Beware of Snowballing Scams!

DATCP has noticed a troubling trend: Scammers are chaining together different scam techniques to start small, but quickly “snowball” into a much bigger, more elaborate scheme. Many consumers expect a scammer will only use one of these methods to steal their money or data, then move on. But it might be just the beginning. Consumers have lost hundreds of thousands of dollars to professional scammers.

It works like this: The scammer lures consumers in using a common, small-scale, tried-and-true tactic like impersonation, fake pop-ups, or calls/texts. They may even know the target’s name and personal details. They gain the target’s trust and establish credibility, then present a problem. Something has gone wrong and the consumer is in financial or legal jeopardy! This is where threats are made, like:

· The target’s identity has been compromised.

· Their life savings are being accessed by a stranger.

· There is a warrant out for their arrest.

The scammer offers a solution: the target must transfer their funds somewhere for safe keeping. The excuses vary, but the intent is always the same: they want the target to willingly give their money to a stranger, usually through gift cards or cryptocurrency, but it could even be gold bars.

When scams snowball, multiple scammers are often involved in the scheme. The first person you speak with might transfer you to someone else, who has you enter your information on a fake government website, then a third person from that fake agency calls you, making the scam more believable. “Snowballing” is not one specific scam. It is a tactic that scammers use to maximize their gains, employing multiple methods within a single scheme. Recent examples:

· A scammer impersonating USPS told a consumer their identity had been stolen and someone had opened new bank accounts in their name. Later, the consumer was contacted by a fake DEA agent who claimed there was an arrest warrant for them, saying their name was associated with money laundering and drug trafficking. They sent the scammer over $9,000 in gift cards.

· Another Wisconsin consumer paid $155,000 in fake taxes and fees after being told they won the Mega Millions lottery. Later, a fake consumer protection agency called and asked for money. The consumer refused and was contacted by a third imposter who said were a federal agent and the first two callers were scammers – then asked for money to help recover the stolen funds.

· A third Wisconsin consumer clicked a fake virus pop-up and after weeks of contact with scammers pretending at different times to be Windows, the FTC, and the Department of the Treasury, lost nearly half a million dollars by converting their savings to gold bars and handing them over to a government imposter.

Remember these tips to avoid snowballing scams:

· Take a moment to ask yourself at each step if everything seems legitimate. If anything is suspicious, stop immediately and contact a local law enforcement agency or DATCP.

· Talk to someone you trust before you pay any money or provide any private information. Sometimes, getting a second opinion can help us see things more clearly – especially if the scammer is telling you to keep it all a secret or act immediately.

· If you are ever asked to send money to a business or government agency by wire transfer, cash, gift cards, cryptocurrency, or other unusual payment method like gold bars – that is a scam.