

  • Traditional pet adoption channels such as animal shelters, rescue organizations, and local breeders been shut down due to the coronavirus, leading more consumers to look online for pets and stumble on to phony pet adoption websites;
  • The pandemic is forcing consumers to remain isolated, so more people may be searching for animal companions overall;
  • Because of social isolation required by COVID, potential pet owners may be more willing to try and obtain a pet that they have not seen in person; and
  • Consumers who are new to purchasing goods online may not be accustomed to spotting the warning signs of fake websites and may be more susceptible to these scams.

In a typical pet adoption scam, a criminal will create a fake website with a domain name related to a particular breed of dog or cat, potentially combined with words like “puppy” or “kitten.” The service will be advertised on classifieds websites, social media, via phishing emails, or by other means to drive traffic. The websites tend to have photos of cute animals to entice visitors to reach out to the website owner (who is, in reality, a criminal with no animals to offer).

Consumers who respond to the ads will be instructed to pay fees before the animal can be shipped. These fictitious costs may include “shipping fees,” “inoculations,” “quarantine fees,” “insurance,” or even “COVID-safe shipping crates.” Regardless of the excuse given by the “seller” of the fictitious animal, the aim is always the same: get the victim to continue paying and/or providing valuable personal information until they either catch on or run out of money.

A complaint we received from a consumer in South Carolina is typical of these scams:

“We contacted a seller on Craigslist about a puppy that she was giving away for free. She lived in Montana so [she] would have to ship the dog, which was originally agreed to be only $300. The shipping company told us that they required $500 more for a crate. Then the next day they claimed the dog was stuck in Florida and we would need to pay an additional amount of $650 for pet insurance. … Once we stopped responding to the shipping company, they threatened [us] with dog abandonment, and the seller was also adamant that we are torturing the puppy.”

To avoid these scams, we suggest the following steps:

  • Put your search on hold. Avoid shopping for a pet until after the COVID lockdowns have been lifted. If you cannot touch an animal with your own hands, there’s a risk it could be a scam.
  • Never pay any fee to obtain an animal that you have not seen with your own eyes (as opposed to via pictures or videos online).
  • If anyone asks you to send money overseas, particularly to pet adoption scam hotspots such as Cameroon or India, it is a scam.
  • Beware of “free” pet offers online. These are often simply ruses to get you to pay shipping or other fees for non-existent animals.
  • If you are planning to buy a specific breed of animal, make sure you are working with a reputable breeder or rescue organization. The American Kennel Club and the American Humane Society are good places to start when looking for reputable, ethical breeders and rescue groups;

If you’ve been on the receiving end of a pet adoption scam or any other coronavirus-related phone call, email, or text message that you think is a scam, we want to hear from you! By filing a complaint at Fraud.org via our secure online complaint form, you can help law enforcement bring scammers to justice. We share complaints with our network of nearly 200 law enforcement and consumer protection agency partners who can and do put fraudsters behind bars.

Read our other Fraud Alerts here.

Beware the coming coronavirus scam tsunami

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When news captures the public’s attention – think major hurricanes, terrorist attacks, and economic slowdowns – scammers come out of the woodwork to take advantage of legitimate fears and concerns. With coronavirus dominating the news globally, there is an unprecedented opportunity for criminals to use the public’s fears about the virus and the resulting economic downturn to defraud consumers.

Over the next few months, we will devote our monthly Fraud Alerts to giving consumers the tools to spot and avoid some of the many types of scams related to COVID-19. To kick off this series, we’re focusing on two of the most pernicious types scams that are increasing due to coronavirus: robocalls and stimulus check scams.

Coronavirus-related robocalls

Robocalls are, at the very least, a major annoyance for most consumers. However, as the coronavirus has upended daily life, robocall operators have quickly shifted to blasting out spam phone calls offering all manner of coronavirus-related products and services. YouMail, a cloud-based telecommunications provider that tracks robocall volumes, estimates that at least one million robocalls per day are inundating Americans’ cell phones. Fraudulent robocallers are offering air duct sanitation services, work-from-home opportunities, cut-rate health insurance, and immune-system boosting nutritional supplements. Other robocalls have reportedly offered free insulin kits to diabetics, along with free coronavirus testing kits.

