American consumers lost $8.8 billion to fraud in 2022 — 30% more than in 2021 — according to the latest data from the Federal Trade Commission. That breaks down to a per report median of about $650.
To help prevent you and your loved ones from becoming victims, learn about the five most frequently reported scam types from last year and discover the channels scammers are using the most.
Top 5 Types of Fraud
Americans filed about 2.3 million fraud reports in 2022, down from 2.9 million in 2021. Despite the drop in report quantity, however, the amount of money lost by consumers increased.
Here’s a look at the top five types of fraud reported and their costs:
1. Imposter Scams
Number of reports: 725,989 Percentage of reports claiming lost money: 22% Total loss: $2.6 billion Median loss: $1,000
Imposter scams involve scammers contacting you, often via email, text or phone call, and pretending to be a trusted party that requires your money or personal information. Some of the most common imposter scams involve criminals pretending to be:
— Representatives from government branches such as the Internal Revenue Service.
— Representatives from fake charities.
— A grandchild or other relative of the victim in an emergency situation.
— Employees from a bank or company with which you do business.
— Technical support saying your computer security is at risk.
“Tech support scams most often occur when a pop-up comes up on your computer indicating there is a problem and you are prompted to call the scammer, who often poses as Microsoft, Apple or some security company,” says Steve Weisman, a lawyer and nationally recognized expert in scams, identity theft and cybersecurity.
“They then charge for unnecessary services or, even worse, may lure the victim into providing remote access to their computer, which enables the scammer to steal passwords and other personal information and leads to identity theft,” Weisman says.
2. Online Shopping and Negative Review Scams
Number of reports: 327,000 Percentage of reports claiming lost money: 47% Total loss: $358 million Median loss: $180
Online shopping scams involve ordering something online, paying for it and not getting what you expected. The item may not arrive at all or you may receive something different from what you ordered. When you contact the business, they won’t refund your money or otherwise resolve the problem.
“Most victims of this scam complain that they ordered concert tickets from social media sites or purchased items such as a car from online auctions, but never got the merchandise or the concert tickets end up being fake. They are asked to pay using a payment app, wires or gift cards but don’t realize that once they send the money, they can’t get it back,” says Darius Kingsley, head of consumer business practices at Chase Bank.
3. Prize, Sweepstakes and Lottery Scams
Number of reports: 143,132 Percentage of reports claiming lost money: 13% Total loss: $302 million Median loss: $907
Prize, sweepstakes and lottery scams involve a scammer contacting you to say that you’ve won something. They then ask you to pay some type of fee or provide your payment details to receive your prize. If you comply, they take it and run. If you do win some sort of prize or contest, you should never have to pay anything or provide your financial details to claim the prize.
4. Investment-Related Scams
Number of reports: 104,703 Percentage of reports claiming lost money: 74% Total loss: $3.8 billion Median loss: $5,000
Investment-related scams involve criminals presenting you with an investment opportunity, perhaps via an online ad or infomercial. They often claim the investment is quick, easy and low risk, and may have testimonials from “real” people claiming it’s legitimate. Once you invest your money, however, they don’t deliver the return as promised — or at all.
[6 Scams That Target Your Bank Account]
5. Business and Job Opportunity Scams
Number of reports: 92,723 Percentage of reports claiming lost money: 32% Total loss: $367 million Median loss: $2,000
Business and job opportunity scams promise to help people make money online so they can quit their day jobs. Scammers often promise alluring results if you buy their programs or attend their training sessions. Unfortunately, many victims find their results fall short. Red flags to watch out for include companies using high-pressure sales tactics and those guaranteeing quick and easy money.
Where Are Scammers Reaching Victims?
Scammers use a variety of channels to contact potential victims. In 2022, the top three most common contact methods were text messages, phone calls and emails.
Scammers also targeted victims through websites, apps, social media, direct mail and online ads or pop-ups. While scams are more prevalent on certain channels, it’s important to be vigilant wherever you receive communications from unknown parties.
How to Prevent Falling Victim to Fraud
One way to avoid falling victim to fraud is to be aware of common scams like the ones mentioned. If you have elderly friends or family members, inform them about common scams because they’re often more vulnerable and may have more money at risk.
It’s also good practice to think twice before providing any personal information or payment to anyone who contacts you.
“Don’t reply to an email, phone call or text message that asks you for your personal or financial information, including asking you to send money or cryptocurrencies?to prepay taxes on an award, avoid a service interruption or receive your?delivery,” Kingsley says.
Many companies and organizations communicate only via certain channels. The IRS, for example, sends mail notices, so you’ll never get a call or email from it. In addition, many banks communicate only via secure message centers.
[6 Scams That Target Your Bank Account]
If you’re ever in doubt about a communication from a company, contact it using a phone number or email address on their official online site and ask if someone is seeking information or payment.
You can also help stop scammers and prevent more people from becoming victims by immediately reporting any fraud attempts to the Federal Trade Commission.
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This Is What Fraud Costs Consumers originally appeared on usnews.com
