Scammers are making more money per episode of fraud, new government data suggests.
While the number of fraud reports recorded through the Federal Trade Commission’s database fell to 2.4 million in 2022 from 2.9 million, the aggregate loss from those instances reached nearly $8.8 billion. That’s up 44% from the $6.1 billion reported in 2021 to the FTC.
Investment scams cost the most — more than $3.8 billion — compared with other categories and more than double the $1.8 billion reported in 2021. The second-highest reported loss amount came from imposter scams — the most prevalent form of fraud reported — with losses of $2.6 billion reported, up from $2.4 billion in 2021.
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Imposter scams involve criminals pretending to be someone else to steal the victim’s money or personal information. This could include romance scams or people claiming to be a government official or a relative in distress, for example.
Young adults fall prey to scams more often
Young adults (ages 20 to 29) reported losing money more often than older adults (ages 70 to 79). But when the latter did lose money, they lost more than anyone else, according to the FTC. And if people paid a scammer, the biggest losses came from bank transfers ($1.5 billion) and cryptocurrency ($1.4 billion).
Scams that started on social media resulted in people reporting losing $1.2 billion. Additionally, there were more than 1.1 million reports of identity theft in 2022.
How to avoid falling victim to fraud
Here are some tips to help you avoid being the victim of fraud, according to Erin Witte, director of consumer protection for the Consumer Federation of America:
- Slow down: Scammers “often create a false sense of urgency, making you think you have to respond immediately or something terrible will happen,” Witte said. “Slow down and take a minute to digest what you are hearing or reading.”
- Avoid checks or gift cards: “Be wary of these payment methods,” she said. “Being asked to cash a check and return a portion, or being asked to purchase gift cards are big red flags that it is likely a scam.”
- Ask questions: “Ask as many questions as you can to the person calling or emailing you,” she said. “Also ask a friend or someone you trust what they think about what you’re being told — they can often give you some perspective about whether the information you’re being provided is legitimate.”
- Make a report: ”Tell your local consumer affairs agency, your state attorney general, and the Federal Trade Commission about your experience,” Witte said. “You may help other people avoid being scammed.”