Fraud Is on the Rise in Massachusetts. Here’s How to Protect Yourself in 2023
In Massachusetts, money moves around a lot: According to the most recent report by the U.S. Bureau of Labor Statistics, average consumer expenditures in the Eastern Massachusetts metropolitan area alone reached more than $90,000 annually, which is around $25,000 more than the national average for comparable regions. And while much of those assets end up where they’re intended, there will always be those who want to take advantage of all that capital.
During the new year, a number of factors can make us more susceptible to financial fraud, and that’s a problem because financial scams in Massachusetts are far too common. Seventy-seven percent of us report having experienced fraud in the past, and post-holiday gift card purchases, a high rate of debit card usage, and even our openness to charity during this period can make us a prime target. And the overall rate of fraud, from real estate scams to online dating schemes, has steadily risen in the past few years.
Fortunately, you don’t have to be a financial security expert to stop them from getting to you–you just have to follow some pretty simple tips from one. To help you identify financial fraud when it comes to you (and steer yourself clear of it), we spoke to Dan Picha, Chief Banking Officer at South Shore Bank, about the most common forms of fraud in Massachusetts, so that you can rest assured that your money is going where you mean it to.
Fraudulent Charities
It’s the giving season–and that means fraudsters are there to take advantage of your good will. The modern digital era makes it much easier for people to set up illegitimate businesses and charities and take people’s money without them realizing it. This form of fraud is particularly common in Massachusetts: The FTC reports that more than 44,000 cases of imposter scams, identity theft, and online shopping were reported in 2021 in our state–for total losses of $91 million.
Urgency and panic are critical to many of these types of scams. They keep victims from looking deeply into the organization’s credentials, making it possible for anyone to fall for the seemingly simplistic trick of a request for a fake charitable donation.
“The key here is not to get drawn in by a false sense of urgency,” Dan Picha says. “They will press you to send money quickly. One technique is for fraudsters to send you an email thanking you for agreeing to donate and asking you to make your payment now. Even though you never actually agreed to donate.”
So, when dealing with a new organization or an unexpected communication from an organization you trust, take a breath and step back. If there’s a URL involved, check that the URL does not contain unnecessary characters in the domain name (think goo.gle.com). Do your homework including a background check for reviews on the charity, and check out their website.
Tricky Deliveries
Returning gifts and getting what we really want is a new year tradition, but all that shipping and handling can be risky. Even something as mundane as a package delivery can provide a scammer the necessary panic that produces a poor decision. The Federal Communications Commission has warned would-be package recipients that delivery notification emails, texts, and calls provide scammers a plethora of routes to your cash and personal information–in the urgency to get your package before a (fake) delivery driver pulls away, people will click links, provide sensitive information, or pay extra fees.
“Since package delivery opens you up to direct communication with strangers under a time restriction, it makes for a clear opportunity for fraud,” Dan Picha cautions. “Again, scammers will often include a link and ask you for personal information or even payment in order for your package to be delivered.”
To confirm package delivery status, always go directly to the website you ordered from to check if a delivery update is legitimate, instead of trusting a text or call from an unconfirmed source.
Gift Card Scams
After the holidays, it’s time to use up all our gift cards, but that can be a riskier proposition than it seems. Digital fraud not only makes it easier for scammers to set up a fake organization, but it also gives them a greater range of payment options to abuse, and Massachusetts residents are, unfortunately, not the most informed when it comes to safe purchasing practices. In a survey by the Massachusetts AARP, only 32 percent of residents knew that credit cards can provide more protection from online scammers than debit cards.
Unfortunately, gift cards are a much more dangerous ways to pay. Gift cards can play a surprisingly large role in financial scams–in fact, they’re key to some of the fastest growing scams in Massachusetts, which target online payers. That’s because gift cards are less protected than a credit card but still easily spendable, which makes them a perfect target for scammers: One in four people who report fraud to the Federal Trade Commission are reporting gift card fraud.
“A popular tactic by scammers is to direct you to buy one or more gift cards as a quick and easy way of making payments. Gift cards are a virtually untraceable form of digital cash,” Dan Picha says. “Once a scammer gets your funds from that gift card, there’s no reversing the payment–which makes them beloved by criminals.”
So stay on high alert when using a gift card online, and when possible, make large online purchases with your credit card. Credit cards offer stronger protection for consumers.
Tax Schemes
No one looks forward to doing their taxes, but there’s a more serious threat than boredom in recent years: 2021 saw a 91 percent increase in identity theft and tax refund fraud, according to the IRS.
A tax refund scam can come through many different channels and take many different forms, but scammers will generally pose as the IRS or another financial authority, looking to collect overdue taxes. Alarmed, the victim will hand over critical financial information–often including their social security number–often over a deceptive phone call, through an email designed to steal personal information, by US Mail, or a fake website.
Once the scammer has your financial info, they can then file your tax return and pocket the money for themselves. What happens next is often far worse–scammers will sell your critical personal information, opening you up to identity theft and other schemes.
“People can be too trusting of perceived authorities, but you need to be extremely careful with your social security number no matter who seems to be asking,” Dan Picha says. “Avoid providing the number over the phone, and always double check that the URL of the site you are on is correct before entering it in a form. Do your research as there are also false tax preparers posing as legitimate professionals”
While technology has enabled scammers to infiltrate what may seem like just about every aspect of everyday life, the keys to keeping them at bay don’t have to be complex: Whether it’s a trusted organization or a particularly pushy package delivery driver, make sure they are who they say they are each time they contact you, avoid using cash until you’re absolutely sure of someone’s identity, and stay up to date on the kinds of scams that fraudsters are running so you can recognize them at a glance. By taking an extra step or two, no matter how creative a scammer gets, you can stay secure.
