But the bulk of the losses last year, $43 billion, stemmed from identity theft scams where criminals interact directly with consumers to steal their information through methods such as robocalls and phishing emails. Victims of these scams lost $1,100 on average, according to Javelin.
“Identity fraud has evolved and now reflects the lengths criminals will take to directly target consumers in order to steal their personally identifiable information,” says John Buzzard, a lead fraud and security analyst with Javelin Strategy & Research.
Because the Covid-19 pandemic changed the way people shopped and transferred money, many criminals targeted digital wallet and peer-to-peer payment methods such as Apple Pay and Zelle. About 18 million victims fell prey to scams through these digital payment methods last year, Javelin found.
“The culture of fraud is clearly shifting. The pandemic has created so many more points of vulnerability for families and businesses,” says Paige Schaffer, CEO of global identity and cyber protection services at Generali Global Assistance.
Here are three common red flags to watch for when it comes to identity theft scams and how to handle them.
1. Unsolicited calls or emails
Spoofing technology has made it easier than ever for scammers to impersonate anyone, from government agencies like the IRS to your favorite retailer. In order to protect yourself, most experts recommend that consumers avoid picking up any calls from unfamiliar phone numbers. Instead, let them roll into voicemail for further scrutiny.
If you do get a message that you think is legitimately from a government agency, call or email them back through contact information listed on their website. Don’t reply directly.
If you answer a call, keep in mind that U.S. government agencies won’t ask you to pay for information or services upfront. Additionally, government agencies typically won’t call, text, email or contact you on social media to ask for your Social Security, bank account or credit card number. If you receive messages asking for this information, it’s likely a scam.
2. High-pressure tactics
Another big tipoff that a call or message is from a scammer is if they say that they need sensitive information right away. It’s usually a red flag if something needs to be done immediately or if there are threats that you’ll lose money if immediate action is not taken.
But don’t allow yourself to be rushed into buying anything or giving away any information. “Take a breather,” recommends Ron Schlecht, managing partner at cybersecurity firm BTB Security.
And make sure you stay up-to-date on the latest scam tactics and data breaches. The FTC keeps on top of the fraud trends and issues consumer alerts about what they find. You can sign up for email updates or visit the FTC’s coronavirus scam page.
3. Outdated passwords
Many identity theft scams are done by fraudsters who have obtained log-in information from data breaches that have occurred within the past few years.
That’s why it’s important to regularly check your passwords to see if they’ve been compromised. Google offers a free password checkup tool that shows you which accounts have vulnerable or compromised passwords. Additionally, sites like HaveIBeenPwned.com can help uncover if your email has been involved in a data breach.
Regularly updating passwords can help shut down unauthorized access to your accounts, says James Lee, chief operating officer of the Identity Theft Resource Center.
“It’s inconvenient. It’s a pain, but you’ve got to do it,” Lee says. And don’t just use a new password across the board. Lee recommends creating a unique pass phrase on every account, such as the name of a song or a book title. “It’s easy to remember,” he says.
The longer and more complex you can make it, the more secure your password is. A scammer using encryption tools to hack their way in your account can probably figure out a six-character password that only uses letters in a matter of seconds, Lee says. But it will take decades to crack a 12-character pass phrase that uses letters and numbers.
Even if you’re using a secure pass phrase as your log in, Lee also recommends enabling two-factor authentication on your accounts if it’s available. This generally requires you to not only enter a password, but also confirm your identity by logging onto your phone or entering a code texted or emailed to you.
Nearly 1 in 3 Americans say they’ve fallen victim to a phone scam in the past year, like the ones where someone calls pretending to be from the IRS or from a company inquiring about an expiring warranty on your vehicle.
That’s according to a new report from Truecaller that finds roughly 59.4 million Americans have lost money to phone scams over the past year. About 19% fell victim more than once, according to the report, which was undertaken in partnership with The Harris Poll in March 2021.
Not only is the number of victims on the rise, the expense of these scams is also up. The average reported loss was about $502 per person, the highest amount on record since Truecaller began tracking this data in 2014 and up significantly from the average loss of $351 reported in 2020.
