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Individuals posing as a government agency to collect on a debt topped the nation’s list of consumer complaints in 2016. These so-called “imposter scams,” where con artists pose as a government agent to get you to hand over your cash surpassed identity theft, according to the Federal Trade Commission.

A common impostor scam is the “phony IRS agent,” where scammers contact consumers to claim they have been audited and owe money to the government. Victims of the scam are told to pay immediately or they can face imprisonment or deportation.

Another common scam involves a “fake computer technician,” in which the scammer claims the victim needs to purchase a security patch or software license. Of the people who complained about identity theft in 2016, approximately 29 percent said their information was used to commit fraud by filing fake tax returns to confiscate their tax refunds; 32 percent said it was used in credit card fraud.

Here are the Top 10 consumer complaint categories for 2016:

Debt collection — 859,090 complaints
Impostor scams — 406,578 complaints
Identity theft — 399,225 complaints
Telephone and mobile services — 292,155 complaints
Banks and lenders — 143,987 complaints
Prizes, sweepstakes and lotteries — 141,643 complaints
Shop-at-home and catalog sales — 109,831 complaints
Auto-related complaints — 94,673 complaints
Credit bureaus, information furnishers and report users — 49,679 complaints
Television and electronic media — 49,546 complaints

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Even though the new security chip technology has made it more difficult for criminals to counterfeit credit and debit cards, fraud has actually risen over the last year, according to a recent study.

The new study from research firm Javelin Strategy & Research found that incidents of identify fraud rose 16% in 2016, costing consumers $16 billion in losses. In total, 15.4 million victims were affected, 2 million more than in 2015, representing 6.15% of all consumers.

Many thought the use of electronic chips on credit cards would help curb this criminal activity. However, the new security chips seem to be causing more fraud than they prevent, as numbers are at an all time high. Even though the chips have made it harder for thieves to walk into stores and purchase goods with a counterfeit card, more criminals are keeping their activity strictly online, bypassing the security chips all together.

Account takeovers have increased 61% over 2015, totaling 1.4 million incidents. Account takeovers occur when thieves gain access to someone else’s account and change the password and security information on that account. The criminals are then free to make charges without the victim’s knowledge since any warnings or notifications are sent back to the thieves themselves. Incidents where new accounts were opened in consumers’ names without their knowledge increased 40%. This has accounted for 1.8 million victims.

As evidenced by the latest numbers, it shows thieves’ ability to adapt to changing security measures, no matter the number of safeguards put in place. Banks, credit card companies, and retailers will need to keep being vigilant in order to keep fraud under control. But consumers also must take preventative measures, like installing anti-virus and anti-malware software on their computers, guarding their credit cards and account numbers, and paying close attention to the security on any website that credit card information is being accessed. Taking these simple precautions can help safeguard your finances.

Related Resources:

http://fortune.com/2017/02/01/credit-card-chips-fraud/

https://www.wsj.com/articles/credit-card-fraud-keeps-rising-despite-new-security-chipsstudy-1485954000

https://www.consumerprotect.com/consumer-safety-fraud-guide/

Tag: credit card fraud

Debt Collection and Imposter Scams #1 Consumer Complaint

Credit Card Fraud on the Rise despite New Security Chips