Impersonation Scams Net Fraudsters $1.1bn in a Year

Impersonation fraud losses have surged three-fold over the past three years to exceed $1.1bn in 2023, according to new figures from the Federal Trade Commission (FTC).

The consumer protection agency revealed yesterday that it received 330,000 reports of business impersonation scams and nearly 160,000 reports of government impersonation last year – amounting to half the fraud reports lodged with it in the period.

Over the period 2020-2023 the share of email and text-based scams rose sharply, while those conducted via the phone dropped similarly abruptly. Phone-based impersonation attempts used to comprise 67% of the total, but that figure is now 32%. Meanwhile, email scams soared from 10% to 26% over the period, and text-based impersonation fraud increased from 9% to 14%, the FTC said.

At the same time, reported losses through bank transfers soared from 21% to 40% and via cryptocurrency from 6% to 21%. The combined methods accounted for $593m in losses to scammers last year, the FTC said.

Read more on impersonation fraud: New ‘Pig Butchering’ Scam in West Africa Impersonates US Financial Advisors

The agency warned that fraudsters are increasingly impersonating more than one entity in a single scam.

“Reports show an increasingly blurred line between business and government impersonation scams: many scammers impersonate more than one organization in a single scam – for example, a fake Amazon employee might transfer you to a fake bank or even a fake FBI or FTC employee for fake help,” the report claimed.

Top Five Impersonation Scams of 2023

The FTC warned of the following top five scams, which accounted for nearly half of all reports in 2023:

• Account security alerts, which could come from a spoofed tech firm, a bank or other trusted party. Typically they will ask the victim to call a phone number or text back a response which will help to reel them in
• Automatic subscription renewals which the victim is forced to ‘cancel.’ Sometimes they’ll try to connect to the victim’s machine, claiming that’s the only way to process a ‘refund’
• Fake giveaways and discounts, which usually entail the victim being forced to pay a charge in order to ‘claim’ the money on offer
• Problems with the law where the victim is informed their identity has been used for a serious criminal offense. The fake government official will then claim the only way to remediate the issue is to send money or gift cards
• Delivery issues with a non-existent parcel, which may require the victim to enter their bank details or pay a small fee to resolve