Imposter Scams: How They Work
As a business dealing with customers daily, you’ve probably encountered your fair share of shady characters trying to pull a fast one. From criminals using stolen credit cards to those impersonating legitimate customers, you must be on guard for imposter scams lurking about.
According to the FTC, imposter scams were the number one fraud reported by businesses last year, racking up over $2 billion in losses. That’s a lot of money going to criminals pretending to be someone they’re not!
So, how do you avoid getting duped by a scammer as a business? Tapping into your inner Sherlock Holmes and getting wiser about the kinds of suspect behavior fraudsters display. You’ve got to become a human lie detector and get inside the minds of these imposters if you want to sniff them out.
In this post, I’ll break down the sneaky psychology scammers use, red flags to watch for, and ways to catch an imposter while still providing five-star service to your actual customers. After all, not every customer is a wolf in sheep’s clothing out to scam you.
Let’s make sure you don’t get fooled. Also, don’t become so distrustful that you suspect every person just trying to open an account or make a purchase. Sound good? Read on to level up your fraud detection skills.
Understanding the Fraudster Mindset
To outsmart a scammer, you must understand what motivates them and how they think. Fraudsters often share some common psychological traits and motivations:
- Financial motivations – Greed, desperation, debt, or just wanting to make easy money drive many scammers. They see duping others as a quick path to riches. Financial gain is often the number one motivator.
- Deception and manipulation – Scammers are good at lying, creating fake identities, and persuading people to hand over money or information. They exploit trust and look for weaknesses.
- Willingness to take risks – Fraudsters are often willing to take big risks for potential payouts, caring little about consequences. Laws and rules don’t deter them—high-risk tolerance.
- Lack of empathy – Many scammers lack remorse and don’t care about the harm they cause others. To them, victims are just anonymous targets. They dehumanize their victims.
Understanding these deeper psychological drivers can help you recognize scammers’ behaviors and patterns. You’ll be more likely to pick up on subtle cues. Let me show you now what signals a crime. What do imposters give away at first sight?
5 Red Flags to Watch For
Now that we know the underlying motivations and psychology of serial scammers let’s take a look at some common red flags to watch out for:
- Evasiveness about personal/financial details – They may be vague about identity, income sources, or evade questions about finances. Legit customers readily provide this info.
- Urgency to rush transactions like wire transfers – Scammers insist on immediate processing, bypassing holds or security reviews. Real customers understand reasonable wait times for large financial transactions.
- Suspicious requests to change account details – Odd demands like altering bank transfer numbers or recipient names at the last minute should prompt identity verification.
- Reluctance for identity verification – Avoiding video chats, in-person meetings, or sharing official IDs could signal they are hiding their real identity or financial credentials.
- Pushiness about policies like holds or transfer limits – Scammers may pressure and threaten staff to skirt controls. Real customers respect policies that protect against fraud.
Watch for patterns of red flags, and trust your intuition. If something seems off, investigate thoroughly before approving financial transactions.
Ready for more? Here is what I suggest in terms of verification tips:
Top 4 Verification Strategies
Establishing rigorous verification procedures is essential for identifying fraudulent customers and transactions. Do not cut corners or make exceptions when it comes to due diligence. A thorough verification process protects your business, employees, and legitimate customers.
1. Require Extensive Identification Upfront
Collect official government ID, social security numbers, utility bills, bank statements, business licenses, and other proof to corroborate customer identities. Screen IDs for any signs of alteration, inconsistencies, or anything suspicious that could indicate forgery or fraudulent use. Use services to run background checks, verify SSNs, match names, and cross-check customer information against public records.
2. Independently Look Up Contact Information
If you are suspicious, dig into those phone numbers, emails, and addresses yourself – search for any cracks in their story. Look for the person online to check claimed credentials, residence, occupation, etc. Verify that IP addresses used for logins and transactions originate from expected locations. Give their phone number a ring to see if it reaches an actual person matching their alleged identity.
3. Enable Account Monitoring and Authentication
Use multi-factor authentication for logins and transactions so you know it’s really them. Implement technology to monitor activity in real-time and flag anything suspicious for review ASAP. Check usage patterns – IP addresses, times, locations – for anomalies. Put temporary holds on big transfers to verify identity before funds vanish.
4. Investigate Anomalies and Evasiveness
If anything seems off, hit pause on approvals and dig deeper. Stonewalling on verification is a huge red flag – consider restricting account access to prevent fraud. Document irregularities thoroughly in case a pattern emerges. Trust your instincts – it’s better to temporarily inconvenience a customer than give a scammer the green light.
Fraud prevention comes down to vigilance, skepticism, and verification. But it also requires empathy, patience, and understanding so legitimate customers don’t feel mistreated. Maintain high standards for security without compromising your human touch.
Understand the scammer mindset, watch for red flags, require extensive identity proofing, and trust your intuition. This way, you can stay ahead of fraudsters seeking to take advantage. You’ll thank me.
Stay focused on the human side of every interaction, and you can keep transactions smooth as silk for your real customers while slamming the door on scammers.
How To Report An Imposter Scam
Let your close family and online friends know about these tips on avoiding imposter scams. Share this page if it was helpful. Meanwhile, report scammers and any other suspicious activity to the Federal Trade Commission (FTC) using the portal below:
How To Protect Yourself More
If you want to be amongst the first to receive fraud alerts every week, subscribe to our Scam Detector newsletter. You will receive periodic messages from our team, with insightful tips. That will include how to prevent fraud and information about the newest tools you can use to fight crime.
Verify a website below
Are you just about to make a purchase online? See if the website is legit with our validator: