FTC Warns Against Rise of Text Message Scams - What to Watch Out For
Scammers are everywhere these days. There is no escaping. And, as the Federal Trade Commission (FTC) has recently warned, bogus text messages are becoming their latest vehicle of choice. An analysis the agency just published found consumers reported losing $330 million to text message scams in 2022, with a median reported loss of around $1,000. That total is more than double the reported losses in 2021 and almost five times that reported in 2019. Given the vast majority of frauds are not reported to the government, these figures significantly understate the losses consumers actually have suffered from text messaging fraud.
According to the FTC, “texting is cheap and easy, and scammers are counting on the ding of an incoming text being hard to ignore.” Referencing a Federal Communications Commission report, the FTC noted text message open rates are estimated to be as high as 98%, and response rates as high as 45%. These are far higher than email open and response rates of 20% and 6%, respectively. The FTC further noted that more than half of consumers text daily, making texting more common than any other communication method, including voice or email.
As to why these scams work, the FTC highlights the central attribute of texting — speed. “Scammers use the speed of text communication to their advantage: they hope you won’t slow down and think over what’s in the message.” There is also that hard-to-resist lure of money, a special gift or vacation, or perhaps even a job. And they commonly claim to come from well-known and trusted businesses. The FTC urges us all to wisen up to these too-good-to-be-true swindles. They are “all lies and ways to take your money and personal information.”
Here are the top five text message scams consumers reported last year.
- Fake Bank Fraud Alerts. These are texts claiming to come from a bank reporting about supposed suspicious activity. You might get a fake number to call back or be asked to reply with a Yes or No to verify a particular transaction you did not make. If you follow up you will get a call back from the fake bank’s fake fraud department. From there, they will dive deep into your personal information, and what you thought was your bank helping you retrieve stolen funds will actually result in the transfer of significant funds from your account.
- Fake Gifts. These are texts about a free gift, reward, or prize, often pretending to be from a company you know — like your cell phone company, a big retailer, or in many instances Amazon. Just click the link and pay a small “shipping fee” and the gift is yours. But instead of receiving your valued freebee, you will instead open yourself up to a stream of fraudulent charges from the credit card information you provided.
- Fake Package Delivery Problems. These are texts pretending to be from the U.S. Postal Service, FedEx, or UPS claiming a problem with a delivery. They link to an official-looking website calling for a small “redelivery fee,” which again is just a trick to get your credit card information, which again opens you up to a stream of fraudulent charges to come.
- Fake Job Offers. Mystery shopping at well-known stores like Whole Foods and Walmart. Driving around with your car draped in ads. Job offers coming from posted resumes on employment websites like Indeed. These are among the most common “easy money” scams the FTC highlights. They are all about tricking people into spending money for some kind of made-up job-related purpose.
- Fake Amazon Security Alerts. Similar to the fake bank schemes, these scams involve texts purporting to be automated fraud prevention alerts from Amazon, often asking you to verify a fake purchase. Calling the number in the text connects you to a phony Amazon representative who offers to “fix” your account who instead dupes you into providing personal information, with fraudulent transfers to follow.
So what can you do to make sure you do not end up on the other end of one of these schemes? The FTC offers two simple solutions. First, never click on links or respond to unexpected texts. If you are not sure about the legitimacy of the inquiry, contact the company through a website or phone number you know is real. Second, screen out unwanted texts through the techniques the FTC describes here. The FTC also can help you recover money you have lost to a scammer.
The bottom line in all this is you are not helpless in fending off these kinds of scams. A bit of vigilance and commons sense can make all the difference. And if you end up getting hoodwinked anyway, there is at least one government agency that will do what it can to make you whole.