Compliance Blog

Categories: Accounts

Imposter Scams Surpass Identity Theft Consumer Complaints

Imposter scams are a serious and growing problem, being the second most reported by consumers in 2016 as reported by the Federal Trade Commission's (FTC) annual data book summary, Consumer Sentinel Network Data Book for January - December 2016.  What exactly is an imposter scam?  When a person pretending to be a friend, family, romantic interest, computer technician, a representative of a company or government agency persuades the victim to send money or reveal personal information.  According to the FTC report, complaints included: scammers posing as friends or relatives stranded in foreign countries without money; scammers claiming to be working for or affiliated with a government agency; scammers claiming to be a computer technician offering unnecessary software services; and scammers claiming to be affiliated with a private entity (e.g., a charity or company).  Imposter scams also topped the list of complaints from military consumers followed by identity theft complaints.  The most widely reported method of payment for money lost to fraud was by wire transfer. Of those who noted in their fraud complaint how they were first contacted, 77 percent said it was by phone. 

Although debt collection complaints declined slightly between 2015 and 2016, it still was the top consumer complaint category.   The top ten complaint categories for 2016:

  1. Debt Collection   
  2. Impostor Scams
  3. Identity Theft
  4. Telephone and Mobile Services
  5. Banks and Lenders
  6. Prizes, Sweepstakes and Lotteries
  7. Shop-at-Home and Catalog Sales
  8. Auto-Related Complaints
  9. Credit Bureaus, Information Furnishers and Report Users
  10. Television and Electronic Media

Ranking as the fifth consumer complaint category, complaints against financial institutions made up 5 percent of the more than 3.1 million complaints collected in 2016. The FTC report identifies this type of complaint as ranging from: deceptive or predatory mortgage lending practices; problems with modification of mortgage terms; miscellaneous customer service and account issues with bank or credit union products, including payday loans, student loans, auto title loans, fees and overdraft charges; other finance company lending products, services and practices; etc.

The data book summary provides a detailed breakdown of the top ten consumer fraud and other complaints along with the top six identity theft type complaints for each state and the District of Columbia.  This data comes from consumer complaints made directly to the FTC as well as those received by state and federal law enforcement agencies, national consumer protection organizations and non-governmental organizations.

Remember your credit union members are being targeted by these imposter scams so it's helpful to keep abreast of trends.  Fraud prevention is also on NCUA's agenda as it's a supervisory priority focus for 2017

About the Author

Shari Pogach, NCCO, NCBSO, Regulatory Paralegal, NAFCU

 Shari Pogach, NCCO, NCBSO, Regulatory Paralegal

Shari R. Pogach, NCCONCBSO, has served as Regulatory Paralegal for NAFCU's Regulatory Compliance and Regulatory Affairs divisions since 2007.

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