Protecting Your Identity

In this digital age, scams are a dime a dozen. Angry phone calls from the IRS, threatening emails from the FBI, and thousands of similar frauds resulted in over $15 billion being stolen from 13.1 million Americans in 2015 alone. Gone are the days of the Nigerian prince emailing you in broken English that he just needs your banking info to wire you millions of dollars. Today’s scams are well-crafted, believable, and prey on the fear and sentiment of their victims. The real problem, however, is that these scams are like a virus. They multiply and evolve quicker than the authorities can track them, resulting in millions of preventable identity thefts simply slipping through the cracks. Considering how many of these scams are out there, over the phone and online, fighting them may seem like a losing battle. Thankfully, by educating yourself and your loved ones, you can prevent yourselves from falling victim to many of these frauds.

While there are more variations of even the basic scams than authorities could ever hope to track, many of them adhere to similar themes. By recognizing the following basic types of scams, you will be better equipped to recognize their variations.

Grandparent Scam

In this situation, an elderly person will receive a call from someone claiming to be a friend or relative in need of money. This “grandchild” may have just gotten into a car crash, or have a flat tire in a bad neighborhood, or may even claim to be in a foreign jail in need of bail. They ask the grandparent to send them some money right away and, not wanting to let down their grandchild, the grandparent obliges.

How to Avoid this: If you or a loved one receives a call like this, it is likely that the scammer will stress the need to send money immediately. They may also beg you to not to contact their parents, as they would be furious to hear they are in trouble. The best way to avoid this scam is to contact the parents anyway, and see if the story holds any water. The vast majority of the time, the parents will be able to confirm the call was a scam. (“What are you talking about? John isn’t in Mexico, I just saw him!)

IRS/FBI Phone Call

This type of fraud is quickly becoming one of the most popular, and likely the most successful. This scam occurs when a victim receives a call from an unfamiliar number, but the Caller ID says “FBI” or “IRS”. Confused as to why the federal government is calling them, they pick up, only to be told that they owe thousands of dollars to the government. If the Caller ID says FBI, the money is for an old warrant that they have apparently been dodging for months. If the “IRS” is calling, they owe a massive penalty on a prior year’s tax return. The victim is kept on the defensive for the entirety of the call, as the scammer makes credible-sounding threats to arrest the victim or their family. Then, once the victim is thoroughly frightened, the “government official” offers a way out. For a warrant cancellation fee of a few thousand dollars, or by paying the tax penalty owed, they can make the whole situation go away. It seems odd that they want the money wired to a PayPal account via a prepaid card, but because they are on the defensive, and because the caller ID lent credibility to the scam, the victim doesn’t question it.

How to Avoid this: The most important point to remember is that the IRS or FBI will never call you demanding payment. Even if you did owe an outrageous amount in tax penalties, the IRS wouldn’t contact you by phone. Similarly, it is highly unlikely that the FBI would ever call about a warrant, and they certainly wouldn’t ask for a cancellation payment. Beyond that, it’s useful to remember that a Caller ID can be spoofed fairly easily. Scammers can buy entire strings of phone numbers from VoIP services like magicJack, and program their ID to read any way they want.

Sweepstakes Scam

This is a fairly old scam, but is still very prevalent today. Known colloquially as the “Jamaican lottery scam”, this scam is thought to be solely responsible for $300 million in theft per year. To start, a (likely senior) citizen will receive a call claiming that they have won the Jamaican lottery, or a new car, or some other form of sweepstake. Even if the victim protests that they never entered such a lottery, the scammer will claim that someone must have entered on their behalf. To claim their prize, the victim only has to send a few hundred dollars by prepaid credit card, in order to cover processing fees or taxes. Once the money is received, the scammers will only demand more and more money.

A variant of the FBI Phone Call may also occur alongside this scam. If a would-be victim vehemently refuses to send money, and declares that they believe the sweepstake to be a scam, the initial scammer will stop calling. Then, a few days later, the victim will receive a call from someone claiming to be from the FBI or Homeland Security. The “government official” will claim that they are investigating the phony sweepstake, and need personal or banking information in order to file a report. In reality, of course, it is merely an associate of the original scammer on the line.

How to Avoid this: As with other scams over the phone, the simplest way to avoid falling victim to these Jamaican scammers is to refuse to send anyone money by wire transfer or prepaid credit card. These operations can be quite extensive, even including professional-grade websites about the sweepstakes. No matter how alluring the payoff may be, keep in mind that nobody is actually giving away money for free.

Sweetheart Scam

This is another scam that typically targets men and women over the age of 60, and has been described as “breaking a victim’s heart as well as their bank”. In this situation, someone claiming to be a young man or woman will contact an elderly victim. They chat about little things and, over the course of days or weeks, begin to develop a romantic relationship. After a while, they say that they want to come visit the victim in person. Sometimes, the victim may even suggest a visit themselves. Tragically, the scammer is in some sort of money trouble, and won’t be able to visit until they have paid of their debts. The victim, in the throes of new love, offers to pay if it will let them meet in person. The scammer agrees, and is never heard from again once the money is sent.

How to Avoid this: The fundamental flaw of this scam is that the scammer probably isn’t actually a thirty-year old Brazilian supermodel. Oftentimes, a cursory Google search will prove that your new online lover doesn’t actually exist, or that the pictures they have been sending are the top search result for “Attractive Young Brazilian”. It can also help to think critically about how realistic the circumstances that led to your meeting were, or to tell your family about your new partner. Family will often be much more critical about a new contact than the love-struck victim. And, when all else fails, follow the golden rule: Don’t wire money to someone you have never met in real life.

If the worst still happens, and you believe you may be the victim of identity theft, take the following actions:

1. Place a fraud alert on your credit report, cancel your credit card (if necessary), and get copies of your credit report.
2. Report identity theft to the FTC.
3. File a report with your local police department. A local department may be hesitant to take such a case, but they are legally obligated to and may be crucial in getting it to the appropriate authorities.
4. Visit IdentityTheft.gov to determine if any further actions should be taken.

Comments

  1. Sophie Ryan says

    You’re right. Scamming, particularly phone scamming is becoming rampant. Thanks for posting an informative article like this. The best way to do is to ignore these suspicious phone calls and report it to the police. It is also helpful to do a search in websites like http://callercenter.com/ and check if the phone number has been reported for scam.

    • That’s very true, Sophie. These scammers will often use the same phone number for dozens of victims, and sites like that can be useful to see if anyone else has flagged them before. Thank you for your insight!

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