Hot Scam: Robocallers Pushing a Fake Car Warranty

Spam calls are ubiquitous as fraudsters have found more ways to deceive consumers and trick them into buying a car warranty or other services and giving up personal data.

The number of voice and text message spams, also known as robo calls and robo texts, has escalated even as consumers attempt to thwart them. Cyber criminals are looking to make a quick buck and steal your identity.

Vehicle warranties are the hot scam at the moment, followed by bogus Medicare calls  and tax fraud pitches, according to a report conducted by TrueCaller, a Stockholm-based caller ID and spam blocking app.

Phone scams are lucrative to fraudsters The average amount of money lost to phone scams was $577, up 14.94% from the average a year earlier of $502.

Over 68 million Americans fell for a racket, costing a total of $39.5 billion, the highest amount ever, the report said. 

Most Popular Phone Scams

Some phone spams are innocuous and just aggressive and misleading marketing, Brian Contos, chief security officer of Phosphorus Cybersecurity, told TheStreet. Many others, however, are more malicious with the goal of stealing people’s money and identity by infecting their  devices with malware.

The scammers are sophisticated and keep adopting strategies that make the calls look more authentic. One common ploy being used by hackers is called “neighbor spoofing,” which is when the criminal uses local area code phone numbers to target people.

Car warranty scams are a “huge problem” and have exploded recently, Contos said. They lure people by making the situation sound urgent.  “If the victim falls for it and pays for the fake warranty renewal, they will lose that money – usually between $1,000 to $3,000,” Contos said.

Even worse, the fake customer support representative’s plan is to also steal the person’s financial and personal information, such as the date of birth and Social Security Number.

Because car registration data is easily available, it makes it easy for scammers to target people.

“This allows the scammer to effectively impersonate a legitimate car dealership or insurance company because they will know the actual make, model and year of your vehicle and may even know the license plate number,” he said. “This is usually enough to convince most people that they are dealing with a real company and not a scammer.”

Since car repairs can be costly, the expiration of a warranty can increase the amount of anxiety owners feel.

“Criminals know they can put pressure on a consumer in this way and use their fears and anxieties to short circuit their common sense,” Jason Glassberg, co-founder of Casaba Security, a Redmond, Wash.-based ethical hacking company, said.

Another goal of these scam calls is to verify active phone numbers, resulting in more calls.

“These calls will either request the victim to hold until an operator joins the call or they ask the victim to press a number on their screen to speak to an operator or to be removed from the call list,” Contos said. “No matter what button the consumer pushes, she will then be verified as an active phone number and that data will be sold to other scammers.”

Text Scams

Hackers use various scare tactics in fake texts, including claiming that people owe back taxes to the IRS and must pay immediately to avoid arrest along with fake Venmo users and Zelle me-to-me scams, he said.

Fraudsters are also constantly working on new scams to attract unsuspecting victims.

The top scams include ones telling consumers that they ordered expensive services or items like an iPhone to trick people by asking them to press one or call back, Alex Quilici, CEO at YouMail, an Irvine, Calif.-based provider of app-based call protection services, told TheStreet.

“We’re seeing it hit a lot more brands now,” he said.

Scammers often follow the news cycle to con people into giving up their information, Alex Hamerstone, advisory solutions director at TrustedSec, a Fairlawn, Ohio-based ethical hacking and cyber incident response company, told TheStreet.

“With the economy souring, there are a lot more scam calls about foreclosures,” he said.

A new fraud to look out for is the email scam that has an offer that is too good to be true and includes a phone number to call, Rich Quattrocchi, vice president of digital transformation at Mutare, a Chicago-based enterprise communications and security provider, told TheStreet.

“Once you dial the number, the scammers have you and you are off guard,” he said.

Tips for Consumers

Consumers do not have many options on blocking spam callers because they use VoIP tools that allow them to generate virtually an unlimited number of phone numbers, Contos said.

“They will use a different number to call you each time,” he said.

Avoid sharing your cell phone number on social media and marketing requests, such as a rewards account, he recommended.

“You’re better off using a virtual number like Google Voice which will route to your cell phone and you can change it at any time,” Contos said.

Spam text messages should be treated like a suspicious email.

“It’s also important that you never call any number that is included in the message," he said. "Robo texts will try to manipulate your emotions in order to trick you into doing something foolish. They will try to frighten you or play on your anxieties about overdue bills or overdrawn accounts."

One tool to fight back is to install a reputable app that blocks voice and text spam such as Nomorobo, RoboKiller, YouMail and Hiya, Quattrocchi said.

“These applications are very good at reducing unwanted calls but are not perfect,” he said. “Some annoying scam calls will get through. I recently added Nomorobo Max to my cell phone and have not received a robocall since installing it.”

The call screening protection offered by mobile carriers is not that effective and “criminals will still get through,” Glassberg told TheStreet.