This article is meant to teach you more about how to identify and deal with fraudulent phone calls and text messages. In some cases, it might be better to seek professional advice or help from a law-enforcement agency.
FBI recommends that, after identifying a phone scam, the best way is to say thank you and end the call.
Not everyone fooled by these scammers is new to technology. These scammers are still in business because they have been able to fool many of us around despite all the warning signs, even when we had previous dealings with some of their colleagues.
They have been successful so far because they can play with the human mind. Phone scammers use official names like FBI, Microsoft, and Google making it difficult for us to ignore the call. They talk like professionals and know how to push our buttons. They use anxiety to scare us into making a quick transaction. They fiddle with human greed to make us share information that we would normally keep private for a ‘too good to be true’ material benefit. I say this because I know the feeling…
In case you doubt them, they tell you about the legal protection you have against a phone scammer and that the number is US registered so you can file a complaint if it turns out to be a scam. In reality with VOIP number and a lot of free mobile applications to get a US number, it is almost impossible to locate the caller and file a complaint.
Phone scammers are human, just like us. They make mistakes too, and they have their limitations. Below I will tell you how to identify a phone scam and a few tips on how to deal with it.
Table Of Contents
- 1 Most Common Phone Scams
- 2 Cramming Scams
- 3 How to Identify a Phone Scam
- 4 How to Handle Phone Scams
- 5 Phone Call versus SMS fraud
- 6 How Some Service Providers Make It Harder To Detect Fraud
- 7 Where to Report Phone Scams
Most Common Phone Scams
Phone scammers will try to fool you in many ways. You might know some of their tactics, but others might still surprise you. It’s best to have an idea about the different types of phone scams so you can identify them immediately.
Have you ever received a call from IRS about your pending tax payments needed to be submitted immediately? Has an agent from police or FBI ever called you to provide personal data for verification? If the answer is yes, you know what I am talking about.
Impersonation is perhaps the most popular tactic among phone scammer. Scammers use the Internet and social media to collect and replicate basic data about an agency or institution to make their impersonation feel more legitimate.
This scam is more common than you think. In 2014 alone, FTC claimed to receive more than 200,000 complaints against callers pretending to be:
- Salesperson from Google giving you a catchy offer to improve your small business listing
- Someone from Microsoft Tech Support department is claiming to have detected a virus in your system that
needs immediate deletion to protect your computer.
- IRS warning you of your unpaid taxes and giving you a small amount of time to wire the ‘overdue’ amount or else legal action will be taken against you.
- Government agent from FBI or the local court pressurizing you to send settlement money to avoid arrests or a court appearance.
- The sheriff, calling you to pay bail money for the arrest warrant against you or to bail out your close friend or relative.
- Your Internet Service Provider (ISP) warning you against malware or offering you a free virus scan.
- A loan recovery agent is threatening you to make you pay back a loan you never actually received.
- A marketing agency is announcing a grand prize you just won and asking you to send a small processing fee.
Despite these being common and widely-spread scamming practices, fraudsters still have managed to fool a lot of us.
A good example is an Indian man who orchestrated one of the biggest IRS-impersonation scams, Sagar Thakkar. He was able to get more than 150,000 dollars a day through his scamming circle.
Also, Microsoft estimated that more than 3 billion customers fell victim to Microsoft impersonation scam in 2015.
One major reason these impersonation scams are successful is a fake or spoofed caller ID. Scammers can rig a caller ID and make a person think he has received a call from a police department or FBI.
You can lose money on the phone even when you never answered a scam call. Among the phone scamming, another very common method is putting extra charges on your phone bills. The method, called cramming, works through third-party payments on your phone. Phone service providers introduced this new service around a decade ago allowing you to pay bills for other companies through your phone bills. Appearing as a way to add convenience to your life, the service actually results in over 20 million crammed payments each year.
Interestingly, you might have missed this extra charges on your phone bill because the amount is usually very low (but you are paying it monthly). As per FTC, only 1 in 20 victims of cramming actually notice the extra charge and file a complaint.
Missed Call Phone Fraud
Another scheme plotted by tele-scammers is to make you pay for an International call while thinking you are just calling back on a normal US registered number. There are certain International area codes, 268, 284, 473, 664, 649, 767, 809, 829 and 876, that scammers try to make you think they are a domestic number. All they do is call you and hang up right away before you get a chance to answer. When you call back, they try prolonging the conversation. Even if you succeed in ending the call within the first minute, around $20 will get added to your phone bill because these are International numbers.