“At best, consumers who respond to these calls are setting themselves up to lose money for a non-existent product or service,” said John Breyault, director of NCL’s Fraud.org campaign. “At worst, delaying needed emergency treatments on the belief that a fake coronavirus treatment will save your life could be deadly to you and those you come into contact with.”

Our advice to consumers is simple:

  1. If you receive a call from a number you don’t recognize, the safest course of action is simply to ignore the call.
  2. If you answer a call and suspect it’s a robocall, simply hang up. Don’t press any of the numbers the message tells you to.
  3. Never give any personal information, such as financial account number, Social Security number, full name, or mailing address to someone who contacts you via an unsolicited phone call or text message.
  4. Do not click on any links sent to you via text message from someone you don’t know. They could lead you to malware or phishing websites.
  5. If you’re being inundated by robocalls, your cellular provider may offer services that will increase the likelihood that the calls will be blocked.

Stimulus check scams

Last week, President Trump signed the biggest stimulus bill in U.S. history into law. Most American adults will receive a stimulus of $1,200 or more in the coming weeks thanks to the legislation. Crooks are already using these promised payments as a way to defraud consumers. Scams that have been reported involve crooks promising to expedite payment in exchange for a fee, impersonating a government official, and requesting sensitive personal information in order to process a check. Inaccurate social media posts have also circulated suggesting that consumers need to fill out the 2020 Census before they can receive a stimulus check.

“Stimulus checks will help millions of American households weather the coming economic downturn,” said Breyault. “Unfortunately, the phrase ‘free money from the government’ is magic to scammers’ ears. Consumers should be on the lookout for fraudsters who will try to use the coming stimulus checks to steal their money.”

Consumers can protect themselves from these scams by learning to spot these red flags:

  • The stimulus checks will be deposited automatically by direct deposit into consumers’ bank accounts for the vast majority of citizens who filed their taxes last year. Consumers without a bank account on record with the IRS will receive a paper check, but it may take several weeks longer to arrive than those who have bank accounts.
  • Anyone who emails, texts, messages, or calls you claiming to be able to expedite your stimulus check is a scammer.
  • Anyone who contacts you requesting sensitive information like PayPal account details, bank account information, or credit card numbers is trying to scam you.
  • Your answers to the Census, and whether you’ve completed it, have no impact on your eligibility for a stimulus check.

These are just the tip of the iceberg when it comes to coronavirus-related scams. If you’ve been on the receiving end of a coronavirus-related phone call, email, or text message that you think is a scam, we want to hear from you! By filing a complaint at Fraud.org via our secure online complaint form, you can help law enforcement bring scammers to justice. We share complaints with our network of nearly 200 law enforcement and consumer protection agency partners who can and do put fraudsters behind bars.

Read our other Fraud Alerts here.

Spot the top ten scams plaguing Americans

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It’s National Consumer Protection Week, and there’s never been a better time to brush up on your scam IQ. To help, we’ve released our annual Top Ten Scams report, based on thousands of complaints submitted by real consumers like you to Fraud.org last year.

Each year, we monitor and analyze the complaints to track trends in scams and how con artists are tweaking their pitch to succeed at finding new victims. Our data helps us identify emerging scams we’d never heard of, what scams are fading into the sunset, and new twists on old classics.

So without further ado, here are the most reported scams from 2019 and, just as important, tips on how to spot and avoid them so that you don’t become a statistic on next year’s report …

1. Internet merchandise scams

The set-up: Scammers offer cut-rate merchandise on the Internet in the hopes that consumers looking for a deal will buy.

How to avoid it: Buy from reputable sellers. If the price for an item is well below the price offered on e-commerce sites like Amazon, there’s a good chance it’s a scam, particularly if the merchandise is electronics, luxury apparel, or medications.