“It’s very disappointing to me, and alarming that people are getting convinced to send criminals money,” says Clayton LiaBraaten, senior advisory board member at Truecaller. Yet it’s not surprising, he adds, considering how convincing scammers can be. “These criminals are incredibly clever in the way that they manipulate people.”
Fraudsters are very good at what they do; they understand all of the technology, all of the loopholes and all of the gaps to get into the networks, as well as the psychosocial approach to intimidating people and getting them to pay, LiaBratten says.
Truecaller found that younger Americans are more susceptible to phone scams. And across generations, about 59.4% of men reported being scammed, compared to just 38.3% of women.
Americans will likely see a short-term dip in scam calls over the summer, in part because the Federal Communications Commission is requiring providers to implement caller ID authentication technology by June 30, 2021. LiaBraaten says this will help mitigate spoofing, but it’s not a silver bullet.
Every time regulators or businesses find a new anti-fraud solution, put in a firewall or develop some sort of new anti-malware software, the criminals find a way to get around it. “They’re not going to give up,” LiaBraaten says.
Yet there are ways that consumers can make it more difficult for scammers to successfully scam money from them.
Let unknown calls go to voicemail
Most experts recommend that consumers avoid picking up any calls from unfamiliar phone numbers. Instead, let them roll into voicemail for further scrutiny. “If somebody doesn’t leave a voicemail, then it obviously wasn’t that important,” LiaBraaten says.
Although the FCC’s new requirement will make it more difficult for scammers to use spoofing technology to impersonate government agencies and legitimate businesses, consumers should still be on guard.
Additionally, LiaBraaten says Americans should be leery about picking up the phone for out-of-area calls. If someone is calling you from Lexington, Kentucky, or Boise, Idaho, and you have no relationships to people or businesses there, the simplest solution is to let the call go to voicemail.
Block and report spam calls
If you do suspect a call is spam, block it, LiaBraaten says. You can manually block a call on your phone or download a robocall-blocking app.
Most mobile service providers have free software or apps that allow you to screen or block automated calls. Some, like Verizon, have software that automatically blocks some of the worst robocalls throughout their network, while others have separate options that consumers can install.
If a caller didn’t leave a voicemail and you have no idea who it was, you can use a number lookup to see if it’s attributed to any business that you might be affiliated with. If not, block it. Some apps allow you to also report the number so that they can warn other users. Additionally, you can report unwanted calls through the national Do Not Call Registry.
Limit how you give your number out
Be careful where and how you give out your number. There are a lot of ways scammers can get their hands on your phone number, but you don’t want to make it any easier for them, LiaBraaten says.
Do you really need to include it on websites or social media accounts? Do you need to give it out to retailers when they ask at checkout?
“This is high enough at $500 a pop that people should be treating their phone numbers like they treat their bank account numbers,” LiaBraaten says.
Consumers lost $5.8 billion to fraud last year — up 70% over 2020
American consumers reported losing more than $5.8 billion to fraud last year, up from $3.4 billion in 2020 (an increase of more than 70%), the Federal Trade Commission said Tuesday.
Almost 2.8 million consumers filed a fraud report to the agency in 2021 — the highest number on record dating back to 2001, according to the FTC. About 25% of those scams led to a financial loss, with the typical person losing $500.
The true toll is almost certainly higher since some incidents likely weren’t reported to the agency.
Those figures also don’t include reports of identity theft and other categories. More than 1.4 million Americans also reported being a victim of identity theft in 2021; another 1.5 million filed complaints related to “other” categories (including credit reporting companies failing to investigate disputed information, or debt collectors falsely representing the amount or status of debt). Both sums are annual records, according to the FTC.
Fraud has ballooned during the Covid-19 pandemic, as con artists have preyed on consumer fear and confusion. They peddled fake health products (such as hand sanitizer and masks) and used stolen data to file for unemployment and other benefits in victims’ names, for example.
Imposter scams were the most prevalent form of fraud in 2021, accounting for more than a third of reports, the FTC said. The typical victim lost $1,000.
