Who among us hasn’t been called on to help a Nigerian prince? An army of them bombard our inboxes each day. And while most might be familiar with this particular type of scam, there are millions of others out there, each with its sights set on your money.
In 2018, the Federal Trade Commission collected reports of 3 million scams, including financial fraud and identity theft. People who reported the fraud said they lost money to 25% of those attempts, amounting to $1.48 billion. Total losses for fraud, identity theft and other scams were closer to $3 billion.
Here are the top seven financial scams of 2018:
1. Imposter scams
Total loss: $34 million
Median loss: $900
What is it? Overwhelmingly the most costly and most prevalent type of scam reported by American consumers — imposter scams — involve a fraudster pretending to be someone you trust in order to trick you into handing over money or information, like a password, or your Social Security number.
Sometimes the imposter pretends to be a relative or friend in need of money. Other times, they pretend to be a business associate who needs you to make a payment, or a computer technician who needs you to provide login credentials.
Other common imposter scams include fraudsters pretending to be Internal Revenue Service agents, claiming you owe tax and will be arrested if your outstanding balance isn’t paid immediately. The IRS has been hard at work trying to inform people about this scam, pointing out that the IRS will never phone a taxpayer without first mailing a bill.
According to the Treasury Inspector General for Tax Administration, this scam is “the largest, most pervasive impersonation scam in the history of the IRS” and has targeted more than 2.4 million Americans.
The United States Senate Special Committee on Aging reported that the IRS imposter scam is the most frequently reported scam by elderly Americans. Other imposter scams targeting elderly Americans include imposters pretending to be their grandchildren, posing as romantic interests, or as officials of the U.S. Social Security Administration.
We often think that it’s the elderly who fall for these scams but, according to the FTC, 43% of people in their 20s reported losing money to fraud and only 17% of those in their 70s did. But while fewer older people reported losing money to scams, they lost more, on average, than other age groups.
2. Prizes, sweepstakes and lottery scams
Total loss: $10.4 million
Median loss: $3,150
What is it? Ever get a call letting you know that you won a spot on a cruise? Odds are it was a scam. Prizes, sweepstakes and lottery scams typically include any promotions for “free” prizes — if you pay a fee. These lotteries and sweepstakes can be domestic or foreign, with scammers reaching out over the phone, by email, even by fax.
3. Business and job opportunities scams
Total loss: $6.7 million
Median loss: $6,150
What is it? Job scams include fake business opportunities, work-at-home plans and invitations to take part in pyramid or multilevel marketing schemes.
4. Foreign money offers and counterfeit check scams
Total loss: $3.7 million
Median loss: $2,000
What is it? This is where of all those widows, princes and princesses who want to share their money with you come in. All they need from you, they say, is your bank account number and other personal information. This type of fraudulent scheme is designed to trick you into wiring money or giving fraudsters access to your bank account.
5. Telephone and mobile services scams
Total loss: $2.2 million
Median loss: $234
What is it? We spend so much time on our phones, it’s not surprising that fraudsters are now using them against us. Telephone and mobile service scamming includes unsolicited text messages linking to fake sales or inviting participation in other scams, as well as charges for rogue apps, “toll-free” calls or for calls you never made. After imposter scams (36,090 reports) this was the most-reported scam type (3,786 reports), according to the FTC’s 2018 data book.
6. Shop-at-home and catalog sales scams
Total loss: $2.1 million
Median loss: $154
What is it? We all indulge in retail therapy every now and then, ordering things online, over the phone or through the mail. Shop-at-home sales scams include undisclosed costs, failure to deliver on time and nondelivery.
7. Internet services scams
Total loss: $1.8 million
Median loss: $200
What is it? Internet service scams can take the shape of hidden charges for services and platforms, or obstacles as you try to cancel an online account or service that charges a recurring fee, like a social network, online game or other online services. This also includes malware that can be accidentally downloaded to your device or computer by clicking on pop-up windows and links in unsolicited messages, or downloading malicious apps.
For resources to help you deal with financial scams and to read more about the “Brains and Losses” series, continue here.
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