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Phone Scams: Beware of These 8 Common Telephone Scams



21 Aug 2015

Scammers target the elderly

Phone scams are no joke. Scammers target millions of Americans every year via robocalls. Many people fall victim to scams for guaranteed free vacations, offers on medical supplies, or other products. A common scam plays upon fear when the scammer threatens arrest for unpaid debts or tax bills.

One of the most infamous phone scams, the IRS scam, has stolen over millions of dollars from Americans over the years. In 2019, the IRS published an updated list of their yearly "Dirty Dozen” scams, warning people to be vigilant year-round of IRS phone calls.

Any caller that demands the release of personal information, including birthdate, Social Security number, credit card number or bank account number, is a scam. A government agency will never call people over the phone nor send emails. Likewise, no legitimate entity demands payment via wire transfer, gift card, or Bitcoin transaction.

At CallerSmart we see a wide variety of phone scams, and thanks to our vigilant users, we can help spread the word about these scams. Here are the 8 most common phone scams:

1. Free Vacations and Prizes

In 2017, the Federal Trade Commission received over 142,000 reports of this type of fraud, with a total loss of $95.05 million. The fraud was conducted through aggressive phone tactics. It goes something like this: You finish your day at work, and you discover a voicemail from an unknown number: "Congratulations! You've won a free cruise to the Bahamas! To claim your reward..." Chances are, like most things, this is too good to be true. The free prize, Disney trip, Caribbean cruise, dream vacation, etc. is a common scam. The prize might change, but the scammers still want the same thing: your personal info and money.

A major red flag to watch out for with these free trip phone scams is if they ask you to pay a small fee to collect your prize. If you win something, you shouldn't have to pay for it. Also, recognize that you won't win a sweepstakes that you didn't enter.

Another variation of the free trip or reward scam is the Jamaican lottery scam, which specifically targets the elderly. You can learn more about the Jamaican lottery scam and how to prevent it in 5 easy steps. 

2. Phishing Scams

Fraudsters use phishing scams via email or websites, but there are also phishing calls that try to convince you that there's an issue with your computer. These scammers will make you think that your computer and privacy is at risk to get information out of you or to get you to download malicious software that can steal your information.

Most companies like Microsoft won't call you out of the blue. If you do get a call where a person is saying that you're at risk, ask them for their information, and say that you'll call back. Once you've hung up, you can check with the company they said they were calling from to see if there really is an issue with your computer.

3. Loan Scams

What do auto loan, student loan, small business loan and payday loan phone calls all have in common? They're all typically scams.

Whenever you get a cold call from a telemarketer, it's smart to be suspicious, especially when they are offering you money and asking for information.  If you feel that you've gotten a call from a loan scammer, you can file a report with the FTC. CallerSmart's caller ID app has instructions on how to file a complaint and get yourself on the FTC Do Not Call List.

4. Phony Debt Collectors

Equally as annoying as loan scammers, but a bit more discouraging because of the threats they can make, phone debt collectors can be a serious problem. If you get a call from a debt collector, ask for the representative’s name, number, and company information. Then end the call. After that, you can check with your creditor about the calls to verify if the debt collector is real.

The FTC gives excellent guidelines on what to do regarding harassment from fraudulent debt collectors. The number one thing to do is to refuse to give, or verify, any of your personal information out. Ask for the caller's information and require written notice of your debt.

Interesting fact: If you send a written letter asking a debt collector to stop calling you, they can no longer legally call you.

5. Fake Charities

Charity scams continue to grow. In 2017, the FTC reported over 3,000 calls totaling a loss of $2.54 million.

Sadly, some people feel they have nothing better to do than pose as fake charities and scam people out of money. One of the most common fundraiser telephone scams involve people pretending to collect money for local police and fire departments.

Before you give out any personal information or even think about donating, ask for the caller’s information and the details of the charity, then hang up. Afterward, check with your local police or fire department to verify any fundraising efforts.

Calls include more groups than fake police and fire departments. In 2015, the FTC filed a civil complaint against four supposed cancer charities. These charities stole nearly $200 million from Americans; their success in large part was due to aggressive telemarketing tactics. Scams also include natural disasters, COVID-19, and various human interest events.

