National Consumers League

Watchdog report: scammers increasingly relying on Internet-enabled phone technology to reach victims

January 22, 2014

Contact: NCL Communications, Ben Klein, (202) 835-3323, benk@nclnet.org

Washington, DC -- The National Consumers League (NCL), the nation’s pioneering consumer advocacy organization, has released its annual compilation of the top ten scams reported to Fraud.org, NCL’s flagship project for reporting and tracking scams. Good news: payment to fraudsters by credit card is up. Bad news: telemarketing fraud is making a major comeback. In more than 36 percent of all consumer complaints, victims were contacted by phone. This figure is up from approximately 25 percent in 2012. 

Using Internet calling software, scammers can peddle their schemes from practically anywhere on the globe, and they deceive Caller ID systems to make their calls appear to come from U.S. numbers.

“Scammers are finding new ways to use the Internet to contact high volumes of consumers on the phone,” said John Breyault, NCL’s vice president of public policy on telecommunications and fraud. “The days of dialing numbers and calling consumers one by one are long gone. Today, scammers can call millions of people with the click of a mouse.” 

The most frequently reported scams from 2012 remained the same in 2013, with nearly 75 percent of all complaints reported to Fraud.org falling into one of three categories: Fake Check Scams (24.23%), Internet Merchandise Scams (23.04%), and Fake Prizes/Sweepstakes (22.76%). 

A new trend in 2013: a rise in refund and recovery scams, in which fraudsters target vulnerable consumers that have been put on a “sucker list.” These consumers have already fallen victim to scams and have been identified as easy prey. Con artists buy, sell, and trade lists of victims amongst themselves so that they can be re-contacted. Scammers using the refund and recovery fraud attack will pitch victims through phone calls and direct mail, claiming that they can help recover lost funds for a fee. In 2013, this was the fastest-growing type of non-Internet scam reported to NCL’s Fraud.org campaign.

Some good news: a positive trend in the 2013 report is a shift in how victims pay con artists. In 2013, nearly 35 percent of all victims reported losing money to a scam with a credit card, up from just 18 percent in 2012. Victims who pay with credit cards can more easily recover lost funds than those who pay via wire transfer service, the most common way pay for offers that turn out to be fraudulent.

“Credit card transactions are the safest way for consumers to pay for products since they have the ability to dispute fraudulent charges with their credit card company,” said Sally Greenberg, NCL executive director. “While consumers paying scammers using a wire transfer service was still the number one way con artists were paid in 2013, the number of reports involving a credit card payment nearly doubled. This is a sign that consumers are better protecting themselves and hedging against the risk of a potential scam.”

Read the full 2013 top ten scams report here.

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About the National Consumers League
The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit http://www.nclnet.org.