Online scams have existed for decades but consumer protections remain limited as scammers become more sophisticated, experts say.
The Federal Trade Commission, the arm of the federal government that oversees the enforcement of consumer protection laws, reported that Americans lost more than $6 billion to fraud in 2021, and more than 2.9 million people reported which lost a median of $500.
In the first three quarters of 2022, consumers lost more than $6 billion, a median of $650. That number likely to increase once the FTC includes data from the last quarter of 2022.
Identity theft and impostor scams have been on the rise for two years. Here’s how to protect yourself.
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What is identity theft?
Identity theft occurs when someone steals personal and sensitive information such as your name, address, credit card, bank account number, medical insurance card number and uses the information to make purchases with stolen credit cards or open a new, opening a utility account, or stealing a consumer tax refund.
How do you spot an impostor?
Impostor scams have increased during the pandemic. A scammer pretends to be someone you trust and convinces you to send money. This could be someone pretending to be offering a job, a love interest or even someone from the IRS.
It can also be someone who pretends to be someone on social media, like an artist, and preys on people’s emotions and vulnerability and offers free services, to finally ask for money.
‘We are outmanned’
Kathy Stokes, AARP’s director of fraud prevention, said scams have grown during the pandemic as more people go online.
And today’s scammers are no longer loners executing a scheme behind a computer, he said. Many scams are now run by “transnational conglomerates” with offices and employees around the world.
Stokes said education is a critical part of fraud prevention, but believes there needs to be a national response, possibly action from lawmakers.
“We are outmanned,” he said.
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Should I tell people I got scammed?
Stokes urged people to notify authorities. Written reports create a paper trail that may one day lead to cash back or personal property.
Victims are often reluctant because the country frames conversations as if the victim is at fault, Stokes said.
“Victims are made to feel stupid, ashamed, so they don’t report,” he said.
Who do I contact if I’ve been scammed?
The Department of Justice directs consumers to report fraud to their local police department, state attorney’s office and the appropriate investigative agency whether it involves health care, lottery, mail or other other industries.
While the FTC takes fraud reports, it does not prosecute individual complaints. When an FTC case involves criminal conduct, the organization notifies criminal prosecutors and works with federal, state and law enforcement agencies.
How can I be safe from online scams?
Stokes advises consumers to do their research, especially if a purchase or a romantic interest seems too good to be true.
“Someone can make you believe things that aren’t true,” ultimately get your money or sensitive information, he said.
Also, lock down social media accounts, says Stokes. Do not publish information that could allow a scammer to manipulate you, or have information that would allow them to gain your trust or create an identity with your name.
“We have to understand that crime is everywhere,” he said.
Amritpal Kaur Sandhu-Longoria is a consumer investigative reporter on USA TODAY’s Money team. Send him your tips at email@example.com, @AmritpalKSL, or the Signal at (279) 789-2462.