New Scams to Avoid in 2016

From Consumer Reports, January 5, 2016

99016629There are many ways to make sure that your finances are in good health, as the new year gets underway. One of them—knowing how to spot a scam—is often ignored. The result is that many people are swindled out of their hard-earned savings every year. While 2015 was a year of many familiar scams, 2016 promises new scams as thieves take advantage of election fever, technological trends, and an inadvertent helping hand from the government.

To help you become more knowledgeable about these new scams, we asked David Dewey, director of research at Pindrop Security, a firm that provides anti-fraud detection technology for call centers and phone users, to tell us about the latest trends in identity theft and phone fraud. Here’s what you need to watch out for in 2016:

Uncle Sam Impersonators

2015 was the year of the IRS scam: Scammers impersonating the IRS and intimidating consumers into paying penalties for “back taxes” accounted for nearly a quarter of all scams reported to the Better Business Bureau. Expect worse in 2016.

Buried in the Congressional budget bill was a provision allowing debt collectors to use robocall technology to pursue anyone owing government debt—think overdue student loans and Freddie Mac and Fannie Mae mortgages.

Until now, consumers were advised—correctly—that the government would never initiate contact by phone, and just this past June the Federal Communications Commission strengthened protections against debt collectors calling a cellphone to dun late-paying loan holders. In 2016, that will no longer be true—and new scams will likely take advantage of this.

Read More about Political Scams, Data Breaches, and Mobile Wallet Pickpockets.