Scammers, your ways are numbered

How many reports did the Consumer Sentinel Network receive in 2020? What percentage of those related to fraud? And what was the most common scam that people reported? The answers: 4.7 million, 46%, and imposter scams.

The FTC just released the annual Consumer Sentinel Network Data Book and it’s filled with charts, graphs, and state-by-state numbers about those whom consumers say didn’t play it by the numbers in 2020. In addition to statistics about questionable practices reported by consumers, the Data Book sounds some sobering alarms about scams targeting businesses.

First, here are some things consumers reported in 2020 to the Consumer Sentinel Network – a database of reports to the FTC, other agencies, industry organizations, and nonprofit groups available only to law enforcers. Behind imposter scams, online shopping was the second-most reported fraud category, no doubt elevated by the surge of reports in the early days of the coronavirus pandemic. Consumers reported losing more than $3.3 billion to fraud in 2020, up from $1.8 billion in 2019.

In addition, there were nearly 1.4 million reports of identity theft received through the FTC’s IdentityTheft.gov website, about twice as many as in 2019. The 2020 Data Book also includes interesting observations about the age groups most likely to report fraud, the average dollar amounts that consumers report losing, and the states with the highest per capita number of fraud and identity theft reports.

Now for two nuggets to remind businesses to keep their guard up, too.

1.  Scammers are out to exploit your company’s good name. The Consumer Sentinel Network is receiving more reports of business imposter scams – up from roughly 107,000 in 2019 to 155,000 in 2020. That’s when fraudsters hijack the names of businesses or business people, often to get others to click on malicious links or turn over sensitive information. A variation on the scheme involves phony job offers – a form of fraud likely the product of pandemic-related employment upheaval.

What you can do: Remind customers that your company will never email or call them out of the blue to ask for sensitive information – credit card numbers, account data, and the like. For employees, the remote workplace can make it harder for them to investigate questionable contacts. Perhaps it’s time for a training refresher about the risks of clicking on email links or responding to cold calls asking for confidential data. No need to start from scratch. The FTC has materials on business email imposters you can share with your staff.

2.  There’s been a surge in identity theft related to unemployment insurance claims.  Of the identity theft reports received in 2020, 406,375 came from people who said their information was misused to apply for a government document or benefit – for example, unemployment insurance. That’s a whopping increase from 2019 when the number was 23,213.

What you can do: Alert your HR team and tell your employees to let you know if they get a letter about an unemployment insurance claim while they still work for you. Contact the appropriate state agency immediately if you suspect this form of fraud.

When you spot a questionable practice either in your business capacity or as a consumer, let the FTC know at ReportFraud.ftc.gov. By reporting what you saw to the FTC and members of the Consumer Sentinel Network, you can help law enforcement efforts and perhaps protect others from getting scammed. Encourage family, friends, and colleagues to report fraud, too. To explain the importance of speaking up, the FTC’s data analysis site, ftc.gov/exploredata, has eye-catching graphics you can customize and add to a slide deck for your next business or community presentation.