Imposter Scams on the Rise

For the first time, the Federal Trade Commission’s (FTC’s) Consumer Sentinel Network Data Book, 2018 has identified imposter scams as the top consumer fraud complaint received in 2018. The driving factor beyond the growth of imposter scams is an increase in fraudsters falsely claiming to be from a government agency, such as the Internal Revenue Service or Social Security Administration.

In all, the FTC received nearly three million complaints from consumers in 2018. Consumers reported losing nearly $1.48 billion to fraud in 2018 — 38% more than the year before. Consumers reported losing a total of nearly $488 million to all types of imposter scams in 2018 — more than any other type of fraud — and reported a median loss of $500. The FTC also found that Florida had more fraudulent claims than any other state.

“Florida is densely packed with potentially high-value fraud targets,” explains Jim Quiggle, director of communications for the Coalition Against Insurance Fraud. “It has a large population of retirees. Their age, seeming vulnerability and built-up financial assets attract con artists who perceive the seniors as easy marks for insurance and other schemes. Florida also has millions of new immigrants who need incomes. Most are honest, though some are recruited into health scams, staged crashes and other cons.”

Government imposter scams made up nearly half of the 535,417 imposter scam reports to the FTC in 2018. A typical government imposter scam involves fraudsters who falsely claimed to be from the Social Security Administration. These scammers typically tell people their Social Security number has been suspended, or that there is some other problem in an effort to get them to reveal their Social Security number or pay money to “reactivate” it. In reality, Social Security numbers are never suspended and the Social Security Administration will never require a person to pay to obtain one.

“Imposter scams are so popular because they can steal devastatingly large amounts of money from trusting consumers in a short time,” adds Quiggle. “It’s relatively easy to spoof Medicare, the IRS, tech support or others — at high volume and low cost. Imposter scams can intimidate and frighten people into paying up. Seemingly real demands for money by urgent-sounding phone calls or emails can insist a consumer take fast action or face serious consequences.”

The FTC produces the Consumer Sentinel Network Data Book annually using reports received by the Consumer Sentinel Network. These include reports made directly by consumers to the FTC, as well as reports received by state and federal law enforcement agencies, national consumer protection organizations, and nongovernmental organizations.