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Phone scams may sound old and outdated, but they’re still common today. The Federal Trade Commission’s Consumer Sentinel Network 2016 report states, “The most widely reported method of payment (58%) for those who reported losing money to fraud was a wire transfer. Of those who noted in their fraud complaint how they were first contacted, 77% said it was by phone.” It’s important for consumers to be aware of fraud because it’s very difficult for law enforcement to prevent these types of fraud. Avoid these common phone scams. Here are common phone scams to avoid:
Signs of a Scam
Spotting these phone scams can be as easy as listening to the first few lines the caller throws your way. Usually, scammers on the other end of the phone try not to give you any time to think and figure out their pitch; all they want is for you to say yes. There are some scammers who are so crafty, they seem happy to comply even when you ask for more information. They may ask you to visit some website, or they might send you some information about their supposed business that features their satisfied customers. This lends an air of credibility, which is intended to garner trust.
Some common phone scams start with:
- “You have been specially selected.”
- “You will get a free bonus if …”
- “You won one of the valuable prizes.”
- “This investment is low risk and provides a higher return rate that can’t be found anywhere else.”
- “We would like to offer you this amazing new low rate loan/credit card …”
Tax season brings about a very different type of phone scammer. Scammers will call posing as IRS agents and demand that you pay a fake outstanding tax bill. These calls tend to be aggressive and threatening. You may be threatened with police arrest, deportation, license revocation, and more. According to the Treasury Inspector General Tax Administration (TIGTA), in a recent article from the IRS, victims have been defrauded out of over $54 million since October 2013.
How They Target You
Fraud is not limited to race, gender, age, or income; everyone is a potential target. However, some scammers may go after a certain group of people they feel is easier to target. For example, older people because they may live alone and will be more polite when receiving calls from strangers.
Scammers will use exaggerated or fake prizes or services to catch your attention. Some of them may call you, while others may send you emails, texts, or ads encouraging you to call.
Offers you might receive are:
- Travel Packages: You might get offers for “free” or “low cost” vacations, but these may have hidden charges.
- Credit and Loans: When the economy is down, some of the most popular schemes are advance fee loans, credit card protection, payday loans, or offers that might suggest lowering your credit card interest rate.
- Sham or Inflated Business/Investment Opportunities: For this purpose, scammers rely on the fact that investing in businesses is a complicated matter. Therefore, people tend to not research as thoroughly as they should.
- Charitable Causes: Urgent requests for a recent disaster relief efforts or charity. These can be very effective because they prey on empathy and sympathetic feelings.
Handling an Unexpected Sales Call
Questions you should ask yourself:
- Who is calling and why? Usually, scammers say that it’s a sales call. Be sure to write down the name of the person calling, the company, and the details of the offer. Always ask for more information, and in writing, if possible.
- What’s the hurry? Scammers who talk fast and try to pressure you are more than likely hiding something. If you’re interested in their product, tell them you’re going to research further and that you’ll get back to them. This gives you time to do due diligence without pressure, and to check the validity of the offer. If you’re not interested, politely refuse and hang up.
- If it’s free, then why am I being asked to pay something? Free is supposed to be free. If you’re being asked to pay, then it’s a purchase, not a gift or prize. They may also try to trick you into giving your card information to pay for shipping and handling. When this happens, it is most likely a scam.
- Why should I confirm my account information or even give it out? Try never to give your sensitive information over the phone with these types of calls. Sometimes a scammer may already have your billing information, or parts of it, and are trying to get you to provide the rest.
- What time is it? The FTC has strict rules that state telemarketers can only call you between 8 a.m. and 9 p.m. If a seller is calling you outside of these times, he/she is breaking the law.
- Why am I being threatened? In the case of receiving a call from a supposed IRS agent, he/she shouldn’t be threatening you. According to IRS Commissioner John Koskinen, “If you’re surprised to get a call from the IRS, it almost certainly isn’t the real IRS. We generally initially contact taxpayers by mail.”
Whenever you receive these types of call, keep your cool, take your time to research, and avoid handing out your information. If all else fails, just hang up. You can call the company directly if it’s something you feel warrants further attention. Understanding how to identify and handle these common phone scams will help prevent you from becoming a fraud victim.
Check out this guide to protecting yourself against identity theft online.