World & U.S. News

$8.8B Lost from Fraud in 2022 – Don’t Get Hoodwinked in 2023

The genesis behind this story is one of a close relative, recently a fraud victim. Not the kind of self-induced fear of missing out fraud from buying crypto altcoins from pyramid scamming businesses, but good old-fashioned over-the-phone telephone fraud.

It often begins with an email. “Please contact customer support immediately. Your computer has a virus, and if not corrected by the end of business today, your accounts will be frozen.” Something dramatic and eye-catching like that. That’s what crossed the eye of my Uncle several months ago.

Rather than contacting friends or family who might have some insight into fixing the computer glitch (spoiler alert: there was no glitch), he called the bogus 800 number that purported to be Microsoft customer support. You’re beginning to realize this isn’t going to end well. The call with customer support went well.

Well, that is, for the Indian-speaking gentleman on the other end of the line. +

One only can guess what third world trap this call went to. The long and the short of it was that the Indian speaking gentleman could fix the problem and avoid major catastrophe if my uncle would simply let him access his computer remotely to fix the bug. Seemed harmless enough.

As you might surmise, my Uncle gave him access, let him ostensibly fix the issue, and life went on. That is, with my Uncle realized several days later his bank account had been hacked for some $5,000.

The moral of the story, contact a friend or family and get a second opinion before you pull the trigger on something like this

The foretold story is not an isolated incident but one that occurred millions of times in the U.S. last year and took consumers for $8.8 billion in fraud and corruption. In this regard as well, the adage isn’t the older, the wiser, as you can see by the following data.

According to AARP, of the 2.4 million scam reports submitted last year, impostor scams were most common, followed by online shopping scams, scams involving prizes, sweepstakes and lotteries, investment scams, and business and job opportunity scams (the “Fraudulent Five,” as the FTC puts it).

But it’s not just the baby boomers and beyond who are getting fleeced. It could be just about anyone in the modern era of data and technology. With digital wallets and auto-fill, it’s never been easier to automatically share your financial information with a new website or platform.

No doubt you’ve seen the myriad of commercials for identity theft protection. Last year, over 1.1 million reports of identity theft were received through the FTC’s website.

While you might be able to recover financial losses through protections offered by your financial institution, protecting your personal and financial information once it’s fallen into the wrong hands can be challenging.

According to Stu Bradley, senior vice president of fraud and security intelligence at software company SAS, “An identity thief can use stolen information to apply for credit in your name, and the hard inquiries that result from those applications alone can negatively impact your credit scores.

Once the fraudster has successfully opened an account, the spending spree begins.” Other FTC-reported incidents included:

  • Individual victims within the military of all ages also continue to report losing more money than their civilian counterparts, with a median loss of $765 in 2022, compared with $650 among the general population.
  • Texts were the most common contact method criminals used for scams (22 percent), followed by phone calls (20 percent) and emails (19 percent).
  • There were almost 40,000 reports of romance scams in 2022, with a total loss of $546 million. Wow. Love hurts.
  • Among those who reported losing money to a scam, the biggest losses were through bank transfers ($1.5 billion) and cryptocurrency ($1.4 billion).

Another threat to add to the list is the metamorphosis of AI and its current and future nefarious uses. A WSJ reporter recently used AI to create a voice and speech recognition pattern that she found was realistic enough to access her bank account and fool her friends and family.

She used a short phrase to create a message she left for her father, asking him for the last four digits of his social security number. The father wasn’t fooled but was amazed at how realistic the created voice sounded.

So how can one protect themselves against the future onslaught of AI fraud, as well as the basic forms of corruption mentioned? While these may sound obvious and simple, keep them in the back of your mind.

  • Don’t click on any suspicious links, email attachments, or downloads. Don’t interact with any of these phishing attempts.
  • Enable multi-factor authentication (MFA) on all of your accounts. This setting requires a user to provide more than one password or form of verification in order to log into your financial or personal accounts.
  • Monitor your accountsIt is recommended to log into your financial accounts daily through online banking or a mobile banking app that lets you monitor your balances and account activity.
  • Be sure to research companies, businesses, and charities before making purchases or donating.
  • Ignore spam calls. If you don’t recognize a number and aren’t expecting a phone call, you might want to avoid taking it.
  • Watch out for strange payment methods. If you receive a message about a missed or late payment that requires you to pay through a gift card, money order, or wire transfer, you’re likely dealing with a scammer. This one almost caught my Ivy League son.

Being a victim of fraud can not only wreak havoc on your finances in the short term, but scammers are capable of causing damage that can take years to recover from. Knowing the key warning signs and common strategies used by fraudsters can help you avoid becoming the victim of a scam.

World & U.S. News