As the world gets more tech-savvy, unfortunately, so do the scammers. So while you may be aware of some common scam tactics and how to avoid them, if you want to keep your wallet protected, it’s critical to keep up with how the fraud game is changing every day.
We told you about a lot of hot scams in 2015, including various email and tech support scams, Facebook hoaxes, credit card chip scams and the infamous IRS phone scam. And while these likely aren’t going away, there are some new trends in the world of identity theft and phone fraud that you need to know about.
Consumer Reports spoke to David Dewey, director of research at Pindrop Security, a firm that provides anti-fraud detection technology for call centers and phone users, about the new trends we should expect to see in 2016 and how consumers can avoid them.
New scams to avoid in 2016
1. IRS phone scam & new types of government imposters
The IRS phone scam was a big one in 2015 — and it’s just as bad as ever in 2016! It involves IRS impostors calling people and demanding immediate payment. In some cases they’re also impersonating local law enforcement and threatening people with immediate arrest unless they send untraceable money amounting in the thousands of dollars for back taxes that you supposedly owe.
The way scammers convince people is by using phone spoofing, which makes the number they call from show up as ‘IRS’ on the caller ID. If the scammer already has the last four digits of the person’s Social Security number — it makes them sound pretty legit.
Here are some of the tactics used by these scammers:
- They use common names and fake IRS badge numbers.
- They send bogus IRS e-mails to support their scam.
- They call a second time claiming to be the police or department of motor vehicles, and the caller ID again supports their claim.
- You’re told to submit payment either by wire, credit card or by prepaid debit card.
The IRS will never call you and demand immediate payment, ask for credit or debit card numbers over the phone, or threaten you with imprisonment.
But consumers who know that the IRS only contacts people via snail mail are one step ahead of the scammers, knowing that if they get that phone call, it must be a fake.
The new concern
A new provision included in the Congressional budget bill allows debt collectors to use robocall technology to contact anyone who owes a government debt, such as overdue federal student loans and Fannie Mae and Freddie Mac mortgages.
Now that a government agency can officially contact consumers by phone, it opens up a lot of new opportunities for scammers.
Buried in the Congressional budget bill was a provision allowing debt collectors to use robocall technology to pursue anyone owing government debt—think overdue student loans and Freddie Mac and Fannie Mae mortgages.
“We expect to see a spike in scammers targeting overdue student loans, Freddie Mac and Fannie Mae mortgage debt—things other than just taxes,” Dewey told Consumer Reports.
How to avoid it
Even if the name and number on the caller ID appear to be legit, don’t trust it!
“If someone calls to collect money, tell the caller you want to conduct the transaction in person and that you will come to his office,” says Dewey. “That almost always shuts down a scammer. If he’s legitimate, he’ll give you an address.”
2. A new kind of political scam
It’s an election year, so you can expect the political spam calls to start coming in. But according to Dewey, consumers should be on the lookout for a new type of political scam.
How it works
Scammers use the method of phone spoofing that’s used in the IRS phone scam in order to get a candidate’s phone number to show up on the caller ID — that way it looks like a legit call from a political campaign. When you answer, you’re invited to join a virtual ‘town hall’ meeting with the candidate, and to make it sound even more convincing, the scammers may piece together audio from the actual candidate or use a voice impersonator.
Then comes the call to action: press #1 to make a donation (or something along those lines). At that point, you’re asked to enter your credit card number — and while it all sounds legit, you’ve just handed over your financial information to some unknown source.
How to avoid it
Whether it’s someone claiming to be from a political campaign or anyone else, never give out your financial or other personal information over the phone. If it’s an unsolicited political call, there’s no way to verify who is actually on the other end. And that goes for any other caller asking for a donation or claiming you owe money.
Read more: 9 places to never use a debit card
3. Data breaches
It’s difficult these days to go even a week without hearing about a new data breach. And experts say it’s not just credit cards the hackers are after anymore.
More ‘sophisticated’ breaches
Hackers are now trying to steal any personal information that can be used in more complex forms of identity theft. These are more sophisticated attacks that can be carried out over time and potentially go unnoticed for longer periods of time — by stealing information, piece by piece, that isn’t directly linked to a financial account.
“The [hacked] information is not directly financially related, but becomes a stepping stone to a financial motivator,” says Dewey.
How to avoid it
Any website that stores your personal information is another opportunity for hackers and thieves. According to Dewey, ‘sharing economy’ sites and services like Uber and AirBnB are becoming more popular targets for scammers.
Here are a few ways to protect yourself from data breaches:
- Never give out your Social Security number at these places.
- Limit the personal/financial information (including your Social Security number) that you give to your doctor’s office and other medical providers. Here’s more on why.
- Check your financial statements and accounts daily.
- Use this tool to check if your email account has been breached.
4. Mobile wallet hacks
According to Consumer Reports, scammers have been a little stumped by the new protections of chip-enabled credit cards — but of course, it hasn’t stopped them.
Potential vulnerabilities of mobile wallets
Mobile wallets and other mobile payment sources such as Apple Pay, Google Wallet, Samsung Pay, Android Pay, PayPal, Venmo and others, are becoming increasingly popular ways for consumers to pay for pretty much anything.
The problem is that there a lot of different ways for scammers to exploit these sources.
Here’s one recent example: Identity thieves used people’s credit card information that they had already stolen to set up Apple Pay accounts on stolen iPhones. If verification was needed from the bank, no problem — the scammers had already stolen all of the personal information they needed ahead of time.
Once that’s done, the thieves can then use Apple Pay to empty your account or post false charges.
After doing his own investigation (don’t worry, only as an example), Dewey said, “It’s amazing how easy it was to add somebody else’s credit card info to my Apple Pay account.’
How to protect yourself
With new technology always comes new vulnerabilities, new loopholes and new ways for hackers to get into our personal lives.
This is why Clark suggests checking your financial accounts daily, in order to catch any potential fraudulent activity as soon as possible.