Federal Trade Commission: California Is Scam Capital, U.S.A California has been recognized for a concerning new distinction—the capital of scams.

Mar 4, 2020 | Government

California Black MediaContributor

In 2019, consumers across the United States filed 1.7 million fraud reports, adding up to a total loss of $1.9 billion, according to the Federal Trade Commission (FTC).

Although California accounts for about 12 percent of the total US population, 14 percent of the fraud cases originated in our state last year. Californians reported well over 243,000 fraud cases, according to the FTC’s official website.

Last Thursday, the FTC and Ethnic Media Services joined forces to highlight the top scams of 2019 during a telebriefing. California Black Media participated in the conference led by FTC Consumer Response and Operations Associate Director Monica Vaca.

She gave details on some of the most frequently reported scams of the last year.

“Every year, the FTC releases reports, including the top scams plaguing the country,” she said. “The data also highlights fraud trends by geographic region and spotlights new patterns and strategies used by scammers.”

Vaca divided the top scams into three categories: most frequently reported cases, highest total sum of money lost and highest individual monetary loss.

She identified imposter scams as the most frequently reported swindle with over 62,000 cases in California.

Nationwide, imposter scams accounted for a $667 million loss.

“These scams are definitely trending, they are on the rise,” Vaca said. “And these are people who pretended to be a government agency, a well-known business, a romantic interest or even a family member.”

Vaca also mentioned that scammers will sometimes pose as technical support and ask for sensitive information regarding personal accounts that can be accessed digitally.

According to Vaca, the FTC saw a 52 percent increase in government imposter fraud cases in 2019, in comparison to reports in 2018, which she claimed were driven by an often used over-the-phone social security imposter scam.

The most frequent payment method for scams in this category were gift cards, according to the FTC. Vaca asserted that the only way people should be using gift cards is for gifts and not payment, adding that any requests for a gift card payment is a red flag.

As for the second category, Vaca identified romance scams as the costliest fraud tactic in 2019 with $201 million in monetary losses last year.

“That number has grown really steadily since 2015,” Vaca said. “Romance scams were six times more costly in 2019 than they were in 2015.”

Lastly, the greatest individual loss category, meaning the largest dollar amount lost by one person at a time, were counterfeit check scams.

What is perhaps the most troubling bit of context for this scam is that those who fall victim are often attempting to find legitimate work or provide a legitimate service.

“I’m pausing here to talk about this a little bit more because we are seeing people in their 20s are reporting this at twice the rate as people 30 or older and because the majority of these ploys are around income opportunities, around jobs or around some kind of legitimate opportunity to make money,” Vaca said. “These are not people being greedy or saying, ‘Oh, I got some free money.’”

According to Vaca, phone calls are still the most frequently used tactic to contact possible victims for fraud.

The FTC successfully returned over $1 billion to people in the last four years nationwide, although that number accounts only for the number of FTC checks that were cashed. According to Vaca, many checks that were sent to fraud victims were not cashed.

California residents cashed over $151 million of that national total last year.

Vaca stated that the reason not every fraud victim reports their experience is because of a sense of pride.

“People are more likely to avoid losing money if they talk to just one person while the scam is in progress.” Vaca said. “It’s not just the people you think who fall for scams, anyone could fall for a scam.”

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