For the first time, consumers reported losses of $10 billion in fraud and scams in 2023, an increase of $9 billion compared to what was reported in 2022.
During the video conference: Top scams of 2023- FTC analyzes new dataorganized by Ethnic Media Services, Maria Mayo, acting associate director of the Division of Consumer Response and Operations of the Federal Trade Commission’s Bureau of Consumer Protection, said one in four consumers reported losses averaging $500.
“The top five types of fraud reported were: number one, impostors posing as a trusted entity, which could be a business, a government agency, a family member or a romantic suitor.”
Mayo specified that the second most common type of fraud was online purchases; and number three, prizes and lotteries; and the fourth is investments; and the fifth, business opportunities and job offers.
He pointed out that the category of fraud by impostors is the one that has grown the most in the last three years, with losses of $752 million in 2023.
“An example of an imposter scam is when a consumer receives what appears to be a bank alert about fraudulent activity with their bank account and is given a number to call.”
He indicated that when he called he was transferred to a false federal agent who told him that his money was in danger due to a laundering scheme.
“The consumer takes their funds out of their personal savings and checking account and transfers it to a secure cryptocurrency wallet that the fake federal agent opens to protect their money from a scam, and that’s how the consumer loses everything.”
He explained that investment fraud is when the consumer is contacted by a woman who promises to teach them how to invest, and they end up transferring a sum of $10,000.
Contact and payment methods
Mayo noted that email was one of the most frequent contact methods for scammers in 2023; in 2022 it was text messages; and before, phone calls.
“Consumers who reported that fraud started on social media lost money the most.”
At the same time, he indicated that the majority of scammers use bank transfers and cryptocurrencies in scams that involve investment advice and romances.
Impostor scams
Lois Greisman, associate director of the Division of Marketing Practices of the Federal Trade Commission, specified that the two large categories of impostor scams are those who impersonate government agents such as Social Security, the Tax Collection Service , the Sheriff, local police, immigration, banks, Amazon, Geek Squead, and others.
“Scammers are very insistent, and really good at what they do. One of the things that worries us is the use of artificial intelligence. Scammers can easily use a couple of seconds of your grandmother’s voice and clone it to call and say that a family member may have been in a terrible accident and are in the hospital and have no insurance information, and $10,000 is urgently needed for a emergency surgery that saved his life.”
This is what is known as a turbocharged phishing scam.
How to detect warning signs?
Greisman emphasized that the red flags are when they ask you to send them a bank transfer, by Western Union, Money Gram, gift cards or cryptocurrencies or with the use of cash sending applications like Venmo.
“Scammers like these payment methods because it gives them the greatest degree of anonymity and is most harmful to consumers.”
He also said that police departments find it extremely difficult to trace money through those payment methods, which means the likelihood of recovering it is difficult.
“No matter how they contacted you, whether it was by phone, text, if they insist on paying with bank transfer, gift card, an app or cryptocurrencies it is a huge red flag.”
The importance of reporting
Larissa Bungo, an attorney with the Federal Trade Commission’s Business and Consumer Education Division, encouraged people to report their experiences, which she said is the only way to stop scams and educate about the issue.
“Together we can make a difference to reduce scams.”
He highlighted that scams and bad business practices can be reported at 877-382-4357 and by pressing three, they choose the language of their preference.
“Phone lines are available between 9am and 5pm Eastern Time. To report online you can do so at fraud@ftc.gov.”
He clarified that they can also report anonymously, and provide all the information they feel is important to know the whole story.
“We also receive identity theft reports in multiple languages at 877-438-4338 and press three to speak to someone in your preferred language. We also offer the online option to report identity theft online; In English, visit identitytheft.gov or in Spanish, visit Robodeidentidad.gov.
He said they offer information on how to avoid a scam in 12 languages at ftc.gov/languages.