Top Ten Scams of 2017

Top ten scams of 2017

Bogus Internet merchandise sales continue to bedevil consumers, top complaint list.

Top Ten Scams of 2017In 2017, for the fifth consecutive year, the National Consumers League’s Fraud.org received more complaints about Internet merchandise scams than any other type of fraud, making up nearly one-third (29.39%) of complaints received.

Read the full report here.

Internet merchandise scams come in many forms—often involving bogus sales of high-dollar goods such as electronics, designer clothing, and even pets. Many victims first encounter these scams via online ads promising deep discounts on popular merchandise. When they click on the ads, they are directed to a website to enter payment information or are instructed to contact a scammer directly. Unfortunately, once the money is paid, the merchandise never arrives. In many cases, buyers report being contacted again and instructed to send more money to cover fake “shipping” or “insurance” charges.

Examples of Internet merchandise sales scams:

  • Anna, California. Paid $3,500 for a used Honda. The seller spoofed a third-party payment site and requested the funds in the form of iTunes gift cards. The car never showed up.
  • John, Indiana. Paid $600 for a Rottweiler puppy named Roscoe. Roscoe never arrived.
  • Dan, a farmer from Germany. Lost more than $22,000 being defrauded by a company posing as suppliers of animal feed. Goods were never shipped.
  • Jennifer, Texas. Bought nearly $400 worth of non-existent airline tickets through a fake site.
  • Irene, Chicago. Ordered NFL jerseys through a website claiming to be an official NFL gear vendor. What arrived were clearly low quality knock-offs.

“The convenience of online shopping is simply unbeatable for many consumers,” said John Breyault, who directs Fraud.org. “Obviously there are plenty of legitimate companies online, but there are also fraudulent sellers out to cheat consumers—and they are very good at what they do.”

Breyault offered the following advice for practicing safe online buying habits. (Even more tips available here.)

  • Do a price-check for similar merchandise before trusting an unknown online retailer, especially one advertising on Craigslist. If the price listed is far below traditional online retailers (think Amazon, Best Buy, Zappos) for a piece of popular merchandise (such as wireless phones, game consoles, sneakers, or designer clothing), the “deal” could easily be a scam.
  • Know who you’re dealing with. If the seller is unfamiliar, check with your state or local consumer protection agency and the Better Business Bureau. Some Web sites have feedback forums, which can provide useful information about other people’s experiences with particular sellers. Get the physical address and phone number in case there is a problem later.
  • Look for information about how complaints are handled. It can be difficult to resolve complaints, especially if the seller is located in another country. Look on the Web site for information about programs the company participates in that require it to meet standards for reliability and help to handle disputes.
  • Pay the safest way: Credit card. If a fraudulent transaction is disputed promptly, chances are the consumer won’t be on the hook for the fraud thanks to banks’ zero liability guarantees and federal consumer protections.

Other 2017 trends: Fake check scams making a comeback

In 2017, the top scams reported to NCL’s Fraud.org campaign remained Internet merchandise scams, fake check scams, bogus prize/sweepstakes scams, and refund/recovery scams. Interestingly, while complaints about refund/recovery scams remained a top category, their prevalence dropped precipitously in 2017. In 2016, these scams made up 15.77 percent of complaints received versus only 8.56 percent in 2017, an 84 percent decrease year-over-year.

While this may seem like good news for consumers, other trends are not so encouraging: fake check scams increased 12.55 percent, and phishing/spoofing scams increased by 27.28 percent year-over-year, respectively. The growth of fake check scam complaints is particularly worrisome, given that the 12.55 percent increase in 2017 followed a 15.16 percent increase in 2016.

Phishing/spoofing scam increase raises worries of breach-fueled fraud

With each major data breach—think Yahoo!, Equifax, Uber, and others— fears increase among cybersecurity experts that the information criminals glean from such breaches will help them craft more convincing phishing and spoofing campaigns. While it may be too soon to make a definitive link, complaints involving phishing and spoofing scams appear to on the rise. In complaints where the consumer was first contacted online, we received a 55.81 percent year-over-year increase in complaints. This follows a 17.22 percent increase in such complaints in 2016.

Phone as method of first contact continues to decrease

The phone’s days as the top gateway for fraudsters to their victims may be numbered. While the telephone remained the method of first contact for scammers in more than a third (34.29 percent) of complaints, web-based initial contact is gaining: 34.11 percent of complainants said their first brush with scammers in 2017 was on the Web. Another 15.18 percent said they first heard from a scammer via email. Both methods of contact were on the rise in 2017 (6.07 percent and 22.9 percent year-over-year increases, respectively, versus 28.94 percent year-over-year decrease for phone).

Older adults may be at increased risk

Complaints from adults ages 46+ made up an increased percentage of complaints to Fraud.org in 2017, while complaints from younger adults (ages 45 and below) decreased year-over-year. While it’s difficult to generalize about fraud trends affecting older consumers, this is a trend we’ll be keeping an eye on in 2018.

Meet the scams: The rest of the worst of 2017

Fake Check Scams
Consumers paid with phony checks for work or for items they’re trying to sell, instructed to wire money back to buyer

Prizes/Sweepstakes/Free Gifts
Requests for payment to claim fictitious prizes, lottery winnings, or gifts

Recovery/Refund Companies
Scammers contact victims and claim the consumer owes money on a fictitious debt or to help recover money lost in a previous scam

Advance Fee Loans, Credit Arrangers
False promises of business or personal loans, even if credit is bad, for a fee upfront

Phishing/Spoofing
Emails pretending to be from a well-known source ask consumers to enter or confirm personal information

Computers: Equipment and Software
Scammers claim to offer “technical support” for computer problems and charge a fee to fix a nonexistent problem

Scholarships/Grants
For a fee, a “search company” offers to conduct customized search for scholarships or grants for students. Scammers take money and run or provide a worthless list

Friendship & Sweetheart Swindles
Con artist nurtures an online relationship, builds trust, and convinces victim to send money

Charitable Solicitations
Scammers contact victims claiming to represent non-existent charities (or real charities they don’t actually work for) and ask for donations.

Regardless of the type of scam, many instances of fraud can be avoided by remembering the old rule of thumb: If something seems too good to be true—it probably is.

If you ever do have questions about a potential fraud or think you might be a victim of a scam, report it immediately via Fraud.org’s secure online complaint form. Embarrassment or fear of friends and relatives finding out about the crime causes many victims of fraud to remain silent. Only by speaking out can we give law enforcement the tools they need to bring these criminals to justice.

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