2. Phishing/spoofing

The set-up: Scammers use legitimate-looking emails or spoofed Caller ID to get consumers to think they’re getting an email or phone call from the government, their bank or another entity. Once the scammer has the victim convinced they’re someone they’re not, they threaten them to get money or sensitive personal information.

How to avoid it: If someone you don’t know calls you on the phone or sends a threatening email demanding quick payment, it’s likely a scam. Delete the email or hang up the phone.

3. Fake prizes, sweepstakes, or free gifts

The set-up: The scammer contacts you to let you know you’ve won a big prize. All you must do to collect is pay them a fee for “insurance,” “taxes,” “processing” or some other reason.

How to avoid it: The prize doesn’t exist. They’re just after your money. If someone asks you to pay money to win money, it’s a scam.

4. Fake check scams

The set-up: Someone you’ve never met in person sends you a check and asks you to deposit it into your personal bank account. Then they ask you to send them some or all the proceeds from the check via wire transfer, by buying a gift card, or some other method.

How to avoid it: Don’t deposit the check and definitely don’t send money based on funds that may appear available if you deposit it. The bank will catch on, and you’ll potentially be left owing the bank for the negative balance.

5. Advance fee loans, credit arrangers

The set-up: Scammers offer a “guaranteed” credit card or bank loan to consumers looking for cash. All the victim needs to do is pay an up-front fee to obtain the loan.

How to avoid it: Only look for loans or credit cards from reputable lenders. If a lender offers you a “guaranteed” credit card or loan without a credit check, it’s probably a scam.

6. Romance scams/sweetheart swindles

The set-up: Someone you’ve met online on a dating website, online forum or via social media quickly develops a friendship or romantic relationship with you. Eventually, they ask for money for a visit, to cover an unexpected emergency, or some other reason.

How to avoid it: Don’t leave protected dating website messaging platforms for unprotected text or instant messaging chats. Never send money to someone you’ve only met online or talked to over the phone.

7. Recovery/refund scams

The set-up: If you’ve lost money in a scam, someone may claim to be able to recover those losses for you. The only catch it that you must pay a fee or hand over sensitive personal information like bank account numbers or grant access to your computer in order to recover your losses.

How to avoid it: You should never pay money or give up personal information in order to recover fraud losses. Anyone who claims to be able to help you recover your losses in exchange for a fee is just trying to scam you.

8. Computer equipment/software

The set-up: Also known as the tech support scam, a caller may claim to be with a well-known software company like Microsoft or an anti-virus company and have information that your computer is infected with malware. They request remote access to your computer in order to “diagnose” the problem. They may then urge you to buy an expensive tech support solution to “fix” the problem.

How to avoid it: If someone calls you unsolicited offering tech support, it’s almost certainly a scam. Scary pop-ups on your phone or computer may also urge you to call a phone number to get the problem fixed. Don’t fall for those either as they are simply a lure to get you paying for tech support you probably don’t need.

9. Investment related scams

The set-up: Someone may offer you “guaranteed” returns with little or no risk in exchange for a big up-front investment. Investment in gold coins, precious metals, Bitcoin, real estate, or Internet startups are often used to entice unwary investors.

How to avoid it: Investigate anyone offering to make an investment on your behalf. Get documentation about the track record of the investment and check to make sure the “advisor” is registered with the state or federal government. If they pressure you to make a decision right away, chances are that it’s a scam.

10. Family/friend imposter

The set-up: A caller claims to be a family member or friend in trouble (or someone helping them, like a lawyer, doctor, or policeman). They urge the victim to send money to help out their loved one. The scammer may have details about your friend or family member (likely gleaned from social media).

How to avoid it: Hang up the phone and call your friend or family member yourself. If they don’t answer, try another relative who knows them to verify what’s going on. Any urgent request to send money without verification is almost certainly a scam.

