A new list of the most-reported scams shows phantom debt scams on the rise.

The National Consumers League on Tuesday released the top 10 scams reported to its Fraud.org website and found a sharp rise in refund and recovery, or phantom debt scams. These scams involve the victim being contacted by someone claiming they are collecting an unpaid debt.

More than 10,000 consumer complaints lodged in 2014 were analyzed, the group said. The refund and recovery scam now ranks as the fourth most commonly complained about scam.

Here’s how it works: You get a call or email from a crook who says you owe money and they are collecting. Should you take issue with the purported collection action, they typically will tell the targeted victim that they could face time in jail or other legal actions.

“Fraud remains one of the most pernicious threats facing consumers today,” said Sally Greenberg, the league’s executive director. “We are particularly concerned about scammers increasingly relying on the old-fashioned’ telephone as a way to reach millions of potentially vulnerable consumers.”

bad guy

Top 10 Scams

Here are the top 10 scams documented by the league’s Fraud.org project:

  1. Internet sales. Either misrepresented goods or products never received.
  2. Prizes/sweepstakes/free gifts. A request for money to claim a made-up prize.
  3. Fake checks. Being sent a check and then being asked to transfer back a certain amount of cash.
  4. Recovery/refund companies. Demands to pay a fake debt.
  5. Advance fee loans/credit arrangers. Phony pledges to provide loans to those with poor credit when a fee is paid upfront.
  6. Computer equipment and software. Being solicited by phony tech support to fix made-up problems.
  7. Scholarships/grants. Being charged a fee for useless, generic lists provided by those promising a custom search.
  8. Phishing/spoofing. Trying to dupe consumers into providing information by pretending to be a trusted business.
  9. Friendship/sweetheart swindles. Using an online relationship to dupe a victim in paying money.
  10. Ad space/directory listings. Phony invoices sent to businesses for listings they supposedly ordered.

The group also noted that victims are now less likely to send money via a wire transfer service like Western Union (WU) or MoneyGram (MGI), which is next to impossible to reverse. More consumers reported paying by credit card when scammed, which allows an opportunity to recover funds, the group said.

“Credit card transactions are a safer way for consumers to pay for products since they can dispute fraudulent charges with their credit card company,” said John Breyault, vice president for the league. “Unfortunately, when a fraud victim sends money via wire transfer or prepaid debit card, the chances of getting their money back are much lower.”

14 Comments
  1. Great information to know for anyone. Scary what people try to do and how easy people get taken. I do everything by credit card and I’m careful to check all transactions.

    • Good for you, Heather. It is important that we check our credit card purchases every day. My business card was hacked last February. Purchases were made in France! Although I got my money back, it was a time-consuming hassle. We can’t be too careful.

  2. We get recorded phone messages reminding us seniors of popular scams. Hubby is very cautious about internet and many other things, so we are unlikely to fall prey. Feel bad for those who do.

    • Please don’t feel you won’t fall prey to the bad guys, Roz. My business credit card was hacked last February (I don’t shop on line, as you know) for over $3,000. It felt like I was financially raped. Fortunately the bank took care of it, but it was a lot of work and aggravation for me.

  3. Interesting to hear that so many people are still wonderfully trusting in the face of all the reported “scams” that seem to be so prevalent in our culture today. I remain trusting, yet discerning and trust my own intuition when it comes to these types of calls or situations. Thanks for sharing…hopefully a few more people will become wiser because of it.

    • I hope people realize they are not safe just because they don’t shop on the Internet, and that there is always someone out there to scam them!

  4. This is such great information. The length that some people take just blows my mind. We had this happen to us and it is such a hassle to get everything back in place. Thanks for sharing.

    • Thanks, Julie. I know the feeling of having been hacked (for me it was last Valentine’s Day…as if I had the time and energy to take care of it at that time!). It’s more than a matter of Buyer Beware these days!

  5. Very valuable information. So many people try to abuse the good nature of others. It is sad.

    • Yes, Meryl. You and I would never even think of these things, but we are often the ones who become victims.

  6. Great list! It’s a pity that there are people who do stuff like this. We must be so careful on the net and when answering the phone. I get recorded messages and hang up right away.

    • Sometimes I wonder, Alexandra, if there were a way to be removed from the lists. Oh, not only the 2-3 times a day phone calls from someone purporting to be google, or someone who wants to loan money, or a merchant service, and from all of the “Stuff” that we don’t need. Does hanging up work for you or are they all robo-calls?

  7. I have seen it all. These scammers are getting more and more clever

    • No, Dahrlin’ you haven’t seen it all!! No sooner do we come up with an antidote than they come up with something new!!