One of the most common scams in the U.S. and Canada today involves callers pretending to be government officials. Some claim to be tax officials and representatives from the Social Security Administration or Service Canada; others claim to be law enforcement officers and threaten legal consequences. All of them use fear and intimidation to trick victims into turning over personal information or money, often in the form of gift cards.
A new investigative study by Better Business Bureau (BBB) finds that while the number of government scam reports has fluctuated, scams have become more diverse and more sophisticated. Also, many scammers have taken advantage of the coronavirus (COVID-19) pandemic by posing as Centers for Disease Control and Prevention (CDC) officials, Internal Revenue Service representatives who can expedite economic impact payments or contact tracers employed with local government agencies. The investigative study — Government Impostor Scams: Reports Decrease, Scammers Pivot for New Opportunities, BBB Study Reveals — highlights the risk of this common but costly fraud. Read the full study at bbb.org/fakegov.
A recent AARP survey found that 44 percent of people in the U.S. have been contacted by one of these impersonators. Law enforcement officials have received hundreds of thousands of complaints. Complaints to the Federal Trade Commission (FTC) report $450 million in losses since 2015. Many of these scams involve robocalls and most commonly originate from India, where call center expertise is plentiful.
“Government impostor scams are constantly evolving, and they prey on people with threats of being arrested if money is not paid or personal information provided,” said Julie Wheeler, BBB Serving Western Virginia President and CEO. “Consumers need to know how to recognize and avoid this upsetting and costly fraud.“
In 2019, BBB reported about scammers impersonating tax officials dropped sharply while reports about Social Security Administration (SSA) impersonators quadrupled in the U.S. BBB Serving Western Virginia has seen an increase of government imposter scams reported in 2019. Though the total dollar loss from victims has dropped by 54 percent from 2017 to 2019 ($11,850 to $6,500), scammers continue to target residents in the western Virginia area. Since January 2020, BBB Scam Tracker reports 39 reports government imposter scams.
According to FTC’s Consumer Sentinel Network 2019 Data Book, imposter scams are the most reported scam type, accounting for 20 percent of all scams in Virginia. Thankfully, zero dollars loss have been reported by consumers to BBB Scam Tracker from our service area in 2020. In many cases, scammers insist they are law enforcement officers and threaten to arrest people immediately if they do not pay money, usually with gift cards. They may tell consumers their Social Security number has been associated with a crime or may threaten to deport recent immigrants or arrest people for missing jury duty.
A Roanoke man reported to BBB Scam Tracker in July 2020 that he had received a robocall from an unknown phone number. The anonymous caller left a voicemail, which stated, “before we begin with legal proceedings, call back at the earliest.” The man returned the call to the listed number. A person with a “thick eat Indian accent” answered the phone, asking his name and informed him there had been some illegal activity with his social security account and it would be suspended. The SSA government imposter threatened the caller that he would no longer receive a social security check and began asking for personal identification information like date of birth. The man told the caller that he knew it was a scam and the caller hung up.
Other reports in BBB Scam Tracker show scammers explaining to callers that their Social Security number has been linked to crime reports in a nearby state or surrounding area and they needed to pay nearly $10,000. Other scam callers lure victims with the promise of a “free” government grant, which they claim will be awarded if the victim pays a fee with a gift card or prepaid debit card. In reality, there is no grant.
Impostor calls from India must first go through a “gateway carrier” in the U.S. These carriers often provide both “spoofed” phone numbers that appear on caller ID and return phone call numbers for voicemails that seem to go to locations in the U.S.
The Department of Justice recently sued two of these carriers while the FTC and Federal Communication Commission issued warning letters to others. As a result, robocalls and individual calls coming from India have declined drastically over the last several months. Other law enforcement efforts in the U.S. have led to the arrest of dozens of Indian nationals for laundering money related to these scams. However, the study notes that cases are rarely prosecuted in India.
The report recommends:
● Efforts to prevent fraud calls to the U.S. have shown promising results, and the telecom industry should continue efforts to stop illegal calls and to end caller ID spoofing. Legislation may be needed to address the problem of gateway carriers.
● The government of India should do more to prosecute and extradite those operating frauds from that country.
● Law enforcement should continue to take action against scammers who are physically present in the U.S.
● Efforts by many retailers and banks to question people buying gift cards have had limited success in stopping the purchase of gift cards to pay scammers. The gift card industry and retailers should explore additional ways to stem fraudulent use of their products. How to complain about government impostor scams:
● IRS: The Internal Revenue Service advises people to fill out the “IRS Impersonation Scam” form on the Treasury Inspector General for Tax Impersonation’s website, tigta.gov, or call TIGTA at 1-800-366-4484.
