How to Avoid the Most Common Scams of 2018Just like fashion and music, scams go through different trends over time, with certain kinds of fraud getting more popular as others fall out of favor. If you want to see these trends, look no further than the Consumer Sentinel Network Data Book, an annual report put together by the Federal Trade Commission, or FTC, that compiles data from complaints it receives throughout the year and analyzes how it’s changed. The report for 2018 recently came out, so we’re going through it to see what the most common scams of the last year were and offer up advice on how to protect yourself from them. For a breakdown of what’s trending in the world of scams, keep reading.

Imposter scams take the lead

While debt collection received the most FTC consumer complaints in 2017, imposter scams topped 2018’s list with 535,417 reports. Imposter scams are where fraudsters impersonate a trustworthy figure, such as a government official, a romantic interest or even a distressed family member, to try to get money or personal information from some unsuspected victim. These cons can take many forms, from dire-sounding warnings that you may be put in jail if you don’t settle a bogus tax bill to friendly requests for donations to a sham charity or fake political organization. To make matters worse, 18% of the people who reported an imposter scam also lost money to it, with a median loss of $500.

Though imposter scams are widespread, they’re also not that difficult to avoid once you know the signs. Watch out for phone calls or messages out of the blue asking you for personal information or payment, especially if the person you’re communicating with tries to pressure you into acting quickly. Be equally suspicious of people offering you money or prizes with little-to-no strings attached, as scammers know they can catch people’s interest with free stuff, and it may be a lead-in to a fake check scam. Once you get the feeling that you’re talking to a swindler, stop engaging with them and back out of the conversation. Give yourself some time to evaluate the situation, do some research and come to a more informed conclusion.

Debt collection and identity theft are close behind

With imposter scams now reigning as the No. 1 source of complaints for the FTC, debt collection has slid down to second place and identity theft has held its position in third. Debt collection complaints are down 24% compared to 2017, but they still made up about 16% of the total number of reports, meaning consumers continue to have plenty of issues with debt collectors. Those issues could be with fraudulent debt collection, where scammers will use your personal information to make up phony debts and try to intimidate you into paying them, or they could be with real debt collection that’s just not being conducted properly. Either way, if you receive a surprise debt collection notice, know that you have rights that you can exercise to protect yourself. After you’re first contacted by a collection agent, the debt collector must send you a written notice regarding the debt, and you have 30 days to dispute the debt with a debt verification letter. Furthermore, collection agents cannot use threatening language with you, cannot contact you at odd hours (before 8 a.m. and after 9 p.m. local standard time) and cannot contact you at work if you say they are not allowed to.

Meanwhile, reported cases of identity theft increased in 2018, with the most prevalent form of identity theft being new credit card account fraud. As its name indicates, this is when an identity thief opens a new credit card account using your personal information. Certain categories of identity theft saw significant growth last year, most notably federal student loan theft (which rose 119%), medical service theft (103%) and business and personal loan theft (82%). On the bright side, tax-related identity theft has been decreasing since 2015, and last year it was down 38% compared to 2017 with a total of 38,967 reports. That said, it remains one of the most common scams in the identity theft world, so it’s still something to watch out for. To protect yourself against identity theft, some good general practices are to check your credit reports and financial statements regularly, keep your credit frozen and practice good cybersecurity habits. You may also want to consider signing up for an identity theft protection service to help monitor your credit and assist you with recovery if your identity still gets stolen.

Be cautious of phone calls and wire transfer requests

The Consumer Sentinel Network report also contains statistics regarding how scams are initiated, as well as the most popular payment forms among scammers. The data indicates that fraud was most often initiated over the phone, with 69% of fraud complaints last year citing a phone call as the scammer’s first form of contact. However, by far the most effective form of contact was consumer-initiated contact, where a scammer tricks a victim into reaching out to them. Though it only figured into 5% of scam reports, 71% of the people who reported a consumer-initiated contact scam also lost money to it. Even when you’re reaching out to another party, you should still be on guard for a scam if you don’t know them well. For comparison, only 8% of the consumers who complained about fraud initiated by phone call actually lost money to those scams.

Additionally, the most frequently requested payment method from scammers was wire transfer, as money sent through wire transfer services, such as Western Union, is often difficult to trace and hard to get back once the scammer picks up the cash on the other end. After wire transfers, the next most common requested payment method was credit cards. Compared to wire transfers, credit cards are a much safer payment method for consumers and have a variety of protections against unauthorized purchases, so hopefully many of those scam victims were able to get most of their losses back. As such, it’s a good idea to brush up on your rights and your credit card issuer’s rules when it comes to your liability for fraudulent transactions.

The Consumer Sentinel Network Data Book also contains reports on individual states, so if you’re interested you can read it for free and see what scams you should watch out for locally. There are a lot of different forms of fraud, but by preparing yourself for the most common scams you can drastically increase your chances of staying safe. For more on defending your wallet and identity from criminals, visit our scams blog.