“Can you Hear Me?” Calls
In 2017, police issued warning against a new form of a phone scam where the caller asks you to a simple question: “Can you hear me?” Your usual reply is Yes, and then he or she hangs up. According to news outlets, these scammers can use your affirmative response against you for unauthorized charges on your phone. While the scam became really popular and many reported receiving such calls, FTC did not receive a single complaint of loss caused by these calls. So I am not sure if this us an actual scam or a different type of scheme.
How to Identify a Phone Scam
Knowing common ways of phone scamming is helpful in identifying them, but there can be many new ways a phone scammer can ditch you. With more improvement in technology, they might come up with more sophisticated ways. Here are few tips that can help you identify a scammer
- They usually have “now or never” offer or warning.
- The “free” prize or service or income tax deduction is not really free. You are supposed to send some “handling fee,” “service charges” or “sales tax.”
- They ask you to wire money instead of giving out their official account details.
- They try to get for personal information like your credit card details before properly identifying themselves and without giving you a chance to verify THEIR identity.
- They don’t let you consult anyone else about the reason for their call (may it be an offer, overdue payments or others).
- They try handling everything during the call and sometimes ask you to go to certain websites, but they won’t send you any legal notice or information about the company in writing
- They pretend to be from any government service agency or big corporations. Usually, these agencies or companies give you time to make a decision, and they provide easy ways to verify their identity.
How to Handle Phone Scams
Besides the “missed call” phone fraud, the common factor of phone scams is that THEY call you. So the best way to handle phone scams is to treat calls that you receive from unknown numbers with a lot of EXTRA care.
Here are few tips on avoiding financial or personal information loss caused by impersonation phone scams:
- Do not give out your personal information on the phone, unless you are 100% certain that you know who you are talking to. Even then, limit what you tell them strictly to what’s necessary for making sure that the outcome of the call is in your favor. Always question why they are asking for your information. Let them know upfront that you are worried about your privacy and ask if they can help you verify their identity. One of the best ways to do so is to hang up and contact the company at their official number (ask the caller if they can provide an extension number where they can be contacted fast).
- Never make any urgent transaction. Ask the caller to let you consult your lawyer or someone reliable in your family before making the payment.
- IRS does not give you urgent, last-minute warnings through calls. If the caller threatens you and asks for immediate payment, hang up and contact IRS through their official contact numbers to confirm if there is any overdue payment to be made.
- Government agencies and private service providers do not define “urgent” or “immediate” as synonymous to right away. They will usually give you at least a few days to verify the information and then make payments. If a caller, claiming to be from a government service agency, wants you to send payments immediately, ask him for the exact deadline and again confirm it through the official contact numbers of that agency before making payments.
- If you suspect the call is a scam, ask for verification information like company name, employee number, department, etc. Once you have that information, tell them you need to review the case for privacy reasons or to collect the information they needed from you (do not admit anything). Search for the company online, get their phone number and call them to verify if the call was really from them or not. This way you can make sure that you are talking to the company that they pretended they work for.
- Legally, a sales call must divulge their name and other important details of the company as well as particulars of the product and service before they make their pitch. If a caller jumps directly to the sales pitch, it’s best to get off the phone.
- Big companies like Google and Microsoft don’t usually call you to offer free services. They usually market themselves through emailed newsletter you agree to receive from them. Be very skeptical if the caller claims to be associated with large enterprises. Let them know from the very beginning that you’ll need time to think over the offer, even if they try to push a ‘last minute, unique offer.’
- Be wary of ‘free gifts’ or ‘free prizes.’ Ask questions about how you won a prize if you don’t remember entering a contest. Legitimate free gifts are few, and they are usually given to get your email or physical address so they can market you additional, related products. Even for those ‘free gifts,’ a big portion of the price, if not all or more, is covered by the shipping fee. An example is if you enter your email address to receive a multi-function tool. You are then being told that you will receive it for free if you pay the low shipping price of $9.99. In reality, the acquisition price for the multi-tool is somewhere around $5 and the actual shipping charges around a couple of bucks, depending on where it ships from. You do the math.
