As we all know, scammers never miss a crisis. As the federal government shutdown stretches on, fraudsters are seizing the opportunity to exploit consumer uncertainty and fear. According to the Better Business Bureau (BBB) scams have increased by 40-50% overall since the shutdown began. With some Americans facing delays or confusion about federal programs, anxieties are high and that makes people more vulnerable to this type of fraud. Scammers know how to play on these emotions and exactly who to prey on. They have impersonated government agencies such as Social Security, Medicare, Medicaid, and SNAP. And on top of the rise in scams, robocalls have picked up as well. In fact, according to CBS news, Americans are receiving 2.5 BILLION robocalls per month! The uptick in fraud during a shutdown isn’t just a worry for individual victims, it carries much broader implications. Erosion of trust, cost to taxpayers, long term systemic risk, and data and privacy breaches are all unfortunate side effects of the shutdown.
Let’s look some of the biggest scams being reported to the BBB and how to protect yourself:
- Government Impersonation Scams: Fraudsters use calls, text, or email to pretend to be an official from agencies like the IRS, SSA, VA or Medicare. They falsely warn consumers of “service interruptions” or benefit stoppage in order to trick people into giving out personal information. Victims are sometimes pressured into paying fake fees to keep their benefits from being suspended or to “verify” accounts. Sometimes the scammer will claim to be a government official offering to expedite benefits or services for a fee.
- Phishing Schemes: Emails and/or texts are sent out with offers or tips on how to keep your benefits during a shutdown. These emails contain links to fraudulent websites. Once you click the link the scammer has access to your personal information.
- Fake Relief Fund and Job Offers: Scammers may create fake offers for government grants, relief checks or stimulus payments, and low interest loans; they sometimes offer “jobs” with outrageous promises in order to steal consumer information and funds.
- AI-driven Scams: With a government shutdown, scammers know that it is harder to contact someone at a lot of the agencies. Using AI technology, they create videos relating to the shutdown and put them on tv and social media. These videos or ads often contain false information designed to spread panic and fear. Fraudsters also use programs sold on the dark web such as FraudGPT and WormGPT that will actually put a scheme together for them. Just input some information and the program does the rest. AI driven fraud is dangerous because it has become so realistic, makes it almost impossible to know what is real and what is AI. Basically, AI allows scams on steroids!
- Benefit related Scams: Scammers threaten that certain government benefits will be canceled unless the victim immediately provides personal information or pays a fee. All of the schemes listed above actually could be classified as benefit related scams. They all play on fear and insecurity to manipulate victims into giving up personal information or paying money while providing false hope of receiving extra assistance or financial aid.
Here are some and tips to protect yourself from becoming a victim of a government shutdown scam:
- Don’t confirm your identity or any personal information no matter who reaches out or who they claim to represent. The government will not call you out of the blue, that is not how those agencies work normally, much less in a shutdown when recourses are limited. Always verify unsolicited contact, if you receive a call, text or email from someone claiming to be from a government agency don’t answer or respond. You should try and contact the agency directly using a phone number from their official website.
- Be skeptical of urgent requests. Scammers are all about pressure, they want you to act before you think. Legitimate government agencies will not use fear tactics to get you to give up information. They already have your SSN so they have no need to ask you for it. Also, government agencies will never demand immediate payment and certainly not through cryptocurrency, gift cards, or wire transfers. Asking for payment in one of those forms is almost always guaranteed to be fraud.
- Check URLs and scrutinize websites carefully. Look for misspellings, unusual domains, or non HTTPS connections on sites that should be secure. If you receive an email or text with a link, don’t click that link!
- Trust your instincts. It always goes back to that old saying….If something seems too good to be true it usually is.
- Do not answer calls or reply to text messages from unknown numbers. You never know when the person on the other line is going to turn out to be a scammer.
- As always, if you find yourself a victim of a scam, or if you think someone has tried to scam you, report it to the FTC, BBB, law enforcement, or Alabama’s Attorney General’s office. Report it to the bank also so we can help keep your funds safe.
As long as there are people in this world, there will be scammers. New schemes appear everyday making it nearly impossible to avoid. By staying vigilant, knowing the signs to look for, and keeping your private information private, you can help safeguard your funds from those who make their living trying to take them.
Thanks and have a great weekend!
Tara Montgomery
Exchange Bank of Alabama
Fraud Specialist
(256) 691-0328
