According to the Federal Trade Commission (FTC), consumers lost more than $5.8 billion to fraud in 2021, a 70% increase over the prior year. That represents almost 2.8 million people, setting an annual record.
The rise in fraud and hard dollar losses is often attributed to new fraud trends and complex schemes such as cryptocurrency fraud. However, simple scams still work remarkably well and can be conducted via personal communication channels such as text messaging. For example, almost all of us can remember receiving something like the following pesky text messages:
- "Your debit card has been locked; click here to reactivate."
- "Missed delivery from UPS; call now to receive your package."
- "Your bank is closing your account. Please confirm your PIN immediately."
Text messaging has become an effective fraud platform because the messages quickly grab your attention and instill a sense of urgency to act. The more straightforward the message, the more likely readers will take it seriously. While consumers have become accustomed to phishing emails and generally understand not to click on unsolicited links or open attachments, the text messaging platform is still considered trustworthy. Friends, family, and reliable institutions use texts to communicate, not criminals, right? Unfortunately, this is not always true. In 2021 the FTC logged 378,119 fraud complaints about unwanted text messages, including fraud attempts. This type of fraud is referred to as smishing or SMS phishing.
Smishing uses social engineering to get personal information via text messaging. The fraudster sending smishing messages impersonates someone with authority, such as a government agency or financial institution.