How to fight rising imposter scams

Of the millions of scam reports the Federal Trade Commission gets each year — 2.6 million in 2023 — the most common type by far are imposter scams, where scammers impersonate an entity, usually a business or government agency.

The first half of 2024 alone saw 360,000 impersonation scam reports, with $1.3 billion in reported losses and a median loss of $800.

Less than 5 percent of scam victims report at all, according to FTC and Better Business Bureau estimates.

“This is just the tip of the iceberg,” said Emma Fletcher, senior data researcher at the FTC at a Friday, September 20 Ethnic Media Services briefing about imposter scams. “Behind those numbers are people who’ve lost tens and hundreds of thousands of dollars. We’re really concerned about the volume of reports we’re getting on scams that take it all. People have emptied their bank accounts, even their retirement accounts.”

Over the past few years, reported losses to business and government impersonation scams have skyrocketed nearly fourfold.

$175 million was lost to government impersonators in 2020 compared to $618 million in 2023, and $195 million was lost to business impersonators in 2020 compared to $751 million in 2023.

Scam tactics and stories

“This tremendous increase in reports from people who’ve lost enormous sums of money is tied to very concerning changes in the tactics these scammers are using,” said Fletcher.

These scams often involve bank transfer methods like Zelle, or cryptocurrency payment methods like Bitcoin ATMs, which are referred to by many scammers as “federal safety lockers.”

Kati Daffan, assistant director, Division of Marketing Practices at the Federal Trade Commission, Washington, District of Columbia, explains why it is so difficult to trace money after a fraudulent transaction.

One reporter attending the briefing, Sunita Sohrabji, shared a personal example.

“My daughter tried to sell her bike via Facebook Marketplace,” Sohrabji said. “It was her first time selling anything, and someone messaged her saying they wanted to buy the bike, and that they’d pay through Zelle, but that she first had to establish a Zelle business account and put $400 in an account they’d sent her, which would be refunded once the transaction was made. Of course, that never happened.”

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“With the endless daily time-sensitive messages, emails, deliveries, due dates and service invoices we already get, especially in the media, there are so many you have to resist and double-check nowadays,” added Elena Kuznetsova, a reporter for Slavic Sacramento.”

“There have been congressional hearings about Zelle and the role of financial institutions when fraud occurs,” said Kati Daffan, assistant director of the FTC Division of Marketing Practices. “It’s an open question right now. We encourage people to report it to us and their bank. If they’re unhappy with how their bank handles it, they can also file a report with the Consumer Financial Protection Bureau.”

Per a new FTC Impersonation Rule in effect since April, pretending to represent or be endorsed by a government or business is explicitly a violation, enabling the FTC to file federal court cases seeking to return money to victims and enact civil penalties against scammers.

Kati Daffan, assistant director, Division of Marketing Practices at the Federal Trade Commission, Washington, District of Columbia, shares tips on recognizing fraud, including identifying the lines only scammers use.

“In our first case using the new rule, somebody pretending to be affiliated with the U.S. Department of Education would tell people: ‘This is a time sensitive notice, and you can get tax-free loan forgiveness,’ to entice consumers to call them,” said Daffan.

“Then the telemarketers, claiming to be affiliated with the government, would convince people to sign up for a debt relief program and collect hundreds of dollars in illegal upfront fees,” she continued. “Our case is ongoing.”

Daffan added that telltale signs of a scammer include urging the victim to act immediately; asking them to lie to someone, like a bank teller or broker; threatening them with arrest or deportation; and telling them not to hang up before money is withdrawn or transferred.

Also trending are “tag-team” scams blurring the line between business and government impersonation.

“These scams typically start out impersonating a business; say, your bank saying there’s suspicious charges on your account,” said Fletcher. “But when you respond, the situation escalates rapidly. Your accounts are at risk, so they connect you with a government agency. The aim is to create a sense of heightened alarm, to make it difficult to think clearly, recognize the scam, and hang up the phone.”

Emma Fletcher, senior data researcher, Federal Trade Commission, Washington DC-Baltimore Area, gives an overview of impersonation scams, which have led to a reported 1.3 billion dollars in losses.

Furthermore, many scams now involve victims who believe they’re protecting their money from entities who want it.

“If you believe you’re paying someone, you’re going to be cautious about giving all you have. But if you believe you’re protecting your money, you’re more likely to empty your account, and these scammers will position themselves as someone informing you of this problem and helping you resolve it,” Fletcher continued. “They’re not necessarily posing as the aggressor anymore.”

There are many misconceptions about who’s impacted by scams,” she added. “They’re not, say, less intelligent or greedy. It’s really important to put those ideas to rest, because they’re barriers to people being receptive to messages about how to avoid scams … It’s people of all ages, people you know in your community.”

The FTC found in 2021 that adults aged 18 to 59 were 34% more likely to report losing money to fraud than older adults, with a median loss of $500.

However, older adults reported much higher median losses: $800 for those in their 70s, and $1,500 for those 80 and over.

Kati Daffan, assistant director, Division of Marketing Practices at the Federal Trade Commission, Washington, District of Columbia, shares details on a recent student loan forgiveness scam.

“I’m always telling my audience: please be aware. Don’t do this. I’m 69 with 43 years of experience in journalism, and I fell in their hands completely,” said Celina Rodríguez, a journalist who got a call two years ago from scammers impersonating Bank of America.

“They said I bought an iPhone, and was it really me? It was so embarrassing having to explain ‘No,’” she said. “I was in a rush, I had to do a radio program, and I was panicking. I let them into my computer and sent money to them … Fortunately, Bank of America helped me shut my computer down, had IT come turn it on in a safe way and I changed my passwords.”

“The way they get you involved is amazing,” Rodriguez added. “We’re so vulnerable now. Even though we’re on top of things every day, we are human beings and any of us can become psychological targets.”

Those experiencing fraud can report it and find next steps at reportfraud.ftc.gov.