Katie BaileyEach year, crafty fraudsters find different ways – email, text, phone, and even in-person – to trick consumers out of money. Of the 2.6 million fraud reports, 38% indicated money was lost – in fact, a total of $12.8 billion according to the Federal Trade Commission (FTC).
These fraudsters are experts in disguise which is likely why imposter scams are on the rise. They take advantage of consumer trust and introduce the sense of urgency by posing as family members, loved ones, potential romances, financial institutions, law enforcement, among others looking for victims that willingly send money, click on links, or share sensitive information.
About 1 in 5 people targeted in an imposter scam lost money according to the FTC. Trending imposter scams include:
- Romance
- Government and law enforcement impersonation
- Tech support
- Investment
Most romance scams involve compelling backstories and full-fledged identities and then manipulate the victim into sending money. These are often the most difficult to convince members they are not real because they have been typically groomed by the scammers for quite a while.
Government impersonation scams often show up as a text message, most recently appearing to come from the DMV or local government. The message…unpaid tolls or vehicle registration has expired. Using intimidation and urgency, the consumer is coerced to click a link and pay the fee, so they won’t be fined or even possibly arrested. Of course, the link leads to a fake or spoofed website!
Another tactic has a phone call from a so-called government agency (e.g., FBI or secret service). They tell the member their credit union is under investigation, or an employee is a suspect under investigation, and their funds are not safe. Of course, the imposter instructs them to transfer their funds to a holding account controlled by the FBI, withdraw cash and deposit into a cryptocurrency ATM, or wire it to a “secure” account held by the FBI. The fraudsters stress the importance of not sharing information with anyone as it could compromise the investigation.
With tech support scams, a computer technician – supposedly from a computer, software or internet company—contacts the consumer. They tell the targeted individual about viruses or malware on their computer, and it is necessary to provide remote computer access to fix it. These scammers might sell useless services, steal card or account numbers or get access to a computer to install malware for additional fraud later.
Fraudulent investment schemes trick individuals into moving funds into fake cryptocurrency opportunities with false promises of high, guaranteed returns and little to no risk. Fraudsters often leverage social media and artificial intelligence (AI), to gain trust and steal funds, leaving victims with significant financial losses.
Another imposter scam that can negatively impact your reputation are where scammers impersonate one of your very own employees. The scammers report they’ve identified unusual transactions on the member’s account and may ask to verify if they authorized the transactions. When the member says no, they ask for confidential information to authenticate access. This allows the fraudsters to access their online account and conduct their own transactions.
And, as fraudsters get more sophisticated, they are implementing smarter technology like AI and deepfakes to make threats even more difficult to detect.
Help educate members to be on the lookout for red flags like:
- Unsolicited calls, emails, or texts from someone you don’t know or didn’t expect. Not everything that looks legitimate is.
- Demands for you to act immediately and discourages you from checking on their story or talking to a trusted person.
- Payments requested via untraceable methods like wire transfers, gift cards, cryptocurrency, or peer-to-peer payment apps.
- Requests for sensitive information. Legitimate organizations will not call, text, or email you unexpectedly to ask for Social Security numbers, account details, or passwords.
- Threats involving fines, arrest, legal action, or loss of benefits if you don’t comply immediately.
Of course, encourage your members to always report suspicious activity to the credit union as soon as possible.
With consumer fraud escalating, you should ensure all employees are trained on scams, know how to recognize them, and can recommend action steps to assist members. Don’t be fooled! Take the necessary steps to enhance your employees’ ability to be your first line of defense.
For additional insights or related risk resources, check out the TruStage Business Protection Resource Center.