However, other forms of fraud were costlier on a per-person basis — investment fraud cost $3,000 per victim in 2021, for example, the largest such sum. Business and job-opportunity scams cost the typical victim almost $2,000.
Younger Americans tended to be fraud targets most frequently, but those over age 70 reported losing more money. The typical person over age 80 lost $1,500, triple that of those in their 20s.
New Data Shows FTC Received 2.8 Million Fraud Reports from Consumers in 2021
Newly released Federal Trade Commission data shows that consumers reported losing more than $5.8 billion to fraud in 2021, an increase of more than 70 percent over the previous year.
The FTC received fraud reports from more than 2.8 million consumers last year, with the most commonly reported category once again being imposter scams, followed by online shopping scams.
Prizes, sweepstakes, and lotteries; internet services; and business and job opportunities rounded out the top five fraud categories.
Of the losses reported by consumers, more than $2.3 billion of losses reported last year were due to imposter scams—up from $1.2 billion in 2020, while online shopping accounted for about $392 million in reported losses from consumers—up from $246 million in 2020.
The FTC’s Consumer Sentinel Network (Sentinel) is a database that receives reports directly from consumers, as well as from federal, state, and local law enforcement agencies, the Better Business Bureau, industry members, and non-profit organizations. Twenty-five states now contribute to Sentinel. Reports from around the country about consumer protection issues are a key resource for FTC investigations that stop illegal activities and, when possible, provide refunds to consumers.
Sentinel received more than 5.7 million reports in 2021; these include the fraud reports detailed above, as well as identity theft reports and complaints related to other consumer issues, such as problems with credit bureaus and banks and lenders. In 2021, there were nearly 1.4 million reports of identity theft received by the FTC.
The FTC uses the reports it receives through Sentinel as the starting point for many of its law enforcement investigations, and the agency also shares these reports with approximately 2,800 federal, state, local, and international law enforcement professionals. While the FTC does not intervene in individual complaints, Sentinel reports are a vital part of the agency’s law enforcement mission.
A full breakdown of reports received in 2021 is now available on the FTC’s data analysis site at ftc.gov/exploredata. The data dashboards there break down the reports across a numbers of categories, including by state and metropolitan area, as well as exploring a number of subcategories of fraud reports.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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The top frauds of 2020
2020 was a tough year. Between the pandemic and the economic crisis, we all had our hands full. And scammers didn’t take any time off either — 2020 was a busy year for fraud. In 2020, the FTC got more than 2.2 million reports about fraud, with people telling us they lost nearly $3.3 billion.
Here’s what we heard from you in 2020:
- The top fraud of 2020 was imposter scams. Scammers showed up wearing many different hats — from that of a government official, to a known business, to a dear family member or friend. The FTC got nearly 500,000 reports of imposter scams, and people reported losing a lot of money to these scammers: $1.2 billion, with a median loss of $850. Government and business imposter scams were also among the top categories of COVID-19 and stimulus related reports, proving once again, that scammers follow the headlines.
- Online shopping and negative reviews was the second most reported fraud category of 2020. With the pandemic came an increase in online shopping, and then a wave of reports about sellers failing to deliver on promises — or just failing to deliver, period. The FTC got more than 350,000 reports, with people telling us they lost a total of more than $245 million, with a median loss of about $100.
- The phone is still the top way that scammers are reaching us — both through phone calls and text messages. In fact, there was a sharp increase in the number of reports saying that scammers contacted them by text message. And, not surprisingly, many of these text messages were related to the pandemic. We heard about text message scams luring people to click on links with promises of stimulus relief, economic relief or loans for small businesses, or “waiting packages.”
We can only fight scammers with your help. When you report to the FTC, your report is instantly available to more than 3,000 federal, state, and local law enforcers across the country who are looking to fight fraud. If you’ve spotted a scam, tell us at ReportFraud.ftc.gov.
Scams cheat older Americans out of almost $3 billion a year. Here’s what to watch for
- Seniors lose an estimated $2.9 billion annually from financial exploitation, according to the Senate Special Committee on Aging.
- Impersonating the IRS was the number one scam targeting seniors in 2018.
