Common Types of Phone Scams

6 Common Types of Phone Scams Used by Imposters

Did you know? The Federal Trade Commission received over 2.1 million complaints against fraud post-pandemic.

Despite the rapid rise of internet scams and cybercrimes, most fraud cases involved different types of phone scams. These crimes were ranked amongst the top five fraud crimes reported in 2020.

Con artists know how to pull off exploitive schemes to steal money over the phone. These tactics range from pleas for financial aid and free prizes to false service claims.

Here’s a close look at the common tactics scammers use these days:

Business and Investment Scams

Callers act as financial advisors or bank representatives when they introduce themselves. They offer financial support to help you become an entrepreneur or guarantee substantial profits from investment bonds or selling schemes.

After the transaction, you find out that everything they said was a lie.

Beware of Imposter Scams

In this case, a con artist poses as someone you can trust. Mostly it is either a government agency (i.e. IRS or Social Security Administration) or a loved one (i.e., a family member, friend or coworker). They might even act as an IT expert calling in to inform you that there’s a technical issue with your computer.

All these scenarios lead to extortion. These imposters will create scenarios to ask you for money.

Common claims include:

• Penalties for breaking the law
• Advanced fee payment for official services
• Financial crisis

These types of phone scams are effective because the target already trusts these individuals and agencies. Plus, most scammers have sufficient personal information to make this con believable. For instance, they can use fake names and phone numbers to verify their identity.

Credit Card Repair/Debt Relief Scams

Scammers target people with bad credit scores and high debts. They call in to provide financial advice and services. These can include offers to fix credit scores or reduce interest rates on the credit card. Unfortunately, their suggestions are unreliable and destructive. Victims often lose money and ruin their credit after payment.

Due to this, you have to pay off more debt instead of gaining financial relief.

Advanced Fee Loan Scams

In these cases, con artists charge an upfront fee in exchange for loans. They tend to approach people with bad credit scores. These victims fall for the scheme because they need money, and banks have rejected their loan applications.

Like the other types of phone scams, you don’t hear from these callers once they get paid.

Disaster/Charity Scams

Some criminals use natural disasters and social causes to exploit generous benefactors. These opportunists create fake charities as a ruse to ask for funds.  Then use the collective donation to line their pockets instead of supporting the cause.

Therefore, you should avoid donating money over the phone. Always run a background check before opening your wallet. You can also steer clear of phony charities by giving funds to reputable and well-known organizations.

Sweepstakes/Lottery Prizes

Lastly, we have the good old ‘you won a lottery’ call.

Criminals use this excuse to get your social security number and credit card details for alleged registration. They might even ask for a shipping fee to send the non-existent prize.  Once they get what they want, they will run off with your money or use your security details for ulterior means.

The Bottom Line

Long story short, never share personal details or sign up for services over the phone. Constant vigilance is the key to avoid all types of phone scams.

If you get a call from an unknown number, do your research before considering their offer. Likewise, if the imposter pretends to be someone you know, do your due diligence. Contact a mutual friend before you help the caller.

Are you interested in more information about fraud and scams? Browse through FraudTrac resource center for further details.