With 2.7 million phone frauds reported last year, there’s a good chance you’re the victim of a phone scam. Or perhaps you know someone hurt by one. Or you’ve read about phone scams and now you’re worried whenever an unfamiliar number shows up on your caller ID.
You should worry. Total losses to fraud comes in at $905 million a year. That averages out to a $429 loss per person. That’s what you’re looking at when you get roped into one of these scams.
And it’s very easy to get fooled by them. Surprisingly, an FTC report found that even the tech-savviest generation of Americans falls for phone scams at an alarming rate. Last year, nearly 40 percent of Americans aged 20–29 filed a fraud report. Consequently, it’s safe to assume no one is safe from phone scams.
So how exactly are scammers conning people out of their money? We’ll look at the leading phone scams of 2018, describe how they work, and explain how to avoid them. Hence, when the scammers come for you, you’ll know what to do.
This particularly phone scam starts out with a call or voicemail message that goes something like this:
“IRS internal revenue service is to inform you IRS is filling [sic] lawsuit against you due to tax evasion and IRS has strong evidence that you have failed to file your actual income tax which was higher than it was supposed to be. To get more information about this case file, call our department division number [spoofed phone number]. I repeat [spoofed phone number]. Now if we don’t hear from you, we have to issue arrest warrant under your name and get you arrested.”
Notice the poor grammar, the attempt to establish credibility by linking to an authority, and the aggressive and urgent tone. These are all hallmarks of a classic phone scam. The hope is that the possibility of trouble with the law will override your good sense. And it works well enough, netting scammers $54 million/year. They especially like to break this out in April, around tax season, when financial worries are at their peak.
The key to defusing this scam is to know that the IRS doesn’t call to demand immediate action or payment. They’ll mail you a bill first. And they’re not bringing law enforcement into the mix right from the start.
This is another phone scam where the scammer poses as an official from some institution. They could claim to be from your insurance (they like masquerading as Blue Cross Blue Shield for some reason), or even the IRS.
The call starts off innocently enough. All the caller wants to do is verify some information for their records. If you object, they get defensive and say they don’t want you to give them any information. They just need you to verify what they already have on record. Sounds reasonable, right?
But it’s not. First, these companies prefer automated means to verify information, like email. Phone calls cost more and require a human agent. It doesn’t make economic sense for the companies to operate that way.
Second, always be suspicious of any stranger calling up and asking for your personal information, even it’s just to “verify” it. That could be anyone in the world on the other end, even if the caller ID backs up what they say. It’s too easy to fake a caller ID or spoof a local number these days.
Third, be prepared for them to threaten or bully you if you don’t comply. If they sense any kind of uncertainty on your part, they’ll apply the pressure. You could lose your insurance. You could be arrested. Bullying is part of their business model. If they start issuing threats, take it as confirmation that this is definitely a scam.
They may lead with a question like, “Do you suffer from chronic back pain?” Again, this seems innocent enough, but it’s just to get you started. Then the questions get a little more personal, verifying sensitive information like your birth date or Social Security Number. In most cases, they already have the information on hand, so you assume they received it legitimately and there’s no harm in verifying it.
You’d be wrong.
The scammers are building an identity profile on you. Once they have enough information, they can use your identity to commit fraud. But they assemble that profile piece by piece, and they can’t be sure about the information they have until you verify it for them. So anything you say, even answering the phone, helps them build their profile. They know the number they have for you works, that you’ll answer it, and that makes it valuable for them to sell. Maybe you’ll slip and tell them this is your business number and not to call you there. That’s another piece of information they can use.
The way to slap down this phone scam is to never give out your personal information over the phone. Never verify it either. If you’re concerned that the caller has a legitimate need for it, then tell him or her that you’ll contact the company directly and verify the information. But never hand out that information to someone who called you out of the blue.
The caller may offer to give you a number where you can reach the company. Don’t trust anything they give you. They’re just directing you to another scammer.
Your phone rings and it’s someone claiming to be from Microsoft. They’re calling because your computer has a virus.
You’re overjoyed that a company would be so proactive, right? Unfortunately, companies aren’t monitoring customers’ computers and then offering to help when there’s a virus. But the scammer is betting the threat of a virus on a computer will lead you to overlook the obvious lie.
