Consumers lost a whopping $330 million to SMS scams in the US in 2022, more than double the losses reported in 2021 and nearly five times what people reported in 2019, a new report has shown.
According to the US Federal Trade Commission (FTC), reports about text scams spiked in the first six months of the Covid-19 pandemic and have never returned to pre-pandemic levels.
“Scammers use the speed of text communication to their advantage: they hope you won’t slow down and think over what’s in the message,” the FTC said.
“Some messages promise a good thing — a gift, a package, or even a job. Others try to make you panic, thinking someone’s in your accounts. These are all lies and ways to take your money and personal information,” it added.
In a screening of a randomly selected set of 1,000 deceptive text messages, it was discovered that the majority of fraudulent communication aimed to mimic well-known businesses.
Reports about texts impersonating banks are up nearly twentyfold since 2019, said the report.
“Wells Fargo Bank Fraud Alert: Did you attempt a purchase at Walmart for $1,263.89? Reply YES or NO,” one of the sample messages reads.
If the recipient answers yes or no, they will receive a bogus phone call from the bank’s alleged fraud department. Last year, the reported median loss for this type of scam was $3,000, and the agency has emphasised that victims of this scam shared sensitive information with the scammers, including their Social Security Number.
Moreover, the report mentioned that scammers also enticed victims with the promise of a free gift from well-known retailers or even cell phone companies.
In the majority of the reports, recipients were asked to click on a link and pay shipping fees for a bogus prize that they would never receive.
Other scams include — fake package delivery scams, phoney job offers, and not-really-from-Amazon security alerts.
Further, the report stated that text message open rates are estimated to be as high as 98 per cent, and response rates as high as 45 per cent, as compared to email open and response rates of 20 per cent and 6 per cent, respectively.
Over half of the consumers text daily, making texting more common than any other communication method, including voice or email.
Aggregate reported losses to text fraud by year are as follows — $67 mn (2019), $86 mn (2020), $131 mn (2021), and $330 mn (2022).
The top companies identified in 2022 reports about bank impersonation text scams were Bank of America (14 per cent), Wells Fargo (12 per cent), Chase (12 per cent), and Citibank (9 per cent).
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