Scams are multiplying. Losses have surged. Consumers feel attacked from many directions by people who want to snatch their wallets. So, what’s a consumer to do? Some folks are fighting back and succeeding in shutting these con artists. The number one tool in a Scam Buster’s bag is to follow the money and turn off that tap.
Scammers raked in an estimated $3.3 billion in 2020. That’s nearly double the number in 2019. The pandemic opened a Pandora’s Box of new possibilities, but, at their core, scams all feed on the same essential elements. Crooks play on your fears or rely on human greed. Your grandson is in jail and needs cash. You won a prize! You owe money to a business you frequented decades ago. Stop and consider the odds that the phone caller is legit. If you don’t, statistics predict you’ll be poorer by the time that scammer hangs up.
First Steps Are Critical
It’s normal to panic—especially if someone’s threatening you with an arrest, a freeze on a bank account, utility disconnection or a foreclosure. Panic happens, but you can’t allow it to cloud your mind. Breathe. Think twice before you rush out to buy prepaid debit cards at a stranger’s direction. It’s the #1 warning indicator that you’re talking to a crook.
Scammers love new targets. A report released in February 2021 noted that the risk heightened for two groups of consumers in 2021. Those categories are young people age 18 to 24 and folks over 65. Crimes against the more youthful group have surged to the top of the list.
Lack of experience in financial matters makes students and other 20-somethings desirable targets. Crooks will even seek to compromise or buy data that could exploit this particular group.
Swindlers target American elders because they often live alone, have more significant assets, and might be easy to confuse with fear-riddled fast talk.
Call the Good Guys
Sometimes, outrageous scams really do get shut down; no case demonstrates what’s possible better than the settlement between Western Union and the Federal Trade Commission (FTC), which created a $153 million fund for consumer refunds.
“Western Union turned a blind eye to the fraudulent payments made through its money transfer system,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, in September 2020. “We’re glad to be returning money to those consumers who were ripped off by fraudsters exploiting the Western Union system, and we will not tolerate Western Union or other payment companies facilitating fraud.”
This coup was not the agency’s first refund success. In 2009, FTC settled a complaint against J.K. Publications and associates after consumers griped about online entertainment services they didn’t order appearing on debit or credit cards. The fourth round of refund checks involving that case will hit the mail shortly. Repayments started flowing back in 2009, and the government will dish out the remaining balance later this year.
Last summer, a Russian man pled guilty to attempted bribery. He offered a $1 million payment to a Tesla employee to physically plant malware that would disable the electric car company’s Nevada battery plant and steal other company secrets. The FBI responded rapidly, catching the man right before his flight out of town. The thief entered a plea agreement that may keep him in jail for ten months.
The Road Ahead
There is literally nowhere you can hide to escape scammers unless you live entirely off the grid. The U.S. government went to court in March 2021 to stop a company that FTC alleged had scammed prison inmates and their families.
“The complaint alleges that in many cases the magazines never arrived or were delivered far later than promised, with no notification to the consumers about delayed shipment or the chance to cancel their orders as required by the FTC’s Mail, Internet, or Telephone Order Merchandise Rule,” the agency stated after the court ruling.
The court approved the freeze, and the agency now has to prove its case. Then, FTC could attempt to claw back some of the payments if all the cash isn’t spent.
Up next, the FTC plans to distribute checks to victims in a situation similar to the Western Union case. The feds alleged that scammers used the MoneyGram service to collect their ill-gotten gains. A large pool of victims could soon receive checks from a $125 million fund the government secured. The settlement covers money lost to numerous scams between January 1, 2013, and December 31, 2017.
Consumers who’ve already filed a complaint with the FTC, MoneyGram or another law enforcement should receive a mailed claim form. It will indicate the amount lost. If you disagree with that figure, send in proof. Everyone else impacted will need to wait until June 1, 2021, when a claim center will open. File those forms within 90 days to claim your share.
Let’s Defeat Scammers
Even these happy endings won’t satisfy every victim. The federal government mails your check—unless you owe the feds money. If you have income taxes due or other liabilities, the amount in this instance could be all, none or just part of what you lost. The total volume of claims received figures into those determinations.
Be alert. Scammers will use the MoneyGram refunds to unleash a wave of additional scams, too, as they did with Western Union checks.
“You don’t have to pay to file your claim,” the FTC said. “You don’t need a lawyer to file a claim. Don’t pay anyone who contacts you and says they’ll help you file, or help you get your money back.”
We each possess some clout if we want to help these agencies slam scammers. Report scams you witness or lost funds to the FTC at their unique website for such instances–ReportFraud.ftc.gov. Since July 2018, the agency has facilitated $11.3 billion in refunds in a total of 90 cases.
IDShield can track your emails, phone numbers, and other private info then alert you to data compromises. That’s all con artists seek to give their scams an appearance of credibility.
IDShield is a product of Pre-Paid Legal Services, Inc. d/b/a LegalShield (“LegalShield”). LegalShield provides access to identity theft protection and restoration services. For complete terms, coverage, and conditions, please see an identity theft plan. All Licensed Private Investigators are licensed in the state of Oklahoma. This is meant to provide general information and is not intended to provide legal advice, render an opinion, or provide any specific recommendations.