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Impersonation Scams Cost Americans $1.1 Billion in 2023: FTC

These scams often blur the line between business and government impersonation
Cover Image Source: Unsplash | Photo by Markus Spiske
Cover Image Source: Unsplash | Photo by Markus Spiske

Impersonation scams in the United States reached unprecedented levels in 2023, surpassing $1.1 billion in losses, according to data released by the Federal Trade Commission (FTC). This staggering figure marks a threefold increase from 2020 and highlights the growing threat of fraudulent schemes targeting unsuspecting Americans. The FTC's report, compiled from 490,000 reported scams in 2023, reveals a concerning trend in the proliferation of impersonation scams, with 330,000 complaints related to business impersonation and the remainder attributed to government impersonation incidents.

Lina Khan, Chairperson of the Federal Trade Commission, speaks onstage during The New York Times Dealbook Summit 2023 | Getty Images | Photo by  Slaven Vlasic
Lina Khan, Chairperson of the FTC | Getty Images | Photo by Slaven Vlasic

The majority of these scams were initiated through phone calls, a method that has seen a decline in recent years, while email and text message scams have surged for the third consecutive year. This shift in tactics reflects scammers' evolving strategies to exploit unsuspecting victims through digital communication channels.

According to the FTC, these scams often blur the line between business and government impersonation, with many fraudsters impersonating multiple organizations within a single scam. For example, a fake Amazon employee might redirect victims to a fake bank or even impersonate law enforcement agencies like the FBI or FTC.

Impersonation scams reported to the FTC encompass a variety of deceptive tactics, with several prevalent schemes standing out among the rest. One common type involves Copycat.

Account Security Alerts, where scammers send fake notifications claiming unauthorized account activity. These alerts trick victims into believing their accounts are compromised, prompting them to transfer funds for protection, only to fall victim to the scam.

Another prevalent scam is Phony Subscription Renewals, wherein fraudulent emails falsely assert that a subscription is renewing. Victims are lured into a refund scam, where they are instructed to return over-refunded amounts via gift cards. This manipulation of trust exploits individuals' desire to resolve seemingly legitimate financial matters, leading them to unwittingly transfer funds to scammers.

Pexels | Photo by Mikhail Nilov
Pexels | Photo by Mikhail Nilov

Fake giveaways, discounts, or money-to-claim scams prey on consumers' desire for savings and rewards from reputable brands. Scammers offer bogus discounts or giveaways, convincing victims to purchase gift cards or send money to claim non-existent offers. These deceptive tactics exploit individuals' susceptibility to enticing offers, resulting in financial losses and disappointment.

Impersonators also exploit fears and vulnerabilities through bogus problems with the Law scams. Victims receive false claims from impersonators alleging their involvement in criminal activities, coercing them to move money or purchase gift cards to resolve fictitious legal issues. This manipulation of fear and urgency compels victims to comply with demands, further perpetuating the scam.

Additionally, Made-up Package Delivery Problems scams involve fraudulent messages from carriers regarding delivery issues. These messages aim to steal credit card information or account details under the guise of resolving a delivery problem. Victims are deceived into providing sensitive information, believing they are addressing legitimate concerns related to their deliveries.

To protect against these scams, the FTC advises consumers to avoid clicking on URLs from unsolicited communications, distrust requests for money transfers, and take the time to verify suspicious messages. Additionally, the agency emphasizes the importance of seeking information from trusted sources and contacting companies directly using verified contact information.

In response to the escalating threat of impersonation scams, the FTC announced the implementation of new measures to combat fraud and hold scammers accountable. These measures include enhanced capabilities for pursuing scammers in federal courts for civil penalties and restitution. Under the new rules, the FTC will have the authority to seek monetary relief from those scammers using forged government seals and business logos, spoofing government and business email and web addresses, and falsely implying affiliation with legitimate entities.