Criminals spend a lot of time and energy coming up with new ways to scam consumers but there remain tried and true schemes they tend to employ over and over.
The Federal Trade Commission (FTC) tracks these scams along with other consumer complaints, and ranks them each year, showing which ones are becoming more common.
Not every type of complaint involves criminality. ConsumerAffairs analyzed the FTC’s list of complaints, ranking the actual scams based on the number of FTC complaints.
Number one for the second straight year is identity theft – probably the most dangerous scam of all.
In identity theft, a criminal has gained enough personal identifying information on the victim to take over their identity. With a full name, address, and Social Security number, the scammer can apply for loans and credit cards in the victim’s name.
A victim might not know for months that this has happened. The tipoff could come when they check their credit score and discover it has plunged, mainly because the person who stole their identity isn’t making any payments.
The best protection is to contact the three credit reporting agencies – Experian, Equifax, and TransUnion – and freeze access to your credit report.
Also for the second year in a row, imposter scams are second on the list. These schemes can take many different forms.
Sometimes the scammer claims to be a law enforcement official or someone connected to a government agency. They may also claim to be a well-known company, such as Amazon, Netflix, or a major bank.
Debt collection scams
Unscrupulous debt collectors often purchase old, discharged debt for pennies on the dollar. The debt is considered uncollectable for any number of reasons and the business is happy to get it off its books.
The debt collector then begins harassing the victim, claiming they are still on the hook for the debt. They make threats and often report the old debt to credit agencies, damaging the victim’s credit score.
This type of behavior is a violation of the Fair Debt Collections Practices act. The victim should not pay but report the harassment to local consumer protection authorities or their state attorney general.
Investment related scams
During the pandemic, when millions of Americans stayed home, there was a surge in day trading in stocks and crypto. Not surprisingly, the FTC got more complaints about investment scams and they remain in fourth place.
Scammers devised schemes revolving around phony investment opportunities, misleading pitches for precious metals and “rare” coins, and worthless investing seminars.
Business opportunity scams
During the pandemic, when millions of Americans were suddenly working from home, millions more were laid off. Now that businesses are requiring workers to return to the office, scammers are tempting both groups with work-at-home business opportunities.
The schemes range from shady multilevel marketing to phony remote job listings. A few scammers have even dusted off “envelope stuffing” and “medical records filing,” two schemes from decades ago.
Prizes, lotteries, and sweepstakes
These types of scams go back decades but unfortunately, they still snag victims. It could be an email or phone call that comes out of the blue with fantastic news! You’ve just won $250,000 in an international sweepstakes or lottery!
The victims are so happy they don’t stop to ask how that’s possible since they didn’t enter any contests. Once they are encouraged to think about how they’ll use the money, they are told they will have to pay taxes and an administrative fee, but it’s only $1,500.
Of course, there is no prize money and the victim is not only NOT hitting the jackpot, but they’re also out $1,500.
Health care scams
There are a whole host of healthcare scams and they keep FTC attorneys busy, in addition to ripping off consumers. The FTC has taken action against a number of dietary supplement peddlers who promised consumers miracle results.
Other scams in this category include weight loss products, impotency cures, worthless HIV test kits, and medical discount cards that provide little to no savings on prescription drugs and medical services.
Advance payment scams
Scammers like to offer services like debt relief but charge an upfront fee. That’s a huge red flag since these kinds of advance fees for service are against the law.
Other complaints in this category revolve around things like worthless credit card protection and promises that negative information can be removed from your credit report. If anyone offering these types of services demands an upfront fee, it’s a scam.
Foreign money offers and fake checks
Coming in at number nine on the list is a collection of scams that were widespread two decades ago. Who doesn’t remember getting an email from the Nigerian prince who was being overthrown and needed to transfer several million dollars out of the country?
Other scams in this category include being overpaid for work or for a piece of property and being instructed to deposit the check and wire the balance back to the scammer. The bank will accept the check but within days will discover it is counterfeit and deduct the money from the customer’s account. In the meantime, the victim has wired real money to the scammer.
Foreclosure relief and debt management
Foreclosures are near a record low but that hasn’t stopped scammers from preying on the small number of Americans who are in danger of losing their homes. Operators claiming to be legal experts tell desperate homeowners they can prevent foreclosure but they charge a large, upfront payment.
As a side hustle, some of these same operators claim they can reduce or eliminate your credit card debt. They make empty promises and charge excessive fees.