by Rosario Méndez, Attorney, Division of Consumer and Business Education, FTC
Today, the FTC joined forces with numerous federal, state, and local government partners in Operation Income Illusion, an effort to fight income scams and help people recognize and avoid them. With record unemployment and the ongoing financial impact of the pandemic, many people are looking to make ends meet — and scammers are pitching income scams with false promises of success and financial security.
In a typical pitch, scammers will say that you can make a lot of money, for example, working from home with little time and effort, or starting your own online business. But those promises of big money are all an income illusion. In fact, in the first nine months of 2020 alone, people reported to the FTC that they lost at least $150 million. The total amount of alleged injury for the FTC cases announced today is over $1 billion. Income scams hit people hard.
Sometimes these scammers focus their pitches on particular communities. The cases announced today by the FTC and its law enforcement partners show that people in every community need to be on the alert for income scams. In one case, a work-from-home scam targeted Latinas through Spanish language TV ads. In another case, an alleged investment scam affected older adults, retirees, and immigrants. And in yet another case, we saw servicemembers, veterans, students, and college-age adults targeted with a business coaching scam.
When the FTC analyzed customer data from some of our cases, we found that in income scams where the average loss was less than $500, people who lost money were 44% more likely to live in majority Black communities. You can spot income scams if you know the scammers’ tactics.
And if you know the signs of an income scam you can avoid it and help others avoid it, too. If you spot an income scam, report it at ReportFraud.ftc.gov.
Watch this video to learn more: