New BBB Study Reveals Scammers Impersonating Government Agencies Spiking

Scammers Use Threats and Fake Grants

Rockford, IL – June 2, 2022 – A new Better Business Bureau® (BBB®) study update released today shows scammers are pretending to be the Social Security Administration, IRS, Medicare or some other government agency to trick you out of money. They threaten arrest if you don’t give up your bank account info to pay a fee right away. Con artists also might say you are eligible for a government grant, but a fee is required to obtain it.

"These are all scams, do not respond to these impostors,” says Dennis Horton, director of the Rockford Regional Office of the Better Business Bureau. “The con artists want your money and personal information to steal your identity. BBB is warning the public to use caution if they are contacted by a government agency demanding money or offering a government grant for a fee.”

BBB Scam Tracker data showed victims of government grant scams lost more money in 2021 than in the previous year. The median loss in government grant scams rose from $800 to $1,000, making it one of the more expensive and eighth riskiest scam reported to Scam Tracker in 2021, according to BBB Institute for Marketplace Trust’s 2021 BBB Scam Tracker Risk Report. Scam Tracker reports also showed government impostor scams as the second-most reported scams by businesses in 2021.

How do I know if I'm being scammed?
Scammers may spoof a legitimate government agency phone number in government impostor schemes to call a potential victim. The scammer threatens arrest if the consumer fails to comply with their requests. Scammers typically ask for payment in gift cards to rectify the problem. Social Security Administration (SSA) impersonators warn the targeted individual that their identity has been stolen and ask them to verify their social security number and other personal information. Ironically, the individual may then actually become a victim of identity theft. Fake Internal Revenue Service (IRS) callers threaten arrest unless back taxes are paid.

In government grant fraud, scammers contact the consumer using an acquaintance's hacked social media account. The consumer is told about a lucrative grant program that only costs a small fee to receive. Once the first payment is sent, the scammer continues to add various fees. The consumer never receives the grant and loses whatever money and personal information they sent to the scammers.

While gift cards are still the method of payment of choice for scammers, more are beginning to turn to cryptocurrency.

Social Security scams are the most reported, most expensive
No agency is more popular than the Social Security Administration when it comes to government impostor scams. More than two-thirds of the government impostor scams reported to BBB Scam Tracker in 2021 mentioned Social Security. Consumers who reported to Scam Tracker in 2021 lost a total of nearly $500,000 in these SSA scams.

Reports show the most common Social Security-related scam involves arrest threats. Posing as law enforcement, the scammer calls and threatens the intended victim with immediate arrest if they do not comply with the scammer’s requests. The scammer may claim that the victim’s Social Security number has been compromised and used in a crime.

Stop and think when you are called in the name of the law
Almost all government impostor scams use a law enforcement angle, with some directly impersonating law enforcement agencies. In these cases, they have a fairly high success rate. FTC statistics show that more than one in five people who reported a law enforcement impostor scam lost money, with a median loss of $3,000 last year.

With the federal government issuing billions of dollars in relief funding during the pandemic, scammers took full advantage by making up various grant programs.

The biggest hurdle for those trying to prosecute these scammers is that most of the perpetrators are overseas.

BBB Tips to avoid government impostors or government grant scams

• Government agencies like the Social Security Administration, IRS or FBI do not call people with threats or promises of money.
• Do not trust your caller ID, as scammers can spoof legitimate numbers. If you receive a phone call, check with the real agency by going to the agency's website directly, then click contact us to find out how to connect.
• Do not click on links inside a text message or email purporting to be from a government agency.
• Social Security numbers are never “suspended.” The Social Security Administration will never threaten to arrest you because of an identity theft problem.
• Never provide your bank account or other personal information to anyone who calls you claiming to be associated with the IRS. The IRS generally makes its first contact with people by regular mail – not by phone – about taxes.
• Never pay with a gift card, wire transfer, or cryptocurrency. No government agency will take those forms of payment.
• Don't pay for a "free" government grant. It isn't free if you must pay money for a "free" grant. Go to Grants.gov for lists of official grants.

How do you report a suspicious email or call?

• Better Business Bureau – File a report with BBB Scam Tracker.
• Social Security – The Social Security Administration Inspector General has its own online form for complaints about frauds impersonating the SSA.
• IRS – The IRS advises people to fill out the “IRS Impersonation Scam” form on TIGTA’s website, tigta.gov, or call TIGTA at 1-800-366-4484.
• Federal Trade Commission – 877-FTC-HELP or http://www.ftc.gov.
• Your cellphone carrier – Carriers may offer free services such as scam call identifications and blocking, and ID monitoring,
• Facebook – click on the three dots at the top right on any post. Select “Find support or report post” to report scams.

For more information If you've been the victim of a scam, whether or not you lost money, please report it to BBB Scam Tracker immediately. Your report will help alert others to the danger. Sign up for BBB's free consumer newsletter, BBB Edge, at BBB.org/ChicagoBuzz. Visit BBB.org to find businesses you can trust. About BBB:
BBB of Chicago and Northern Illinois is a nonprofit organization that has served both consumers and trustworthy businesses for 96 years and is a part of the IABBB. We help protect consumers from scams and provide a free database for consumers to see business ratings and reviews to find businesses they can trust. We connect customers to businesses they can trust. BBB is the sign of a better business. The International Association of Better Business Bureaus (IABBB) is the network hub for BBBs in the US, Canada and Mexico. Like BBBs, IABBB is dedicated to fostering honest and responsive relationships between businesses and consumers -- instilling consumer confidence and advancing a trustworthy marketplace for all. Please visit BBB.org for more information.