BBBs across Canada recently released the Top 10 Scams that targeted Canadians in 2017.
At the top of that very shady list, for the first time, is Online Purchase Scams. Every year Council of Better Business Bureaus, based in Arlington, Virginia, releases its findings in an annual Risk Report to find out levels of risk for particular scams. In line with Canada’s Top 10 Scams, new numbers indicate online purchase scams are now the riskiest forms of consumer fraud in North America.
In 2017, consumers reported more than 47,000 scams to BBB Scam Tracker (BBB.org/ScamTracker). BBB analyzed this information using its unique BBB Scam Risk Index to determine the riskiest scams based on exposure, susceptibility, and monetary loss. The findings, released for National Consumer Protection Week (U.S.) and Fraud Prevention Month (Canada), show some significant changes from 2016:
Tax collection scams decreased 60% in volume of reports, likely due to the arrest in India in 2016 of the ringleader of a network of call centres primarily responsible for the IRS and CRA scams
Online purchase scams jumped from the 4th riskiest scam to the top spot, likely due to an increase in exposure
Home improvement scams dropped from 1st to 6th riskiest, despite a number of natural disasters that traditionally bring out “stormchasers”
Young people continue to be at higher risk for scams, and susceptibility decreases with age, although dollars lost increases when victims are older.
There was good news in the 2017 BBB Scam Tracker Annual Risk Report: New Trends in Scam Risk from the BBB Institute for Marketplace Trust (BBB Institute).
“Although we saw an increase in total scam reports, the good news is that susceptibility was down,” said Melissa Trumpower, director of programs and operations with the BBB Institute and co-author of 2017 BBB Scam Tracker Annual Risk Report: New Trends in Scam Risk. “The percentage of those reporting who actually lost money to a scam fell from 18.8 percent in 2016 to 15.8 percent in 2017. We also saw a 17 per cent decrease in the median monetary loss, down to $228.”
The most common online purchase scams in 2017 were related to pets, clothing, cosmetics, electronics, and automobiles. The offer of free trials was a common tactic for these online purchases: 67 per cent of scams involving cosmetics and 60 per cent involving nutrition products mentioned a free trial opportunity.
Another significant increase was in the category of investment scams, which tend to target older age groups and come with a higher average monetary loss. This scam type jumped from the 6th riskiest in 2016 to the 2nd riskiest in 2017.
Home improvement scams dropped from the riskiest scam in 2016 to 6th riskiest in 2017. Surprisingly, the drop occurred in a year marked by several weather-related disasters, including hurricanes Irma and Harvey. BBB believes this may have been due to a significant increase in information from the media and consumer protection groups around home improvement scams following disasters.
The top ten riskiest scams in 2017 were:
Online purchase scam (up from #4 in 2016)
Investment scam (up from #6 in 2016)
Employment scam (no change)
Advance fee loan scam (up from #5 in 2016)
Fake check scam (down from #2 in 2016)
Home improvement scam (down from #1 in 2016)
Tech support scam (up from #8 in 2016)
Travel/vacation scam (new to top 10, #12 in 2016)
Family/friend emergency scam (no change)
Government grant scam (new to top 10, #11 in 2016)
Travel and vacation scams joined the list, with top destinations mentioned in the scams: Orlando/Florida, Disney, Mexico/Cancun, and the Bahamas. Also new to the top ten is the government grant scam. Two scams left the top ten list: romance scams and sweepstakes/lottery/prize scams. However, romance scams still made the Canadian Top 10 Scams of 2017 list due to the amount of money lost.
Regardless of the scam, scammers often rely on the following tactics:
The promise of getting a “great deal” (which is often too good to be true);
Pressure to respond immediately with offers that are time sensitive and prices that “can’t be guaranteed;”
Intimidation (for example, “You are under federal investigation”; “You will be arrested within one hour unless you call this number”); and Isolation, which aims to force a decision without others’ opinions.
Scammers can also be very nice and personable, which can defy “bad guy” stereotypes and make targets more at risk.
Scammers are clever and are always adjusting their tactics, so everyone is vulnerable. BBB Scam Tracker is helping us identify higher risks and debunk long-standing myths, but no one should let down their guard. For more information on specific scams and tips on how to avoid them, go to BBB.org/ScamTips. To report a scam, go to BBB.org/ScamTracker.