- One in 10 Americans age 65 or older who lives at home will become a victim of abuse, according to recent testimony from Kansas Attorney General Derek Schmidt.
Seniors lose an estimated $2.9 billion annually from financial exploitation, according to the Senate Special Committee on Aging.
Impersonating the IRS was the No. 1 scam targeting seniors in 2018.
More than 1,500 seniors across the country contacted the committee’s fraud hotline in 2018; however, Kansas Attorney General Derek Schmidt said in recent testimony that only 1 in every 24 cases of elder exploitation gets reported.
“Despite that under-reporting, statistically one in every 10 Americans age 65 or older who lives at home will become a victim of abuse,” he wrote.
Here are the top 10 scams targeting seniors last year, according to the Senate aging committee’s 2019 Fraud Book:
1. IRS impersonators
More than 2.4 million Americans have been targeted by scammers impersonating IRS officials and more than 14,700 taxpayers have lost more than $72.8 million since 2013, according to the Treasury Inspector General for Tax Administration. In this case, criminals generally threaten victims with owing back taxes and warn foreclosure, arrest, or deportation if a payment isn’t made.
2. Robocalls
Nearly 2.4 billion robocalls are made each month, according to the Federal Communications Commission. Often originated overseas, callers mask their identities with fake phone numbers and pretend to be from the government or assume a false identity, in efforts to obtain personal information.
3. Sweepstakes scam/Jamaican lottery scam
Sweepstakes scammers falsely claim seniors have won a lottery and need to pay a fee to collect their winnings. The number of sweepstakes scams increased by 45.8 percent between 2013 and 2017, according to the FCC. Sweepstakes scams often come from a “876” number, the country code for Jamaica. At its peak, it was estimated that sophisticated Jamaican con artists placed approximately 30,000 phone calls to the U.S. each day and stole $300 million a year from tens of thousands of seniors, according to law enforcement and FairPoint Communications.
4. Computer tech support fraud
Microsoft estimates that 3.3 million Americans are victims of technical support scams annually, with losses of roughly $1.5 billion per year. Scammers usually pretend to be a reputable technology company like Microsoft, Apple or Dell. They convince victims that their computer has a virus and persuade them to provide personal information and bank account numbers.
5. Elder financial abuse
“Financial exploitation of older Americans is the illegal or improper use of an older adults fund’s property, or assets,” according to the Fraud Book. Seniors lose an estimated $2.9 billion annually due to financial exploitation, although these numbers are likely substantially under-reported, according to the Government Accountability Office. Scammers can include family members, paid home-care workers or strangers who take advantage of seniors’ financial decision-making.
6. Grandparent scams
An increasingly popular scam is the “grandparent scam,” where impostors either pretend to be the victims’ grandchild or claim to be holding the victims’ grandchild. They ask for money and usually never call back.
7. Romance frauds
Romance scams exploit seniors’ loneliness and vulnerability. Twelve percent of people ages 55 to 64 reported using an online dating site or mobile dating app, according to the Pew Research Center. Victims are contacted through a dating site and after trust is built between the two parties, the scammer asks for money for medical emergencies, hotel expenses, hospital bills or visas or other official documents.
8. Fake Social Security calls
Similar to the IRS scam, individuals pretend to work for the Social Security Administration and ask for victims’ Social Security number, date of birth, maiden name and bank account information.
9. Lawsuit or arrest threats
In the impending lawsuit scam, victims are called by someone pretending to be from a law enforcement agency. The scammers threaten a lawsuit or explain a warrant is out for the victim’s arrest if they do not pay a fine immediately. Often, the caller says the penalty was issued for failing to report for jury duty or not paying taxes.
10. Identity theft
Identity theft was the second-most common type of consumer complaint in 2017, with 371,061 complaints, according to the Federal Trade Commission. Nearly 4 of 10 identity theft complaints reported to the FTC in 2017 came from consumers ages 50 and over.
Identity thieves not only drain bank accounts and charge credit cards, but they also defraud the government and taxpayers by using stolen personal information to submit fraudulent billings to Medicare and Medicaid.
The Senate aging committee recommends that victims place a fraud alert, report identity theft or file a police report if a scam is suspected.