Before you decide to donate, it’s always a good idea to do some information digging to make sure you know where your money is going. There are websites, like the Better Business Bureau Wise Giving Alliance, that can help you check out charities to make sure they’re legitimate. To learn more about fake charity scams, check out our 5 simple ways to protect against charity phone scams.

6. Medical Alert Scams and Other Scams Targeting Seniors

Seniors are especially vulnerable to phone scams because scammers target them the most. A common senior scam offers free medical alert systems. Much like the free giveaway scams, medical alert phone scams ask for personal information. 

Most recently, con artists have focused on Social Security scams. The caller says the senior’s Social Security number has been suspended due to a past debt or has expired. The caller requires personal information to verify the account. There is a fee attached to have the SSN renewed and/or the debt lifted. The scam is entirely fake as a SSN never expires, nor are they suspended. Additionally, the Social Security Administration doesn’t make phone calls; it communicates via mail. The same goes for Medicare. If you receive a call from Medicare, which is rare, hang up and call the main number: 1-800-MEDICARE (1-800-633-4227).

It’s best to just hang up on these callers whether they’re offering free medical systems, discounted prescriptions, or making threats. If the DEA had a warrant out on you, they wouldn’t call you. However, this is a common scam aimed at making people panic and react quickly.

7. Warrant Threats

Similar to the IRS scam, calls threatening arrest can cause extreme distress. Scammers design the phone calls to make people panic. The caller claims that the target is guilty of one of the following:

  • Past due bill
  • IRS tax debt
  • Unpaid fine or ticket
  • Failure to appear for jury duty
  • Reports of criminal actions

You or someone you know might have received phone calls from someone claiming to be the sheriff’s department, or DEA, or even the FBI. When you get calls like this, don’t trust them.

CallerSmart can automatically block scam calls, but we, unfortunately, can't block all scam numbers; there are just too many. You can also manually block numbers with our guide on how to block calls on your iPhone. Our crowdsourced information can also help you quickly identify scammers. Remember that law enforcement will never call to demand you to send them money.

8. IRS Calls

Imposter scams rank highest on the list of reports made to the FTC. In 2017, nearly 350,000 reports showed a total loss of $328.42 million to imposter scams. The most common and publicized imposter phone scam is the IRS scam. Robodialers call thousands of people daily, trying to catch them in this scam. The standard scam involves telling the victim that a tax debt is due. If the debtor does not pay immediately, he will be arrested and fined. The caller insists on verifying the taxpayer’s information, which can lead to identity theft.

Two new IRS scams involve the Taxpayer Advocate System (TAS) scam and the COVID-19 Economic Impact Payment scam.

The Tax Advocate (TAS) scams involve con artists attempting to convince people that they work for the independent agency attached to the IRS. The TAS operates under the auspices of the IRS to help taxpayers find solutions to federal tax issues. In this scam, the fraudster requires verification of identification, including name, address, phone number, and social security number. Scammers try to convince people to pay fake tax debts and to give up personal information they will use for identity theft or other nefarious purposes.

The second scam variation revolves around the Coronavirus. The CARES Act is a $2 trillion economic relief package designed to protect the American people from the impacts of COVID-19. Scammers take advantage of this act in two ways: The first is a typical scheme to retrieve sensitive information from victims. The second involves sending checks to individuals with the request to return part of the funds for overpayment. Know it's a fake check. The victim ends up owing the bank the initial amount of the check plus any fees.

These scammers can be incredibly convincing as they often know your name and the last 4 digits of your social security. However, the real IRS will never request immediate payment from you over the phone, we've also created five easy steps to help you identify IRS scam calls. Report any contact made by an IRS scammer to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484.

Stay Educated

These are the 8 most common scams that we’ve come across, but we are sure that there are more out there, and new ones will continue to pop up. The FTC shows that only a small percentage of phone scams get reported, and only a small percentage of those scams report a financial loss. It’s difficult to say how many scams go unreported due to a lack of information or embarrassment.

The best thing that you can do is stay educated, warn others out there about scam callers, and report them to the FTC

If you have an iPhone you can download CallerSmart's reverse phone lookup app to search mysterious numbers that call you and help warn others about potential scams. If you don't have an iPhone, you can still warn others and look up unknown phone numbers on our website.

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