What Is Phone Fraud and How to Combat It

According to the Federal Trade Commission data, phone fraud led to the highest financial loss per consumer in 2022. With Americans spending 4 hours and 25 minutes on their phones daily, mobile devices have become a useful channel for criminals to access potential victims. This has led to a surge in crimes instigated via calls, SMSs, WhatsApp messages, and other similar methods.

But what types of phone scams can you encounter, and how can you avoid them? Keep reading to find out.

Understanding Phone Fraud

Phone-related fraudulent activities are varied in nature. Common ones include:

• Automated calls

Robocalls are inexpensive and, as a result, have become one of the most-used tools by criminals. In fact, consumers received a staggering 50.3 billion of them in 2022. Scammers frequently use automated calls to identify genuine numbers, record voice prompts, and extract personal information.

• Vishing and smishing

Vishing is short for voice phishing, and smishing stands for SMS phishing. Both are common tactics for tricking phone users into disclosing identifiable data.

• IRS imposters

These scams involve impersonating the Internal Revenue Service and calling taxpayers to demand overdue taxes.

• Charity scams

Fake charities can call you asking for donations, especially during floods, hurricanes, and other natural disasters. Even the pandemic times saw a surge in this type of fraud.

• Lottery and sweepstakes scams

Malicious actors could call to announce that you have won a large sum of money or some other valuable reward from a lottery or sweepstakes. But to claim the prize, they will ask you to pay for processing fees, tax, and insurance.

• Emergency scams

These often involve a call from a fraudster impersonating a friend or family member. They could, for instance, state they are stranded in a remote country with no cash or credit cards and ask you to wire money so they can get back home safely.

You can experience any of these frauds in different contexts, but ultimately, the result is financial loss or identity theft. The latter can lead to more complex repercussions when criminals use your identity to carry out varied scams.

Protecting Yourself Against Phone Fraud

Here are essential measures to combat phone-related swindles.

Identify warning signs

Telltale signs of a scam can include:

• Unexpected calls from private or public organizations you typically deal with, such as your bank, IRS, insurance provider, or utility service.
• Unsolicited calls and messages, including those involving marketing promotions and charitable donations.
• Calls that offer unusually attractive rewards and products, from steep discounts to instant loans.
• Robocalls that ask you to press a key or say “yes” or “no” to select a menu option or to provide consent.
• Payment methods that are hard to reverse or track.
• Unusual requests for personal information. These may include your contact details, SSN, bank account numbers, and account usernames and passwords.
• Undue pressure to make a payment, purchase a product, or donate money.
• Manipulation tactics that use fear, panic, greed, or empathy.

Build awareness of standard procedures

When you know the standard working procedures of consumer-facing organizations, it is easier to identify fraudulent schemes. For example:

• Banks never verify customer details or ask for account login credentials over the phone.
• The IRS would not call taxpayers about overdue taxes without prior written notice. Neither would they use threats to get you to make payments.
• Legitimate charities would allow you to take your time to decide whether you want to donate.
• The lottery board would deduct withholding taxes from the prize money instead of asking winners to pay for taxes separately.

Each organization will have its own policies and work procedures. However, they will always respect consumer data privacy and safety and will not use unethical practices that would negatively reflect on them.

Avoid unsolicited calls and messages

• If you receive an automated call, hang up. Never follow instructions or call back.
• Don’t answer calls when you don’t recognize the number. Especially avoid one-ring calls.
• Block spam and scam calls to prevent them from reaching you again.
• Never respond to unsolicited messages or engage in conversations with strangers on messaging apps such as WhatsApp.
• Ignore SMSs and messages containing unverified links, even if you receive them from someone you know. Also, avoid circulating them among friends and family.
• Register your phone number with the FTA’s Do Not Call Registry. This should prevent telemarketers from contacting you.

Verify callers

Impersonation tactics are prevalent in phone-related fraud. Therefore, verifying whom you are conversing with is important before you take any action.

• Search the number on PhoneHistory to find information about its registered owner. Look for any unusual activities, including recent registrations and mismatches in the name and other details.
• Use an official number to call back the organization that contacted you to ensure the call originated from one of its staff.
• If a loved one contacts you from an unfamiliar number, hang up and call them on their regular phone number.

Secure your mobile device

• Set up anti-virus software to prevent malware threats.
• Keep all phone software up-to-date with the newest security patches.
• Minimize app usage, and always download mobile applications from reputed app stores.
• Avoid apps that request an unnecessary amount of data access.
• Log out of accounts when not in use.
• Never save passwords on your device or browser.

Report incidents

• Flag scams, spam, and robocalls with the FTC. You can also report telemarketers after 31 days of registering with the National Do Not Call Registry.
• If you notice unusual or suspicious behavior during a call from a business or government entity, alert the relevant organization.

Wrapping Up

As long as you have a phone, you are constantly exposed to a variety of phone-related fraud—from automated calls and IRS imposters to vishing, smishing, fake lotteries, and emergency scams. The threats are diverse and can result in financial loss and identity theft. So, remaining vigilant and protecting yourself is critical.

Start by learning to identify the typical warning signs of phone fraud. Build awareness of standard work procedures and policies of consumer-facing organizations so you are better equipped to detect deceptive activities. Also, avoid unsolicited calls and messages, verify the identity of callers before acting on their requests, and protect your mobile device from malware and hacking threats. Moreover, inform the relevant organizations if you come across any suspicious actors impersonating them.