According to a recent study, customers in the United States lost up to USD 8.8 billion to scams in 2022, an increase of more than 30% from 2021.
Consumers reported losing more money to investment scams than any other category in 2022, totalling more than USD 3.8 billion, according to the US Federal Trade Commission (FTC).
That sum more than doubles the reported loss for 2021.
The FTC survey also revealed that impostor frauds, which increased from USD 2.4 billion in 2021 to USD 2.6 billion, were responsible for the second-highest loss.
The top five fraud categories included possibilities for business and employment, prizes, lotteries, investment-related fraud, and investment-related scams.
According to the research, nearly 2.4 million consumers reported fraudulent activity on their accounts in 2022, the most frequent of which were impostor scams and online retail fraud.
In a report earlier in February 2023, the FTC claimed that romance scammers made a tidy profit last year from 70,000 victims who lost USD 1.3 billion.
According to the survey, those looking for love are frequently victims of romance scammers who use dating applications.
Around 19% of those who lost money to a romance scam in 2022 said the contact began on a website or app, while nearly 40% said it started on social media.
Numerous others reported that the con artist rapidly switched the chat to Telegram, WhatsApp, or Google Talk.
Micheal Bruemmer, the Vice-President of Experian Data Breach Resolution and Consumer Protection, told CNBC that for 2023, these will be the following scams one should be careful against:
Charitable donations scam
These scams range from one-man operations to complex schemes run by registered non-profits (NGOs). Users donating to these funds end up seeing their money landing in the fraudsters’ laps. Charity scams can take the form of phishing, apart from using social engineering and approaching the potential victim over the phone/ meeting in person.
Here, the criminal meets the potential victim on a dating/social media app and tries to get into a relationship with the person quickly. Not only are these criminals good at appearing caring, sincere and downright perfect, but they also have the expertise in setting up fake dating plans.
Instead of turning up in person for the date night, these scammers will ask the victims to provide money for ‘unexpected’ medical bills/other emergencies. The victims will be instructed to wire money or put it on a gift card. The criminals will also keep on asking their prey for money and the only way to stop this is by not sending cash anymore.
Romance scam victims often find themselves in debt/legal trouble and develop serious trust issues.
Fitness & Weight Loss Scams
Scammers are taking advantage of people’s desire to shed a few pounds as well.
These criminals target the ‘health enthusiasts’ by putting up a fake website, which is given a legitimate shape, promoting ‘fitness programs’. Also, the victims may be approached to sign up for a low-priced gym membership/different fitness product, promising “you can get 100 pounds off in three weeks and look like new because of the program… for which you have to provide your personal details and credit card,” Bruemmer said.
Car Warranty Scams
“I have a software app on my phone that blocks calls,” Bruemmer shares. “I got seven calls for extended car warranty [last week] because they try to leave a voicemail.”
The prevention of car warranty scams lies in ignoring such calls. Entertaining any such call will end up with the victims providing personal/financial information. In the worst case, the fraudster might try to sell his/her prey a fake extended auto warranty, defrauding the victims financially.
Generally, the calls accompany a pre-recorded message about car warranties.
Gift Card Scams
According to a 2022 survey, some 26% of US consumers received a gift card with no funds on it. A prime example is a gift card scam.
Scammers attempt to drain out a gift card’s balance before anyone uses it. They can even take cards off the store rack, tamper with the protective strips and steal the bar codes.
The fraudsters buy similar security tape and replace the protective strips to make the cards look untouched. Then they enter the card’s code into a program that tracks the retailer’s website and informs the scammer when someone buys the card so they can spend the money on it or cash it. By the time the card reaches its recipient, it’s a worthless piece of plastic.
Fraudsters also advertise gift card exchange websites that offer to check the victims’ gift card balance. If You put your gift card information on the portal, the scammer then uses those details to drain the card’s balance.