The official cost of texting fraud in 2022 rose to $330 million, representing a fivefold increase since 2019, with an average cost of $1,000 to the victims concerned. But the US Federal Trade Commission (FTC), which issued the figures, acknowledges that this is only the tip of a gigantic cybercrime iceberg, as most phone scams go unreported.
“Reports about text scams spiked in the first six months of the COVID-19 pandemic and have never returned to pre-pandemic levels…Reports about texts impersonating banks are up nearly twentyfold since 2019,” says the FTC.
According to the FTC, bank scams’ median reported loss was $3,000 last year, with many victims reporting giving their Social Security number and other personal information to scammers, leading to possible identity theft. The top companies identified in bank impersonation text scams in 2022 were Bank of America (14 percent), Wells Fargo (12 percent), Chase (12 percent), and Citibank (9 percent). Most text scams overall were from fraudsters impersonating legitimate organizations, with Amazon named as a prime target. In addition to impersonating well-known organizations, scammers use the speed of text communication to their advantage.
“They hope you won’t slow down and think over what’s in the message. Some messages promise a good thing – a gift, a package, or even a job. Others try to make you panic, thinking someone’s in your accounts,” says the FTC.
Text fraud also has more sinister uses
The FTC report largely deals with consumer fraud, which is obviously a huge problem for developed digital economies such as the US. But text fraud sometimes also has other more sinister uses. Many executives, key staff, and government officials use their smartphones to communicate with colleagues and contacts and to access their organizational networks. By conning a single member of staff to fall a text scam and hand over control of their smartphone, cybercriminals, and foreign spies can then potentially have access to an entire corporate or government network.
Rising levels of corporate cybercrime and cyber-espionage mean that millions of smartphones across the US are now seen as entry points by potentially hostile foreign powers such as China – in addition to being cash cows for ordinary cybercriminals.
