A Deep Dive into the Business of Robocall Scams

Author: PeopleFinders on May 19th, 2020
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Robocallers are more common than they’ve ever been before. Some people–including you?–may receive multiple robocalls every day.

You may be able to send those robocalls to voicemail, or block numbers you don’t know. But that doesn’t make robocallers go away.

Here’s the full picture about the robocalling business.

What Are Robocalls?

Essentially, robocalling is a mass calling scheme that allows both genuine advertisers and shifty scammers to contact thousands of people in a very short period. Phone numbers are randomly generated and then called en masse by an automated system. Once you pick up, you hear a recorded message. If you interact with the call, you’re usually routed to a live individual.

Robocalling is an attractive option for people who are only out to make money. Live operators only have to interact with a fraction of the people they call. And that means the profit margin is much higher. Even though robocalling is illegal unless you’ve given a company permission to contact you, the number of illegal robocalls is steadily rising.

How Do Robocallers Make Money?

Robocallers make money in two main ways: convincing people to give money, and utilizing tools that help them make money automatically.

One of the most effective ways that scammers will use robocalls is by pretending to be a legitimate agency. This type of scam comes in many forms. You may receive a robocall from someone pretending to be TripAdvisor, Amazon, or another popular website. Or they may even pretend to be from a government agency, such as the Social Security Administration or FBI.

Another lesser-known tactic works even if you don’t pick up the phone. It’s complicated, but it relies entirely upon spoofing caller ID:

A robocaller will purchase a huge block of unused phone numbers, create fake IDs for each, and then submit them to caller ID databases. When a call is made, the phone company making the call sends a query to caller ID databases, which charges a fraction of a cent per caller ID. Caller ID databases will often pass a portion of those fees to the company making calls, which means that the robocaller makes money off the caller ID program.

This doesn’t just work on fake phone numbers; it also works on real ones. When your phone number comes up on caller ID, the companies still pay that fraction of a penny, and the robocallers still get a portion of it.

Is Robocalling Actually Profitable?

The reason robocalling still happens is that, as long as an operation isn’t caught by the FTC, it can make a lot of money.

These agencies’ main target, of course, is their general scams. Whether they’re looking for Social Security Numbers, bank account information, or just plain cash payments, they can make a lot of money off unwitting targets.

Robocallers may make millions of calls every week. But they’re not expecting each one to make them money. Of those that accept the robocall, only a fraction make it to a live operator. And only a fraction of those are actually taken in by the scam. However, if a scam makes an agency $5,000, and the company is capturing a few dozen of them per day, that adds up quickly.

Caller ID scams don’t end up paying much, as a company may only receive around $100 for every 100,000 calls. However, scammers tend to use that money to cover operating costs. And if they’re making millions of calls regularly, $100 can quickly turn into thousands of dollars per month.

How Can I Protect Myself?

As long as there’s still a monetary incentive for robocallers to contact you, they’ll keep doing it. There’s no way to stop robocalls for good. But there’s a way to make sure you only pick up for real people. Use a site like PeopleFinders to check all your unknown phone calls. Simply enter a number, and the robocaller lookup may be able to give you immediate information on a caller’s identity. And if you don’t recognize it, you can send it immediately to voicemail.

With PeopleFinders, you can keep yourself safe from scammers. Read the PeopleFinders blog for more ideas about how to keep yourself safe from threats near and far.

Image attribution: sdecoret – stock.adobe.com

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Categorized in: Scams