Top 2013 scams report: new trends in telemarketing fraud, credit cards, and more

As posted on January 23, 2014 on fraud.org

Worry about consumers’ vulnerability to fraud attacks has never been so great, with new headlines about the growing millions of Americans whose personal information has been stolen appearing every day. With fraud vulnerability on the minds of many, the experts at the National Consumers League are releasing a report about scam trends from 2013—some good, some bad, and with new warnings for avoiding fraud. 

New trend: Fraudulent telemarketers a top concern

For years, the most frequent way that consumers reported coming into contact with scammers was via websites or email. In 2013, however, the most frequent way that scammers approached consumers was over the telephone. More than 36% of complaints to Fraud.org indicated that the phone was the initial method of contact, up from just over a quarter of complaints in 2012.

Fraud on the rise: Refund and recovery scams

Losing money to a scammer is bad enough. Unfortunately, consumers who fall victim to con artists often find their way on to lead lists that scammers buy, sell and trade amongst themselves. Scammers using the “refund and recovery” fraud will pitch victims through phone calls and direct mail claiming that can recover their lost money. The catch is that the victims need to pay a fee to “recover” the losses. In fact, the pitch is just another scam designed to get even more money from victims. In 2013, this scam was the fastest-growing type of non-Internet scam reported to NCL’s Fraud.org campaign.

Top scams continue to thrive: Fake Check Fraud, Bogus Internet Merchandise and Sweepstakes Scams

Nearly three quarters of all complaints to Fraud.org in 2013 fell into just three categories – Fake Check Scams (24.23%), Internet Merchandise Scams (23.04%) and Fake Prizes/Sweepstakes (22.76%). Fake check scams remained the top complaint in 2013, but scammers appear to be increasingly relying on bogus Internet merchandise and bogus sweepstakes (such as the infamous Jamaican lottery scam) to defraud consumers.

Good news: Credit cards a more frequent payment method

In general, talking about increases in fraud trends isn’t usually a good thing. This trend, however, is a good sign. Credit card transactions are generally the safest way to pay due to consumers’ ability to dispute charges that turn out to be fraudulent and be made whole by their credit card company. In the past, fraudsters have typically preferred wire transfer services. However, consumer reports to Fraud.org indicate that scammers are increasingly getting paid via credit card transactions. In 2012, payment via credit card was reported in just over 18% of complaints. In 2013, credit card payment jumped to more than a third of complaints (34.76%).

View the 2013 report here (PDF).