3 reasons to report money scams to government agencies

Scams are everywhere. Online dating apps, social media, networking sites and even email inboxes are entry points for cybercriminals seeking to prey on vulnerable and trusting individuals who use these platforms for their personal needs and desires. Falling victim to cybercrime can cause shame and embarrassment, but those who experience fraud are certainly not alone. According to the U.S. Federal Trade Commission, fraud reports skyrocketed in 2021, with nearly 2.8 million people impacted. Consumers lost $5.8 billion to financial scams, which marked a 70% increase in fraud over the reports made in 2020.

If you've fallen prey to a financial scam, your first instinct might be to keep the details of the situation to yourself. However, sharing the details of your experience can benefit you and those around you, and help stop the scammers from preying on others. Government officials and financial professionals work diligently to reduce the risk of money scams, but they can't respond if they don't know which scams are happening. Explore why you should report money scams to U.S. government agencies and how to protect yourself from the detrimental effects of fraud.

What is a money scam?

A money or financial scam occurs when a criminal seeks to obtain your money, whether by gaining access to your financial information or receiving money from you directly. Although the thought of willingly handing over your hard-earned cash might seem strange to you, the reality is that scammers are highly skilled at manipulating and coercing their victims. Scammers use various tactics — including appealing to emotions and connecting with those they interact with — to get access to the cash they want.

It's helpful to know what to look for when encountering a scam. Unexpected or unsolicited contact is often a red flag. If you received a phone call or message from someone you don't know, the person on the other end may be a scammer. Text messages, social media direct messages and emails can all come from cybercriminals who are trying to get your personal information. Cybercriminals have become increasingly sophisticated at recreating official-looking emails and printed letters, such as those from a bank, credit union or credit card provider.

Before you click on a link, answer a phone call or respond to a message, verify the accuracy of the individual claiming to send the message. If you get an email from your financial institution claiming your account is compromised, call the financial institution directly. Scammers prey on the feelings of those who receive their messages, panic and respond, so don't give in to their strategies.

Common types of scams

Some of the most common types of scams include:

• Financial institution scams
• Charity scams
• Telephone scams
• Government grant scams
• Ticket scams
• Investment scams
• Lottery and sweepstakes scams
• Census-related scams and fraud
• Ponzi schemes

Since the COVID-19 pandemic in 2020, scammers have also taken advantage of victims by seeking and obtaining access to private health or financial information. Additionally, when certain products were in high demand and short supply during the pandemic, price gouging was a problem.

Why you should report scams to government agencies

Whether you fall victim to a money scam or avoid it altogether, it is  worth your while to alert government agencies about a scam as soon as possible. Here’s why.

Protect others

One of the key reasons to report scams to government agencies is to protect others from becoming victims of the same scams. When people are more aware of potential money scams and the types of messages they might receive from criminals, those people are less likely to respond or share personal information, such as account information and credit card numbers. Talk to your friends and family, members of your community, and others around you about your experience. Give examples of what they might receive from a scammer. 

Provide information for follow-up 

The Federal Trade Commission (FTC) is the government agency responsible for protecting consumers from deceptive business practices. Its employees work diligently to spot scams and stop scammers from preying on future victims, but the work of scammers continues to increase. When victims share their experiences with the FTC, consumers can provide vital details that allow the agency to take immediate action. These details might include contact information and links the FTC can use to build a case against cybercriminals, which the agency can use to take legal action against scammers. 

Potentially stop the scammers for good

The FTC has the tools and resources to stop scammers for good. The agency takes legal action against those committing fraud or stealing from others, and shares information about scams to prevent other people from becoming victims. If cybercriminals can't get the details they need to commit fraud, they may decide to give up altogether. 

How to report money scams to government agencies

Now that you understand why reporting scams to government agencies is essential, you may wonder how to do so. Follow these steps to help ensure your report gets into the right hands.

Submit a report to the FTC online

To report a scam to the U.S. federal government, submit a report to the FTC through its website. As you go through the steps, you'll answer relevant questions, including whether the scam relates to common problems such as impersonation, online shopping, credit or debt, or a prize you allegedly won. From there, you'll provide details about the solicitor, whether you shared financial details or sent money, and any other information you remember. 

File a report with your local government agency

Along with filing a report with the FTC, you should submit a complaint to your state's consumer protection office. You can find the information and contact details on the State Consumer Protection Offices website. Choose your state from the drop-down menu, and you'll see a list of local agencies that handle cybercrime, fraud and scams. Depending on the type of scam, you can determine which authority to contact with your complaint.

Consider working with the police

If you lost money in a financial scam, it's worth filing a report with your local police department. A police report can back up your claims, especially if you or someone else takes legal action against the scammer. 

By taking steps to protect yourself, you can reduce the risk of becoming a victim of a financial scam. By taking further action and sharing your experience with a scam with government authorities, you can help to stop scams and protect those around you. The process of reporting scams and fraud isn't too complex, and it's certainly worth doing anytime you receive a questionable message or receive a phone call from a scammer.

Learn more about potential scams and ways to protect your money:

• How to protect yourself from financial phone scams
• How to spot scams on dating apps and protect yourself from scammers
• How to spot a job scam

Sources:

• New Data Shows FTC Received 2.8 Million Fraud Reports from Consumers in 2021 | Federal Trade Commission