Consumers Lost Billions to Fraud from January to September 2023

Featured

Written by:

In the first nine months of 2023, consumers reported losing $7.0 billion to fraud — on pace to be the highest since the Federal Trade Commission (FTC) started publishing related data in 2019.

The FTC tracks fraud reports across various categories, from imposter scams to investment-related fraud to vacation and time-share scams. The latest LendingTree study offers a deep dive into fraud and related losses in the first nine months of 2023 (the latest data available) and in years past.

Among other conclusions, we found the percentage of victims who lose massive amounts (more than $10,000) in such schemes has risen significantly over the past five years.

  • Consumers filed 1.8 million fraud reports in the first nine months of 2023, citing losses of $7.0 billion. In 2022 (the latest year with full-year data available), consumers filed 2.6 million fraud reports, citing losses of $9.0 billion. Those losses were the highest since the FTC first published data in 2019.
  • Imposter scams accounted for 33.5% of fraud reports in the first nine months of 2023, though they weren’t responsible for the highest amount of losses. Investment-related fraud accounted for $3.2 billion of the losses in the first nine months of the year, even if it represented only 4.2% of fraud reports over the same period. Imposter scams, meanwhile, accounted for $2.0 billion of the losses.
  • In the first three quarters of 2023, fraudsters primarily targeted their victims through email, phone calls and text messages. Although social media scams were the fifth most commonly reported contact method, they caused victims to lose $1.0 billion — the highest amount by contact method.
  • 1 in 7 consumers (14.2%) who reported fraud in the first nine months of 2023 experienced a financial loss of more than $10,000. This has grown yearly since 2020, when only 5.0% of the reported losses exceeded $10,000. In the first nine months of 2023, the majority of the reported losses (61.5%) were $1,000 or less.
  • Per-capita fraud losses in the first three quarters of 2023 were highest in Nevada ($25.58), California ($24.73) and Arizona ($24.00). Per-capita fraud losses were lowest in Louisiana ($7.50), Maine ($7.67) and Kentucky ($8.01). Imposter scams were the most common type of fraud in every state.
  • New Hampshire saw the biggest increase in money lost to fraud (55.2%) between the first three quarters of 2022 and the same period in 2023. Indiana (41.8%) and Arizona (35.2%) followed. On the other hand, the District of Columbia recorded the highest decrease (41.3%), ahead of Wyoming (34.7%) and Maine (31.8%).

How the FTC tracks fraud reports

The Federal Trade Commission receives and tracks fraud reports through its Consumer Sentinel Network, which collates information from consumers and local, state and federal law enforcement agencies. The Better Business Bureau (BBB), nonprofits and almost two dozen state governments also contribute to this data.

Fraud is certainly not new, but our findings suggest it’s rising. From January through September 2023 — the latest data available from the year — consumers lost $7.0 billion to fraud across 1.8 million reports. These figures suggest the year’s fraud-related losses could eclipse 2022’s $9.0 billion (across 2.6 million reports) once the FTC tabulates full-year data.

“For fraudsters, it’s a golden age,” says Matt Schulz, LendingTree chief credit analyst. “Very little about our lives isn’t digitized and accessible online. That means most of our important private data, including bank information, is more vulnerable than ever in a lot of ways.”

To his point, many of the reported fraud cases occurred via the internet. During the studied months of 2023, scams were most frequently carried out by email (266,919 instances out of 1.8 million reports), phone call (226,405 instances) or text message (175,497 instances). Other common methods included websites, apps and social media networks.

Fraud reports and losses, 2019 to 2023

Year Total losses Median losses Average amount lost per report # of fraud reports # of reports with losses % of reports with losses
2019 $2.5 billion $388 $1,291 1,897,188 479,247 25.3%
2020 $3.5 billion $300 $1,418 2,461,100 808,711 32.9%
2021 $6.1 billion $500 $2,022 3,033,165 722,774 23.8%
2022 $9.0 billion $650 $3,508 2,563,959 624,512 24.4%
2023* $7.0 billion $502 $3,902 1,805,533 482,795 26.7%

Source: Federal Trade Commission (FTC) Consumer Sentinel Network. Note: *2023 data covers the first three quarters of the year — January through September — while the data for 2019 through 2022 covers the full year.

Fraud-related losses are also increasing: 2022’s total loss of $9.0 billion was up 267.1% from 2019, when the FTC first made this data public. Further, median losses from fraud increased from $388 in 2019 to $650 in 2022.