Even if you’ve studied up on the most prevalent scams, we’re all vulnerable. If you’ve been approached by a scammer or lost money, report the scam. You can help other consumers avoid these and other scams by filing a complaint at Fraud.org via our secure online complaint form. We share complaints with our network of nearly 200 law enforcement and consumer protection agency partners who can and do put fraudsters behind bars.

Perusing dating sites? Beware the latest twist on romance scams: The Sugar Daddy set-up

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With Valentine’s Day around the corner, love is in the air at dating websites of all sorts. But there’s a new twist on romance scams that is preying on profile holders at “sugar daddy” dating websites, which have grown in popularity in recent years. In 2019, the number of complaints from consumers about this type of scam exploded at Fraud.org, growing by more than 250 percent.

If you’re not familiar with “sugaring,” you’re not alone. It’s a growing trend where younger women and men (who call themselves sugar babies) look for an older “sugar daddy” or “sugar momma” to pay them in gifts or cash in exchange for companionship (which may or may not involve sexual relations). The practice exists in a legal gray area, but judging by the number of followers of some of the more popular sugar babies on social media networks, including Instagram and YouTube, there may be significant numbers of consumers looking for these types of relationships. For example, one of the more popular sugar daddy websites, Seeking.com (also known as SeekingArrangement) reportedly had 4 million users (including 1.2 million college students) as of 2017.

Given the rise in popularity of these sites and the sensitive nature of the relationships, it’s no surprise that scammers are increasingly preying on the community.

Here’s how the scam works: A scammer approaches a user who is looking for a sugar daddy or sugar momma on dating websites or social media platforms. The scammer poses as a prospective sugar daddy and nurtures a relationship, ultimately offering to pay off the credit card balance of their sugar baby victim. If the victim agrees, the sugar daddy scammer will obtain the victim’s credit card account credentials and then deposit funds into the victim’s account, appearing to have paid off the debt.

Once this is done, the scammer—still playing the role of sugar daddy—demands that the victim purchase gift cards (such as Apple iTunes cards, Google Play cards, or Steam cards) that can be redeemed remotely as a thank you to their new patron. Too often, the sugar baby goes along with the scheme (remember: their credit card account appears to have just been paid off by their generous new friend), buys the gift cards, and sends codes for the cards to their sugar daddy. Any funds deposited on the gift cards is quickly drained by the scammer. Sugar babies who refuse to buy gift cards report being met with abusive, threatening, or even black-mailing responses from the new friend and often cave to the pressure.

Unfortunately, the accounts used to pay off the credit card balances are fraudulent, and once a credit card company catches on, the recently deposited funds will disappear from the account, leaving the victim on the hook for both the original balance and the cost of the newly purchased gift cards.

We don’t recommend that anyone consider looking for a sugar daddy or sugar momma online, but if you do, be aware of some of the red flags of this scam. All of these are flags for online dating relationships of any nature, and can happen via any dating website:

  1. If a new romantic interest asks for your credit card account credentials or any other sensitive information such as bank routing information, Social Security number, home address, or cell phone number, it’s a scam.
  2. If a “sugar daddy” offers to pay off one or more of your debts (such as credit card balances, student loans, rent, etc.), there’s an enormous possibility it’s a scam.
  3. If your “sugar daddy” urges you to move conversations that began on dating websites on to email, IM, text message, or over the phone, it’s very likely a scam.
  4. Never share sensitive photographs or text messages that you wouldn’t want to be viewable publicly with a sugar daddy or other online suitor.

If you’ve been approached by a sugar daddy you suspect of being a scammer, or if you’ve already fallen victim to one of these scams, contact your bank or financial institution immediately. While your bank may not be able to recover lost funds, they can shut off access to compromised accounts to prevent further damage.

Finally, you can help other consumers avoid this scam by filing a complaint at Fraud.org via our secure online complaint form. We share complaints with our network of nearly 200 law enforcement and consumer protection agency partners who can and do put fraudsters behind bars.

Read our other Fraud Alerts here.

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