- As per FTC, telemarketing calls can only come between 8am-9 pm. If you are receiving a telemarketing call at other times, file a complaint against them.
- If scammers constantly target you, register your number on the do not call registry. If you receive a sales call after that, the company is breaking law. File a complaint against such calls.
- To avoid cramming, call your provider and block third-party charges on your phone. Also, make sure your read through your phone bill every month.
- To deal with the missed phone call scam, if you do not recognize the number, check the area code on Internet to ensure it is a domestic phone number.
Your parents are more likely to fall victim to such calls than you as most warnings are made through the Internet and social media websites which are not a familiar medium for them. Share this article with them to ensure they are as aware and prepared for the situation as their tech-friendly offspring is.
Phone Call versus SMS fraud
With SMS being a new medium for business marketing, scammers have also adopted it for their fraudulent business. Here is a simple comparison on how SMS fraud is different from phone call scams:
Since phone scams are as old as telemarketing through landline numbers, there are laws made to ensure consumer protection. SMS marketing is a new form of marketing where laws have not yet addressed the possible loopholes. So the scammers find it easier to manipulate laws and face lighter consequences if caught.
- With smartphone technology, your phone is now connected to the Internet, and these SMS often come like a standard sales message with a link to shop. On clicking the link, however, you are exposing your personal details stored on your phone to a scammer. During a phone call, at least, you cannot download a file or click or link without knowing.
- There is no human verification of SMS messages, so they play with your psyche using language that is hard to detect by network operators.
Common SMS fraud
- Malware and viruses send through SMS. They usually come with a web link containing the virus.
- Revenue sharing mobile applications that let people share a number of SMS messages (originating from their smartphone) with marketing companies in return for a part of the revenue. In reality, many of these marketing businesses are spam generators that use your SMS data for an illegal activity.
- Prize announcement SMS are even more dangerous than corresponding phone calls. On responding to these texts, you will not even be asked for any payment, but you might automatically be subscribed to expensive services without any clear disclosure.
- Silent SMS through which your SMS sender can find your location through a text message that your phone receives and acknowledges without you noticing it. This tactic is also called location sniffing.
While SMS fraud is relatively new, you can ensure the security of your phone by deleting all unnecessary sales messages without even opening them. If you are tempted to open the message, make sure you do not click the link attached to them. If the offer is from a known company, visit their official website or call their official contact numbers on their website to get more information.
How Some Service Providers Make It Harder To Detect Fraud
Phone scammers get a free ride because of a practice some service providers take part in. While FTC clearly says that service providers must introduce themselves before making any demands or service offers or sales pitch, many service providers do not do it. They call you and just ask for the name of the person they want to talk to without properly introducing themselves. This is not just illegal but also against the basic communication etiquette and it makes it harder for you to tell legitimate calls from spam calls. If you receive any such call, remind them that you need to verify who they are first, before listening to their offer or piece of information.
Where to Report Phone Scams
If you are a victim of phone scamming or believe that the call you just received was a scam, file a complaint at:
- Federal Trade Commission, in most fraud cases related to telemarketing: https://www.ftccomplaintassistant.gov/ Phone: 1 (877) FTC-HELP (1-877-382-4357)
- Federal Communication Commission for cramming or SMS frauds: https://consumercomplaints.fcc.gov/hc/en-us/requests/new?ticket_form_id=39744
- Internet Crime Complain Center, if the fraud involved Internet: https://www.ic3.gov/default.aspx
- Consumer Final Protection Bureau, for frauds related to credit or loan schemes: Email: firstname.lastname@example.org Phone: 1-855-411-CFPB (1-855-411-2372)
- If the scammer pretends to be a government agency or service, use the complaint registry system of that agency as well.
- To get specific details on credit card or banking frauds, visit StopFraud.gov
Let’s be honest. It is hard to keep the pace with new ways that scammers (some of which are an ocean away) dream up on how to part you with your money.
It is hard to keep the pace with new ways that scammers (some of which are an ocean away) dream up on how to part you with your money.
It is hard to keep the pace with new ways that scammers (some of which are an ocean away) dream up on how to part you with your money. But what we can do is keep an eye (or more exactly, an ear) open, and try to prevent these fraudulent schemes as soon as they happen. Please let us know about your personal experience with a fraudster so we can keep this article updated with the latest and trending phone scams.