Robocalls are an epidemic. Here's why there's no quick fix
02:11 - Source: CNN Business
CNN Business  — 

Julianne Stafford, a special education teacher in Massachusetts, recently got a terrifying phone call: someone claiming to be a Social Security official said a number of bank accounts opened in her name in El Paso, Texas, had been linked to drug trafficking — and that Boston police had a warrant for her arrest.

The only way to clear her name, the caller said, was to pay – by buying two $500 Google Play gift cards and giving the activation codes over the phone.

Stafford nearly fell for it, until the manager at the store where she went to buy the gift cards told her she was being scammed.

“He looked at me with a great deal of empathy in his eyes and said, ‘You’re being scammed. Don’t do this.’ He saved me $1,000,” Stafford told CNN in an interview.

Complaints about scams in which callers pretend to be from the government — Social Security, the IRS or other agencies — have reached an all-time high, according to new Federal Trade Commission data reviewed by CNN.

In the first half of the year, the consumer watchdog says it received 209,000 reports of the scam. That’s almost as many as the FTC received in all of 2018, the agency said Monday, suggesting the complaints are on track to nearly double this year.

Americans have forfeited at least $450 million this way to government impostor scams since 2014, the FTC said — and that only counts the victims regulators know about.

Government impostors became the number one source of FTC complaints and now account for the lion’s share of impostor scams overall. The problem now even eclipses issues such as debt collection and identity theft.

“The most recent increase we’ve seen really started in September and October of 2018,” Monica Vaca, associate director of the FTC’s consumer response and operations division, told CNN. “Toward the fall, we started to see these scams really, really pick up.”

The explosion in government impostor complaints reflects a deepening crisis concerning robocalls and spoofed telephone numbers. The tactics are commonly used by scammers, who lure in victims by using dialing software to impersonate real government agencies. In some cases, the criminals make it appear that they are calling from phone numbers legitimately registered to law enforcement.

Thousands of consumers who reported the scam this year told the FTC they lost money. Most victims lost $500, but the median loss was nearly twice that amount. Seniors lost the most — in some cases $2,700 or more.

To avoid being traced, scammers threaten victims with federal punishment and then request payment in retail gift cards, such as for iTunes or the Google Play store.

The scam’s underlying logic is straightforward, preying on consumers’ fears of running afoul of the law. It also takes advantage of advances in technology that may be unfamiliar to victims.

The issue last peaked in 2016, when a hive of call centers overseas was responsible for blasting out a similar scam. A series of targeted law enforcement actions shut many of them down, leading to a dip in reports. But the numbers have again risen with a vengeance and are now higher than in 2016.

Lawmakers and regulators have taken some steps to curb robocalls and number spoofing. Last week, the FTC, Justice Department, and various states and local authorities brought nearly 100 cases against alleged robocallers. Altogether, they were said to have been responsible for generating roughly 1 billion automated calls.

The Federal Communications Commission has also made clear that telecom companies can implement robocall blocking technologies for their customers by default. The technology works similarly to the way email services filter out spam. The FCC has also urged carriers to adopt call authentication standards that could give telephone users greater confidence in their caller ID.

Legislation is advancing in both the House and Senate that would expand the FCC’s powers to write rules, levy fines and pursue illegitimate robocallers. The bills have strong bipartisan support.