Since the beginning of the flu pandemic, scammers have been raking in billions of dollars from American consumers. But scammers aren’t just targeting the elderly; recent evidence suggests that young people are becoming more vulnerable to scams.
U.S. citizens reported a record-breaking $1.2 billion in fraud and scam losses to the Federal Trade Commission (FTC) last year, according to data released on Tuesday.
More than $5.8 billion in fraud losses were reported by 5.7 million people in 2021, an increase of $2 billion in only one year, according to a consumer education specialist at the FTC.
To put it another way, Americans lost an average of $500 to scammers in 2021, which is an increase of 70% over the previous year. Americans will report a loss of more than $3.4 billion in 2020, which is a new record.
Imposter schemes, online retail fraud, bogus sweepstakes, lotteries, and awards were the three most common types of fraud reported to the FTC last year.
More than $2.3 billion in losses were attributed to imposter scams, where someone appears to be a reputable business or acquaintance and then requests for funds. Scams involving imposters were the most common and cost the most in terms of money lost.
Investment-related fraud may have been the most successful scam of 2021. Day trading scams, fraudulent investment opportunities, and bogus investment seminars are all included in this category.
Despite the fact that the FTC received just 79,000 complaints about investment scams last year, 73% of those who filed complaints indicated they had already lost money. In 2021, investment fraud cost the economy $1.6 billion, with each victim losing on average $3,000 in the process.
Scams and fraud in the financial sector are the worst.
California, Texas, Florida, New York, and Pennsylvania topped the list of states with the most scams recorded. These are the states with the largest populations, so this shouldn’t come as a surprise.
The Federal Trade Commission (FTC) has also broken down each state by the number of scams per capita in order to better understand which states are being targeted by scammers.
In terms of scam reports per capita, the five states with the highest number of reports were:
- 14,000 complaints per 100,000 people in Georgia cost the state $113 million in lost revenue.
- A loss of $94 million in complaints was reported in Maryland, where there were 1,415 complaints for every 100,000 people in the state.
- Complaints per 100,000 residents: 1,410 per 100,000 in Delaware, resulting in a total cost of $14.1 million
- More than $69 million was lost in Nevada because of 1,407 complaints per 100,000 residents.
- 13.7 complaints per every 100,000 people in Florida, resulting in $331 million in losses.
- California is the worst-hit state in terms of overall losses. An estimated $820.9 million was taken from residents of the city in 2021.
Who is being conned out of their hard-earned cash?
According to FTC data from prior years, older people are more likely to fall prey to scammers. However, this dynamic has begun to shift since 2017, particularly during the pandemic. For the first time, younger people are coming forward with fraud reports and reporting losses that are far higher than those of older generations.
In 2021, the following age groups reported the greatest financial losses:
- Between the ages of 30 and 39, $598 million was lost.
- Losses totaling $521 million were incurred by those aged 60 to 69
- Losses of $495 million for people in their 40s to 49s
- Losses of $484 million for people in their 50s and 60s
- Ages 70 to 79: $364 million in damages
- Losses of $363 million among those aged 20 to 29 years old
- Losses of $149 million for those aged 80 and over
- Losses for those under the age of 19 are $51 million.
According to the data, cryptocurrency is becoming the preferred method of payment for scammers. Crypto payments accounted for $750 million in overall fraud in 2021, second only to bank payments, which reached $756 million, according to the research.
However, in the fourth quarter of 2021, crypto was the most popular means of payment, with a total of $294 million.
All of this points to the fact that fraudsters are increasingly focusing on younger and more technologically savvy victims.
