Better Business Bureau Releases 2019 Scam Data
Highest-Risk Scams in Minnesota are Online Based
A new report prepared by the Better Business Bureau is shedding light on how scams are being perpetuated, who is being targeted and the types of fraud that are having the most impact. While the study shows that the phone remains the top means of contact, scammers are also taking advantage of up-and-coming technologies including cryptocurrency to lure people in.
If you thought seniors are the most susceptible age group when it comes to scams, the report shows a much different trend. Driven largely by widespread, daily exposure to email, instant messaging, websites and social media—it’s actually the 18 to 24 age group who are falling victim to fraud at a higher rate.
In Minnesota, the highest risk scams are targeted at online purchases, while nationally, the riskiest scams are fraudulent employment offers.
Every day, a new opportunity
No matter how these fraudsters work their schemes, one thing is clear: They never seem to take a day off. Holidays, special events, tax season, Black Friday sales, emergencies—any situation is seen as an opportunity for fraud. E-commerce scams, employment scams, phony money orders—there’s no limit to how scammers can strike.
The methods and the means are numerous. Bad actors never pass up an opportunity to seize some of people’s most valuable assets, whether it’s their money, personal information or sensitive online data.
More than 37,000 scams were reported to the Better Business Bureau’s online Scam Tracker tool in 2019. The BBB used data collected from the Scam Tracker to compile their annual report, New Risks and Emerging Technologies.
When it comes to risk, the top five highest-risk scams are centered around employment, cryptocurrency, online purchasing, fake checks or money orders and advance fee loans. The BBB used three factors to measure risk: exposure, susceptibility and monetary loss. Here’s some background on the top five:
Let’s say you receive a job offer in your email. Not uncommon, especially if you’re job hunting or have a profile on LinkedIn, the popular social media site for professionals. The scam works this way: You receive a dazzling job offer that checks every item on your list—high pay, great benefits, flexible hours and the option to work remotely. There’s just one problem: The candidate is asked to complete forms that require personal or sensitive information, and might even be asked to purchase equipment, with part of the proceeds of what turns out to be a fake check.
You probably have heard of the digital currency Bitcoin. Here, cryptocurrency is purchased from, traded by or stored with a person or exchange site that turns out to be fraudulent. Digital assets are sometimes purchased as part of a bogus Initial Coin Offering, in which investors are scammed into paying money or trading digital assets for a company or product that never exists. The median dollar loss resulting from these scams is $3,000.
3. Online purchase
Shoppers beware. In this scam, a buyer makes a purchase from an e-commerce site or an individual seller, but their order never arrives. In other cases, someone sells an item online, only to receive a fake check for the item. The report finds that 81.2 percent of consumers reported losing money to online purchase scams.
4. Fake check/money order
These scams involve a fake check sent to a consumer containing an “accidental overpayment” or some kind of overage. The consumer is asked to wire back the excess money. The check is made to look real and reportedly “clears,” making the person think it’s safe to withdraw funds. When the bank discovers the check is phony, the consumer pays the withdrawn funds, in addition to fees and penalties.
5. Advance fee loan
Someone receives a “guaranteed” loan, but it comes with upfront charges which might include taxes and processing fees. When the fees are paid, the loan never is granted, leaving the person with large debts.
Who are the victims and what is the price?
If you’re wondering about the financial impacts of these scams, the report finds that, not only did the median dollar loss associated with scams tick upward in 2019 to $160, (up from $152 the previous year) the percent of reports that included a dollar loss also rose, from 29.5 percent in 2018 to 35.1 percent in 2019. That means customers are becoming more likely to lose money when exposed to a scam.
The report finds that susceptibility decreases with age, but in terms of monetary losses, the older age demographics reported a higher median loss. For the lowest age group, 18-24, the median loss was $100. For seniors 65 and older, scams cost them $350 on average.
The study indicates that the top form of payment requested by scammers were credit cards (37.8 percent), followed by online payment systems. Payments requested by prepaid card, wire transfer, check, cash and money order trended downward, compared with the previous year.
Consumers who are approached online (email, website, social media, internet messaging, and online classifieds) are significantly more likely to report losing money. If approached by phone or in person, they are less likely to report losing money.
As the scammer’s means of reaching people expands and their methods grow more advanced and harder to detect,, what remains steady is their motivation: to steal what’s most valuable to people—whether it’s a one-time cash grab or a scam designed to draw out someone’s savings over time.
The most troubling part is, con artists don’t care who falls for it—men, women, families, students, veterans and senior citizens. All groups are targets and all have the potential to be vulnerable. With the release of this report, it’s a good reminder that it’s never too late to educate yourself about the latest ways to protect yourself.
Here are three warning signs of online scams and three actions you can take if you’ve fallen victim.
What to watch for
1. Outrageous offers
Be suspicious of extreme low prices, savings offers, unusual promotions or sudden price drops. If you find a new laptop online for $150, question the offer. Compare the price for the same model on another site.
2. Shady e-commerce sites
An authentic professional website from a reputable company should be free of spelling errors and strange links and should openly advertise its contact information on a Contact page, including phone number, location and customer support. Don’t shop on a site if you can’t confirm it’s legitimate.
Site security is a major factor. Before you shop anywhere, verify the URL contains “https” in the address. The “s” stands for security, meaning all your communication on the site is encrypted.
What you can do
If you think you’ve been scammed. Here are three steps you can take.
1. Contact your financial institution
Your bank can put a hold on your debit card, checks or put a hold on your account, and credit card companies can freeze your card. Ask about fraud protection, a service that might cover charges made without your consent.
2. Monitor your statements
You might be able to receive alerts and notifications about suspicious purchases, or purchases made above a designated dollar amount. Review your statements and activity as often as possible.
3. File a police report
Though it’s difficult to track a scammer and get your money back, filing a report creates a record of the scam activity and could direct the authorities to investigate your case. It’s likely that your financial institution will receive a copy of the report as well. The faster you act, the better your chances of tracking down the scammer.
To download and read the full report, click here.