BBB Warns of Government Agency Scams

Sunday, June 5th, 2022 -- 10:01 AM

The COVID-19 pandemic saw a rise in reports of scammers pretending to be from government agencies.

While reports slowed since peaking in early 2021, victims lost more than twice as much money, according to new research by Better Business Bureau®.

BBB warns people to use caution if they are contacted by a government agency demanding money or offering a government grant for a fee. After BBB published an in-depth study in 2020 to educate the public about how to detect Government Impostor Scams, reports to the Federal Trade Commission soared.

In 2021, consumers reported losses of more than $445 million in government impostor and government grant scams, up from $175.4 million reported in 2020. Likewise, BBB Scam Tracker data showed victims of government grant scams lost more money in 2021 than in the previous year.

The median loss in government grant scams rose from $800 to $1,000, making it one of the more expensive and eighth riskiest scam reported to Scam Tracker in 2021, according to BBB Institute for Marketplace Trust’s 2021 BBB Scam Tracker Risk Report.

Scam Tracker reports also showed government impostor scams as the second-most reported scams by businesses in 2021. Social Security scams are the most reported, most expensive.

When it comes to government impostor scams, no agency is more popular than the SSA. Stop and think when you are called in the name of the law. Almost all government impostor scams use a law enforcement angle with some impersonating law enforcement agencies directly.

In these cases, they have a fairly high success rate. FTC statistics show that more than one in five people who reported a law enforcement impostor scam lost money, with a median loss of $3,000 last year. Victims learn there is no such thing as easy grant money.

With the federal government issuing billions of dollars in relief funding during the pandemic, scammers took full advantage by making up various grant programs. While the number of grant scams reported is down, those victimized are losing more money than they did prior to the pandemic.

The second most popular target of scammers is Medicare. While there are many reports of these scams, people rarely fall victim to them. In 2021, there were nearly 30,000 Medicare scams reported to the FTC, but just 0.6 percent of respondents reported being victimized.

For more information or further inquiries, contact the Wisconsin BBB at www.bbb.org/wisconsin, 414-847-6000 or 1-800-273-1002. Consumers also can find more information about how to protect themselves from scams by following the Wisconsin BBB on Facebook, Twitter, Instagram and YouTube.

Feel free to contact us with questions and/or comments.