Gone in Seconds: The rise in text message scams is draining US bank accounts.

The text message created an instant wave of panic.

“Freemsg: Chase, did you try to transfer an amount of $7500? Say Y if recognized, or NO to stop fraud.”

For Ohio resident Kelli Hinton, this was the start of a hard-to-spot scam in which a man posing as a Chase Bank fraud investigator ended up wiping out two of her bank accounts for $15,000.

And Hinton is not alone. His nightmare is part of a huge rise in sophisticated text message-based scams that now affect hundreds of thousands of Americans every year. Sometimes called “smishing,” short for SMS phishing, the scams trick mobile phone users out of their money using messages purporting to be from a person or family business that can be nearly impossible to distinguish from the real thing.

While phishing texts have been around for years, data shows that they are on the rise. In 2022, US phone users received 157 billion robottexts, or more than 440 per person, an 80% increase from 2021, according to the company Robokiller, which offers a scam-blocking service for mobile phones. And last year, more than 321,000 Americans reported falling for a phone smishing scam, with total losses of more than $326 million, according to data from the US Federal Trade Commission.

The problem has become so serious that last month the federal government required cell phone companies to start blocking unwanted text messages, in what the Federal Communications Commission (FCC) described as the first of several planned steps. to combat rampant toll fraud.

Scammers use an endless variety of creative approaches to try to trick people out of their money.

Some pretend to offer jobs, only to trick people into transferring money from their bank accounts for work supplies. Others pretend to be contacting the wrong person in hopes of striking up a conversation, which can then lead to lengthy exchanges that cause the phone user to open their wallet. Another common scam involves getting the name of a person’s boss from a directory or website, then impersonating that boss and asking for a favor that involves the purchase of gift cards. The scammer then asks for photos of the back of the gift cards and says he needs them for the refund. This, in turn, allows thieves to cash the cards and make off with the funds.

Rising scam levels

Many fraudulent text messages pretend to be from a family business, such as Amazon, UPS, or a popular bank.

In Hinton’s case, the scam began with a text message on January 3, claiming to verify if he had authorized $7,500 to be withdrawn from his account. He hadn’t even had time to respond, before a polite man, identifying himself as “Simon from Chase Fraud Investigation,” called from a phone number that seemed to exactly match the 800 number on the back of his card. banking.

He told her that a scammer had accessed her account and that she needed to take immediate action to prevent the money from being transferred. Meanwhile, more text messages were arriving announcing more unauthorized bank transfers coming from his account.

The professional-looking scammer kept her on the phone for over an hour, at one point telling her that she needed to reset her banking credentials and password to stop the fraud. This reset of her password apparently allowed the scammers to authorize wire transfers out of her account.

Hinton realized something was wrong when the caller suddenly hung up and called the bank immediately. But he moved her from one office to another, he said. Meanwhile, the money was gone.

“I was seven months pregnant at the time, and I felt like I was ready to have a stroke,” Hinton said. “That was our money that we were saving for our baby.”

Stefan Koester, a policy analyst at a Washington, DC, technology think tank, nearly fell for a different kind of scam. In January, he received a text message claiming to be from the US Postal Service, saying there was a problem with a package that was to be delivered to him.

When he clicked on the link in the text, Koester said it took him to a website with the exact same layout as the USPS home page. Koester said that he was in a hurry that day, so he didn’t think too much about it and started entering his address information to correct the mail.

It wasn’t until the prompts asked her to enter her credit card number to pay a $3 fee to change her address that Koester stopped in her tracks.

“The level of scams I get is increasing every day,” Koester said, in a tweet warning others about the scam. “This one almost got me.”

Text message scams can be even harder to avoid than phone or email scams, consumer advocates say, because it’s a communication style with more urgency and one we’re more inclined to trust. since normally people only use text messages to communicate with someone. They taste good

“People react more to texts than emails, because it’s so immediate,” said Melanie McGovern, director of public relations for the Better Business Bureau, which tracks thousands of scams annually through its Scam Tracker website. “Scammers know that text messages get opened 95% of the time.”

The scammers, who can be anywhere in the world, use automated systems to send text messages to thousands of phone numbers, often at random, experts said. But all it takes is one or two people to vouch for that scammer out to steal thousands of dollars a day. And few are caught.

“People really need to know what’s going on,” said Amy Nofziger, director of fraud victim support for AARP, which receives hundreds of fraud reports every day from older Americans, who may be particularly vulnerable. “If you get something that asks for a gift card or cryptocurrency exchange, stop! It’s a scam,” she advised. “If they want a social security or credit card number or a bank account password, you have to stop.”

Mounting calls to action

With scams on the rise and criminals acting with apparent impunity, calls for action are mounting.

Some, including Sen. Elizabeth Warren, have urged banks to make it more difficult for scammers to empty accounts, using electronic transfer systems, including Zelle. The federal government is also under pressure; The new rule implemented by the FCC in March will require cell phone companies to block certain texts before they reach consumers, and more regulation may be on the way.

“More than 362,000 robot texts are sent every minute in the United States,” said Raja Krishnamoorthi, an Illinois congressman, citing a 2022 Robokiller report. Krishnamoorthi has introduced federal legislation that explicitly makes it illegal to use automated phone equipment to bombard consumers with text messages, which would give the Federal Communications Commission (FCC) stronger enforcement mechanisms to crack down on scammers. .

The added bank protections might have helped Hinton, who said he reported the wire fraud scam that drained his Chase bank accounts minutes after it happened, while the funds still appeared to be in his accounts, but was unable to get the bank to stop the transfers. .

Reports on the Better Business Bureau’s Scam Tracker website showed that many other Chase customers reported being taken in by the same scam earlier in the year.

Hinton said he has now spoken to the bank dozens of times, filed reports with police and the FBI, and retained a lawyer. But so far, he told her, she has made little progress in recovering the money.

Paul Lussier, a Chase spokesman, called the situation facing Hinton “heartbreaking.” He said the bank is working to educate customers about scams and has added safeguards, such as requiring customers to enter a one-time password sent to their phones before adding new bank transfer recipients to their accounts. But, he said, if a customer gives a fraudster their passwords or account access, the bank doesn’t reimburse them for the losses.

“There are a lot of things we do on the back end to make it harder for scammers to succeed,” he said. “However, consumers also have to be eyes and ears.”

Hinton continues to call on financial institutions to do more to protect customers from having their money instantly ripped off by scammers who can so convincingly impersonate bank clerks.

“It’s like a black hole,” he said. “Once you’re inside, it’s the most frustrating feeling. A guy can dress up as his bank. He can call from the number on the back of his bank card. And there’s nothing you can do.