Investment Scams Drive $9bn in Fraud in 2022

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Americans lost $8.8bn to fraud last year, with investment scams ($3.8bn) the biggest money-maker for fraudsters, according to new data from the FTC.

The consumer protection agency said investment fraud had surged by over 100% from 2021, when the figure stood at $1.8bn.

That chimes with the most recent FBI report which found investment scams made $1.5bn for fraudsters in 2021, the second highest of any cybercrime type.

In second place on the FTC list came “imposter scams,” which garnered $2.8bn, up slightly from 2021 figures of $2.4bn.

As the name suggests, these could be calls, texts or emails where a victim is contacted out of the blue by a scammer pretending to be someone else, and socially engineered into handing over their personal and financial information, or paying the fraudster direct.

Losses to business imposters were particularly high, climbing from $453m in 2021 to $660m in 2022.

Social media accounted for the highest overall reported losses, of $1.2bn, perhaps reflecting the trust many users place in content promoted by friends, followers and ‘celebrities’ on these platforms.

Overall, the FTC’s Consumer Sentinel Network received 5.2 million reports in 2022. Identity theft reports were most common, followed by notification of imposter scams and then problems with credit bureaus and info furnishers. The latter typically send information on consumers to organizations like credit bureaus, tenant screening companies and check verification services.

A total of 2.4 million fraud reports were filed with the FTC in 2022, a quarter (26%) of which involved financial losses. The $8.8bn figure works out to a median loss of $650 per victim, the agency said.

However, it’s much higher ($1400) for scams carried out over the phone, highlighting the danger of vishing calls, tech support scams and other tactics designed to trick recipients.

Younger people reported losing money more often to fraudsters than their elders: 43% of 20-29-year-olds did so, versus 23% of 70-79-year-olds.

However, when the latter group did suffer a loss, it was far greater – $1000 versus $548 for the younger group. The median loss for those aged 80+ was even higher still, at $1674.

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