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2017 BBB Scam Tracker Report: Online Purchase Scams Riskiest Typ - LEX18.com | Continuous News and StormTracker Weather

2017 BBB Scam Tracker Report: Online Purchase Scams Riskiest Type of Fraud

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ARLINGTON, Va. (BBB) – Online purchase scams are now the riskiest form of consumer fraud, according to a new report from the Better Business Bureau.

In 2017, consumers reported more than 47,000 scams to BBB Scam Tracker. The organization analyzed this information to determine the riskiest scams based on exposure, susceptibility, and monetary loss. The findings, released for National Consumer Protection Week, show some significant changes from 2016:

  • Tax collection scams decreased 60% in volume of reports, likely due to the arrest in India in 2016 of a ringleader of a network of call centers primarily responsible for the IRS scam.
  • Online purchase scams jumped from the 4th riskiest scam to the top spot, likely due to an increase in exposure.
  • Home improvement scams dropped from 1st to 6th riskiest, despite a number of natural disasters that traditionally bring out “stormchasers.”

Young people continue to be at higher risk for scams, and susceptibility decreases with agealthough dollars lost increases when victims are older.

One interesting phenomenon from 2017 was the prevalence of a new scam, dubbed “Can you hear me?” for the opening line that was extremely common early in the year. BBB Scam Tracker received more than 10,000 reports on the ‘Can you hear me?’ scam, but virtually none of those reporting could point to an actual monetary loss due to the calls.

The most common online purchase scams in 2017 were related to pets, clothing, cosmetics, electronics, and automobiles. The offer of free trials was a common tactic for these online purchases: 67% of scams involving cosmetics and 60% involving nutrition products mentioned a free trial opportunity.

Another significant increase was in the category of investment scams, which tend to target older age groups and come with a higher average monetary loss. This scam type jumped from the 6th riskiest in 2016 to the 2nd riskiest in 2017.

Home improvement scams dropped from the riskiest scam in 2016 to 6th riskiest in 2017. Surprisingly, the drop occurred in a year marked by several weather-related disasters, including hurricanes Irma and Harvey. BBB believes this may have been due to a significant increase in information from the media and consumer protection groups following disasters.

The top ten riskiest scams in 2017 were:

  1. Online purchase scam (up from #4 in 2016)
  2. Investment scam (up from #6 in 2016)
  3. Employment scam (no change)
  4. Advance fee loan scam (up from #5 in 2016)
  5. Fake check scam (down from #2 in 2016)
  6. Home improvement scam (down from #1 in 2016)
  7. Tech support scam (up from #8 in 2016)
  8. Travel/vacation scam (new to top 10, #12 in 2016)
  9. Family/friend emergency scam (no change) 
  10.  Government grant scam (new to top 10, #11 in 2016)

Travel and vacation scams joined the list, along with the government grant scam. Two scams left the top ten list: romance scams and sweepstakes/lottery/prize scams.

One of the most common tactics of scammers is impersonation, where the scammer pretends to be a well-known, trusted legitimate business/organization. The top legitimate organizations that were used by scammers in 2017 were: U.S. Internal Revenue Service; U.S. Government (Grant/Treasury/Reserve/Medicare); Better Business Bureau; Publishers Clearing House; and Microsoft.

Even though a phone call is the primary means of contact for all the reports, in the last year, websites took over as the top means of contact for scams with monetary loss.

Regardless of the scam, scammers often rely on the following tactics:

  • The promise of getting a “great deal” (which is often too good to be true);
  • Pressure to respond immediately with offers that are time sensitive and prices that “can’t be guaranteed;”
  • Intimidation (for example, “You are under federal investigation”; “You will be arrested within one hour unless you call this number”); and
  • Isolation, which aims to force a decision without others’ opinions.

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