Usually these scammers will try to prove you have a virus by having you open an event log viewer file. You’ll notice several logged errors, and the scammer will explain they’re a sign that you have a virus. To get rid of it, the scammer will ask you to navigate to a website and grant him or her remote access to your computer.
This is the king of all red flags. Never give them access. If you do, they’ll go to town, downloading malware onto your computer. And after they infect your computer, they’ll add insult to injury by trying to charge you for the “service.”
This phone scam typically targets the elderly. Sometimes the scammers pose as police officers of a foreign country. They’ll inform you that your grandchild was traveling abroad and has somehow wound up in prison. They’re calling you to offer to make this all go away. They’ll release your grandchild—but only if you can cough up enough cash to cover bail, legal expenses, or a bribe.
Some particularly brazen scammers may even try to pose as one of your grandkids, claiming they’re in trouble. They’re in trouble and don’t want their parents to know. Could you wire them money? They may even invite you to talk to a lawyer involved to provide their claim with some added authority.
For scams like these, always seek verification outside the phone call. Call the grand kid’s parents and see if the kid is traveling. Hang up and try to call the kid’s number yourself.
This scam is especially convincing because the scammers will rattle off details you wouldn’t think are readily available. Details like your grand kid’s name and age, where he or she lives or might be traveling. But bear in mind, these are details scammers can buy, or even glean off social media. So never just trust someone on the phone, even if they might sound like a relative.
Phone scammers call and claim they’re with local law enforcement. They’ll inform you that you missed a jury summons, and now you’re in serious legal trouble. There’s a fine you have to pay to stay out of jail. Naturally, the officer or deputy will try to convince you to pay right there, on the phone, with a credit card.
Needless to say, law enforcement doesn’t work this way. Most officers, if they have to deal with a summons, are more liable to knock on your door than call you. They also aren’t going to demand payment right then and there. If you do owe a fine, they’ll ask you to come down to the station to pay. And they won’t care how you pay. Scammers, on the other hand, care very much because they want your credit card information.
This is when scammers call posing as a utility company. They’ll claim you fell behind on your monthly payments. Without an immediate payment right there, on the phone, they’ll shut off your power, gas, water, etc.
Of course, that’s not how utility companies operate. They’ll show an unpaid balance on your next bill—which is much easier than getting someone to call you. And like law enforcement, they won’t demand on-the-spot payment. That’s why it’s so important that you never let the caller bully you into paying. Take some time to think, do some online research, contact your provider, and you’ll conclude it’s a scam.
According to a Better Business Bureau report, this was the scam of 2017, with over 10,000 reported instances. However, the Bureau was unable to find a single reported instance where someone lost money because of it. Even so, there’s no knowing how these scams will play out. So it’s better to simply avoid them.
For this phone scam, someone calls and simply asks, “Can you hear me?” The goal is to record you saying, “Yes,” so they can use your voice to authorize purchases.
The way to handle this scam is to approach what you say on the phone the same way you would an email or a social media post. Carefully vet what you say, and imagine someone recording and preserving for it later. How will it sound out of context?
Another tactic is to always respond to queries with a question. Like: “Who is this?” or “What’s this about?”
Or better yet, hang up.
So what do you do about phone scammers? How can you fight back?
Some people, when they get a scammer on the phone, play dumb. They drag out the session, making lots of mistakes, all in an attempt to frustrate the scammers and and waste their time. Unfortunately, this doesn’t stop scammers in the long run, and it’s a huge waste of your time. The scammer is still taking something from you.
Other people prefer to confront the scammers directly. They yell at them, telling them that they’re scum. This is also a waste of time because you’re not going to hurt the scammers’ feelings. They’re thieves, bullies, and criminals. You’re not going to shame them or stop them that way. And don’t forget, responding to them only allows them to gather more information about you. They still win.
The best response to phone scams? Hang up. Or don’t answer at all. Let that call from an unfamiliar number go to voicemail. Block the number, and sign up for the Do Not Call registry. If the call is from someone you do know, or if it’s about something important, the caller will leave a voicemail. Don’t give the scammers anything. That way, they come away empty-handed. That’s hitting them where it hurts.
If you still want to do more to fight back, you can always report phone scams to the Better Business Bureau (bbb.org/scamtracker). You can also file a complaint with the FTC (report online at the link or call 1-877-382-4357)—or, for IRS scams, report them here or call 1-800-366-4484.
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