An anti-virus scam
In September 2023, an email popped into Ravi G.’s inbox confirming the automatic renewal of his Norton anti-virus software. It included the renewal amount and a phone number to call in case Ravi wanted to cancel his membership and get a refund.
Ravi G,* a New York-based director in financial services did not find the message suspicious. “It had the right logos and felt legitimate,” he said. So he called the number for a refund. The connection was glitchy so the agent asked for his home number and called Ravi back immediately.
What followed was a set of deceptive interactions that eventually led to the scammer taking control of Ravi’s laptop.
First, the scammer claimed the refund would show up in his bank account. It did not. Then he convinced Ravi to let him access his laptop to see why the refund hadn’t come through. Once he took control, the scammer downloaded software onto Ravi’s laptop to fix it ‘remotely.’
Didn’t Ravi hear alarm bells at that point? “It was a busy time in my day. I just wanted to get it over with,” he says. “Also I’ve used remote Apple tech support on my MacBooks before.”
Once the download was complete, the scammer suggested that Ravi log into his bank account to verify he had received the refund. When he did, the screen went blank.
“Boom. That was a red flag,” Ravi remembers.
Sophisticated scams can fool even the most security-conscious consumers.
“I’ve worked both in financial and tech companies. I genuinely believed it was a message from Norton,” said Ravi. “I was susceptible because I was busy and rather than checking and confirming I reacted without verifying – acting on impulse to get it over with.”
The Norton website currently carries consumer warnings about cyber criminals impersonating their brands to trick consumers, with examples of fraudulent emails (shown below).
Consumers lose $10 billion to scams
According to the Federal Trade Commission (FTC), scams like these cost consumers a staggering $10 billion in 2023. The FTC recently released data on the newest trends in scammer tools and payment methods used to persuade unsuspecting consumers to fork over their money.
FTC data on nationwide fraud reported that email scams increased in 2023, overtaking texts and phone calls as the number one way to contact consumers.
One in four consumers reported losing money with a median loss of $500 per consumer said Maria Mayo, Acting Associate Director for the Division of Consumer Response and Operations in the FTC Bureau of Consumer Protection.
At a Feb. 9 EMS briefing on the top scams of 2023, she said, “I was really surprised to see that we had surpassed that mark. This is an increase from the $9 billion in losses reported in 2022.”
Scammer Tools & Payment Methods
Imposter fraud tops the list of scams to which consumers lost $752 million in 2023. Other fraud categories include online shopping and investment scams, alongside business and job opportunity fraud.
Losses to FTC imposters skyrocketed in 2023 with a median loss of $7,000 compared to a $3,000 median loss in 2019. The imposter pretends to be a trusted entity – a business, a government agency, tech support, or even a family member or friend.
Scammers send fake banking alerts about fraudulent activity on an account. When the consumer responds he is then transferred to a fictitious US Marshal who asks for identity verification and warns that their funds are at risk of a money laundering scheme. The consumer ends up withdrawing cash from their personal checking and savings accounts and transferring it to a secure crypto wallet that the Marshal claims will protect their funds.
“It is a scam and the consumer loses everything,” warned Mayo.
One consumer fell prey to a female investment advisor who promised lessons in trading. He transferred $10,000 from his account via bank wire, had an opportunity to withdraw the first profit, and then entrusted the advisor with all of his money which he lost.
“He really thought this woman was helping him,” added Mayo.
$50,000 in A Shoebox
On Feb 15, Charlotte Cowles, The Cut’s financial advice columnist revealed in her column that she handed over $50,00o in a shoebox to an imposter who alerted her to fraudulent activity in her Amazon account.
The caller warned Cowles about the possibility of identity theft and referred her to a liaison at the FTC who spun a chilling tale of money laundering, drug trafficking, and cybercrime associated with accounts registered to her name. That scared Cowles.
Without producing a shred of evidence, the fake FTC officer persuaded Cowles to withdraw money from her account (even though her bank teller handed over the money along with a leaflet warning about scams) – and give it to him for safekeeping. She gave the scammers $50,000 in a shoebox.
Though Cowles is a financial advisor, her baffling decision not to call the police or a lawyer, reflects the twisted power scammers wield over their victims, even if they are well-educated.
Scams come with hefty price tags
People who paid scammers by bank transfers lost $1.9 billion and those who used cryptocurrency for fraud involving investment advice and romance scams reported losing $1.4 billion in 2023.
Phone scammers were responsible for higher median losses with a median loss of $1,480 per consumer. Fraud that started on social media cost consumers the most money at $1.4 billion.
$338 million in losses accounted for scams involving prizes, sweepstakes, and lotteries, three categories that have remained the same since 2021. Consumers get a call about winning a prize that requires a fee paid to receive their winnings.
Why reporting scams matter
Reporting scams to the FTC matters because it allows the agency to mine the data for leads that support law enforcement work. To protect the public from deceptive or unfair business the FTC uses data from consumer reports for its strategic planning, and outreach.
Millions of reports are made available to nearly 3000. state, federal, and local law enforcement entities across the country, to investigate types of fraud and scams targeting communities.
When for example, reports revealed that gift cards had become a payment instrument of choice by scammers, the FTC reached out to the gift card industry to study the spike and curb the abuse of gift cards.
The FTC also helped shut down an investment scam by a company called B I N T ( Blessings In No Time) targeting black consumers by promising an 800% return on investment. It was a recruiting scam where the only funds collected came from friends and family recruited to join the scheme.
AI Alert
The FTC warned that sophisticated cloning technology could mimic voices through AI to create impersonator scams. Lois Greisman, Associate Director of the FTC Division of Marketing Practices, said that scammers have used AI to mimic the voices of loved ones, asking for wire transfers of thousands of dollars to pay for emergencies like surgery. Red flags to look out for are insistence on payment via wire transfer, Gift Card Payment, or cryptocurrency, added Grieisman.
In retrospect, Ravi G. regrets the impatience that made him vulnerable to scammers. Fortunately, his bank had safeguards in place to prevent the fraudsters from taking control of his account. They suggested immediately shutting down his bank account and opening a new one. Until then, “No outbound transactions were allowed,” said Ravi, an outcome that impacted his financial and credit history.
“The most frustrating part was all my payments and deductions flowed through that account” His mortgage and monthly payments had to be replicated in the new account – a process that took “actually more than three months to resolve. I still had payments that got bounced and charged for.”
“I always said and believed this wouldn’t happen to me, said Ravi. “If it could happen to me it could happen to anyone.”
Ravi G,* (name changed upon request)
What consumers can do
To report fraud call 877-382-4357 and press 3 to report.
Phone lines are available between 9 am and 5 pm EST.
Online, report fraud at fraud@ftc.gov.
To report identity theft call 877-438-4338 and press 3.
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