Can the FTC Stop the Scammers Coming for Your Money?

Financial frauds affect every single American to some degree, touching all of our lives.

And emptying our wallets. Collectively, Americans lost more than $10 billion from scams in 2023, according to a recent Federal Trade Commission (FTC) press release.

As a percentage of fraud, impersonation scams are increasing, says a new FTC alert released in April. Impersonation scams represent nearly half of all the FTC’s fraud cases in number.

The scams themselves are also evolving, says the FTC. Criminals are initiating cons via text, emails, and even social media instead of more traditional phone and in-person methods, according to the FTC’s latest analysis.

Examples of Scams

Impersonation scams fall into the following five categories, according to the FTC’s alert:

1. Copycat account security alerts
2. Phony subscription renewals
3. Fake giveaways, discounts, or unclaimed money
4. Bogus legal problems
5. Made-up package delivery problems

In impersonation scams, criminals impersonate a legitimate entity with which a consumer may or may not have business. The scammers cajole, threaten, or lure victims into their scams using everything from legal threats to promises of free money.

These threats and promises excite their targets’ emotional state, making them more likely to fall for scams, according to the FTC. When told by a scammer that personal financial information has been compromised, people may become so anxious about their money, that they paradoxically are more susceptible to scams that promise to protect or recover it.

That susceptibility may lead to a loss of critical thinking, making it more likely that people give up personal information to scammers. Instead of acting to protect their accounts, they end up compromising them.

Older Population Vulnerable to Scamming

While many scammers pose as employees of companies like Best Buy or Amazon, others pretend to be affiliated with government agencies.

A recent study by the National Institute of Aging revealed that 16.4% of older adults were not skeptical when contacted by a fictitious government agency demanding social security information, and 12% of those contacted provided sensitive data to the purported government agents.

Impersonation scammers are also increasingly likely to use hybrid scams in which they represent both private and public organizations. The FTC provided an example of this as being “a fake Amazon employee might transfer you to a fake bank or even a fake FBI or FTC employee for fake help.”

Latest FTC Efforts

Law enforcement agencies such as the FBI have long been instrumental in interdiction attempts against scam networks, but the FTC is focusing on using laws and procedures to bolster law enforcement efforts.

The latest efforts by the FTC include cracking down on illegal telemarketing, codifing new rules banning impersonator fraud, and working to stop emerging forms of fraud involving AI-cloned voices. They are even suing major companies for using tactics like spamming and misleading consumers, according to a February report.

Well-known companies the FTC has sued recently include Publishers Clearing House and Experian.

Publishers Clearing House, a sweepstakes giveaway company, was ordered to pay $18.5 million dollars and change deceptive business practices, according to a 2023 court filing posted on the official FTC site.

Expedia, a credit-reporting agency, was fined $650,000 by the FTC for not allowing email recipients to opt out of communications, among other violations of national laws designed to protect consumers from deceptive and harassing practices.

Report Fraud

If you fall victim to a scam or someone tries to defraud it, the FTC wants you to report it to them. You can do so at their Fraud Reporting Site.

The FTC notes on the page that while they can’t resolve individual reports, they will use the information to combat schemers nationwide in conjunction with 2,800 law enforcement partners.