In an alarming revelation, a recent report from the US Federal Trade Commission (FTC) has unveiled that American consumers fell victim to text message scams amounting to a staggering $330 million in 2022. This figure more than doubled the losses reported in the previous year and represented an almost five-fold increase from 2019.
Text message scams, which exploit the speed and convenience of text communication, have become increasingly prevalent and sophisticated in recent years. Scammers capitalize on the immediacy of texts, hoping that recipients will hastily react without taking the time to consider the authenticity of the messages. The deceptive texts often promise enticing rewards, such as free gifts, packages, or job opportunities, while others aim to instill panic by falsely suggesting unauthorized account access.
The FTC’s Consumer Sentinel database says, “These are all lies and ways to take your money and personal information.” The consequences of falling for these scams can be severe, with victims losing significant sums of money and inadvertently sharing sensitive details, including their Social Security Numbers.
A detailed examination of 1,000 suspicious texts revealed that most of the fraudulent messages attempted to mimic well-known businesses, with complaints about texts impersonating banks witnessing a nearly twentyfold surge since 2019. The report provided an example of a typical scam message, such as one pretending to be from Wells Fargo Bank: “Wells Fargo Bank Fraud Alert: Did you attempt a purchase at Walmart for $1,263.89? Reply YES or NO.”
Upon replying with either response, victims would receive a fraudulent phone call from scammers impersonating the bank’s fraud department. In 2022, the median reported loss for this particular type of scam was $3,000, underscoring the financial toll inflicted on individuals. Victims often unwittingly disclosed personal information during these interactions, putting themselves at further risk.
Some common text message scams included fake package delivery notifications, fraudulent job offers, and security alerts masquerading as communications from Amazon. The FTC revealed that an alarming 98 per cent of recipients opened these scam texts, and 45 per cent responded to them. In comparison, email-related scams saw open and response rates of only 20 per cent and 6 per cent, respectively.
The ubiquity of texting as a daily communication method, with over half of consumers relying on text messages regularly, contributes to the high engagement with these scams. As a result, losses due to text fraud have skyrocketed over the years, with reported losses totaling $67 million in 2019, $86 million in 2020, $131 million in 2021, and a staggering $330 million in 2022.
The report also identified the top companies that were impersonated in text scams in 2022, with Bank of America accounting for 14 per cent of the cases, followed by Wells Fargo (12 per cent), Chase (12 per cent), and Citibank (9 per cent).