ID Theft Dominates Top Scams Nationwide

Our forecast for 10 top scams in 2014: Internet Scambusters #575

It’s time for our annual review of top scams in 2013 and our predictions for the coming year.

Phishing and ID theft stay firmly in the Number 1 slot of our Top 10, followed by lottery scams.

But in 2014, we expect to see malware become a more significant threat than previously for reasons we explain in our review.

Now, here we go…

ID Theft Dominates Top Scams Nationwide

It seems there’s no prospect of identity theft being knocked from the Number 1 slot in our annual list of top scams.

Based on our own research and published statistics, our Top 10 for 2013 shows phishing and ID theft holding that position by a huge margin.

And, sadly, we confidently expect it to remain there in 2014 too.

But while this and many other scams stay in our charts year after year, the con tricks that underpin them are constantly changing, which means we can never let our guard down.

For instance, social networks like Facebook and Twitter, which didn’t even exist a few years ago, are now a major source of phishing and ID theft.

Top 10 Scams in 2013

Each year, using our experience and a wide range of sources, we forecast rankings for the major scam categories during the upcoming 12 months.

For 2013, we were pretty near the mark. Let’s take a quick look at the outturn in reverse order (with our predictions in parentheses).

10 (10) Dating and sweetheart scams. This cruel trick lures lonely-heart victims into handing over money to the scammers for supposed travel or even extortion.

9 (9) Investment scams. As we suggested, low interest rates throughout 2013 and imaginative con tricks continue to draw even seasoned investors into schemes promising high returns but delivering only heartbreak.

8 (8) Advance fee scams. We’ve seen some clever new games in this field, in which victims are asked either to pay upfront for dubious or non-existent services or to refund part of an overpayment made on a dud check.

7 (6) Economy related scams. This one slipped a notch below our expectations because of the modestly improving economy, but phony job schemes, rip-off payday loans and mortgage reconstruction schemes still abound.

6 (7) Imposter/grandparent scams. This trick, in which the scammer poses as a distressed relative in urgent need of money was one of the big movers in 2013, pushing it up a place in our chart.

5 (5) Hit-and-run scams. This is our catch-all category for a wide range of con tricks in which the aim is to relieve victims of their money as quickly as possible — like bogus charity collections and home repairs.

4 (4) Malware. This category is now under the control of organized crime, evidenced by the growth of ransomware during 2013. It locks up victims’ PCs until they pay for the unlocking “key.”

3 (3) Bogus Internet sites and fraudulent online sales. 2013 was a record year for online spending, which means it was probably also a record year for shoppers being tricked into buying from non-existent online stores. We also include auction and online classified ad fraud in this category.

2 (2) Lottery/sweepstakes/prize draws. A notable feature in 2013 was the size of losses chalked up by some victims who ended up paying six figure sums to try to get hold of their non-existent “winnings.”

1 (1) Phishing and ID theft. From simple phone requests for victims’ credit card details to large-scale hacking of corporate databases, this crime now accounts for something like one in every five scams.

Top 10 Scams for 2014

We can say with near certainty that, despite the best efforts of law enforcement and the software security industry, the growth of Internet usage will drive the number of scams ever higher.

We don’t think there will be any significant change in the components of our Top 10 chart but there may be some repositioning and changes of emphasis.

Here’s our forecast:

1. Phishing and ID theft. The bad news is that we think the gap between this and other scams will widen, with newly digitized medical databases as well as corporate systems being key hacking targets, alongside continuing growth of social networking scams.

2. Lottery and sweepstakes. No change here either. Seniors, often the most difficult to educate about this crime, are the prime target.

3. Malware. We think this crime will grow in 2014, moving up a place in our chart because of the increased use of smartphones and tablets.

Security specialists suggest that half of all Android mobile devices have no security installed.

This is such a threat it could even dislodge lotteries from the Number 2 slot.

4. Bogus Internet sites and fraudulent online sales. We don’t see any drop-off in this crime.

We’ve only moved it down the chart because of the growing malware category.

5. Hit-and-run scams. This category moves up a slot too because of the sudden surge seen towards the end of 2013 in bogus IRS and utility company payment demands.

Also, as more people wise up to the risks of wiring cash, crooks have switched to demanding their money on prepaid debit cards, giving themselves some extra cash-gathering time before awareness of this new trick spreads.

As always, this category can also be affected by any major natural disaster, which drives up charity scams.

6. Grandparent/imposter scams. It’s the simplicity of this one that makes it such a big earner for the crooks.

Although phone calls remain a popular technique, crooks are switching to spamming millions of people using email address lists harvested from circulating messages, like jokes and pass-it-on requests.

Delete those address lists before you forward!

7. Economy-related scams. Expect to see a surge in reverse mortgage scams when older homeowners try to unlock some of the equity in their property as prices start to recover.

Also, the trend towards self-employment, a big feature of the past few years, could spark a new round of work-from-home scams.

8. Advance fee scams. Scammers never seem to run out of ideas for new ways of fooling people into sending them “overpayment” refunds or paying upfront for dubious services.

There’s no reason to think they’ll run out of crooked inspiration in 2014.

9. Investment scams. There seems to be little prospect of better interest rates for savers either, so they’ll continue to hunt for higher returns — especially in precious metals and currency speculation.

We also anticipate a surge in crowdfunding investment scams as crowdfunding becomes a more popular way to raise money for small businesses, causes and creative projects, especially with recent changes in equity crowdfunding laws.

Towards the end of 2013, we noted a new surge in “pump-and-dump” schemes, in which victims are fooled or pressured into buying worthless stock, pushing up prices and enabling the scammers to sell their holdings before the price falls again.

10. Dating and sweetheart scams. This is a contender for moving up a place in the charts but we’ll keep it here for now.

The driver is the growth in dating site usage by older age groups, including those whose judgment may not be as sound as it used to be.

We’re also seeing growth in bogus dating sites as well as crooked “sweethearts.”

Not a pretty picture is it? Not just this item but our entire Top 10 chart.

As always, though, there are plenty of actions you can take to increase your security and reduce your vulnerability to those top scams — starting with commonsense, skepticism and regular reading of Scambusters!

That’s it for today — we hope you enjoy your week!