Consumers in their 30s report the most fraud, but those in their 60s report the biggest losses

When imagining fraud victims — particularly those targeted by email and online scams — many may call to mind older Americans who may not have the technological fluency of millennials and Gen Zers.

So it may be surprising to learn the most common age bracket to fall victim to such scams in 2023 was those 30 to 39, who filed 152,946 fraud reports. However, Schulz says, this finding might not warrant such surprise.

“Younger Americans are so completely online today that the amount of information coming at them is like drinking from a fire hose,” he says. “It’s so hard to be diligent about every little thing when raising a family, taking the kids to soccer practice and knocking 500 things off your to-do list. Constant overwhelm may make young people more vulnerable to scammers.”

The runner-up age bracket, though, was 60 to 69, which is more in line with scam stereotypes. Further, the latter age bracket’s total losses were the highest of any age range studied: $744.2 million, compared with the 30-to-39 set’s $626.4 million.

Fraud reports and losses by age, first 9 months of 2023

Age range Total losses Average amount lost per report # of fraud reports Top fraud subcategory by the number of reports
19 and younger $43.2 million $1,985 21,790 Not available
20 to 29 $335.0 million $2,796 119,819 Business imposters
30 to 39 $626.4 million $4,096 152,946 Business imposters
40 to 49 $653.0 million $4,998 130,643 Business imposters
50 to 59 $657.9 million $5,189 126,785 Business imposters
60 to 69 $744.2 million $5,008 148,593 Business imposters
70 to 79 $523.3 million $4,894 106,938 Business imposters
80 and older $175.9 million $5,108 34,440 Business imposters

Source: FTC Consumer Sentinel Network. Notes: 2023 data covers the first three quarters of the year — January through September. This table only includes fraud reports in which consumers provided their age. The data didn’t show a top fraud subcategory for consumers 19 and younger.

Another age bracket — those in their 50s — suffered the largest average loss per fraud report at $5,189. Those 80 and older were the runners-up, losing $5,108 per claim, despite consumers filing only 34,440 claims (the second-lowest after those 19 and younger). The 60-to-69 bracket came in third at $5,008. Business imposters were the most common type of fraud reported across all age groups 20 and older.

Fraudsters go about their tricky business in many ways, but imposter scams were the most commonly reported type in the first nine months of 2023. There were 605,428 imposter scam reports during that time — more than the combined total of the next five categories.

You can break down imposter scams into various subcategories. Business imposter scams, where fraudsters pretend to be trusted businesses that victims might already know and patronize, were the most common subtype in the first three quarters of 2023. Other schemes include family and friend imposters, government imposters, tech support imposters and even romantic imposters targeting lonely hearts.

These scams are often convincing enough to delude even the savviest and most skeptical. “Scammers are pretty darn good at what they do,” Schulz says. “Their texts, emails, phone calls and videos are often made with the same tools legitimate companies use.”

Top 10 fraud categories in first 9 months of 2023

Category Total losses Median losses # of fraud reports % of reports with losses % of total reports
Imposter scams $2.0 billion $828 605,428 21.0% 33.5%
Online shopping and negative reviews $307.7 million $134 265,701 50.8% 14.7%
Prizes, sweepstakes and lotteries $210.9 million $800 89,264 14.2% 4.9%
Business and job opportunities $337.8 million $2,050 77,612 30.7% 4.3%
Investment-related $3.2 billion $7,000 75,755 74.6% 4.2%
Telephone and mobile services $18.1 million $200 69,550 9.5% 3.9%
Internet services $24.3 million $237 69,201 6.1% 3.8%
Health care $9.7 million $291 52,514 5.3% 2.9%
Travel, vacations and time-share plans $78.2 million $1,167 39,527 19.8% 2.2%
Foreign money offers and fake check scams $124.6 million $1,920 27,644 34.1% 1.5%

Source: FTC Consumer Sentinel Network. Notes: 2023 data covers the first three quarters of the year — January through September. The order is based on the number of fraud reports.

Even though imposter scams were the most common, they weren’t necessarily the most painful for victims — at least financially speaking. (Being the target of, say, a romantic imposter scam could hurt on various levels.)

While consumers lost $2.0 billion to imposter scams in the first nine months of 2023, they lost a whopping $3.2 billion to investment-related scams — or a median of $7,000 per instance. That’s likely because investors are willing to put up larger sums of money for the opportunity to earn even more of it — though those ambitions never came to fruition for these unlucky victims.

Along with their various scam schemes, fraudsters have access to a wide range of communication channels to enact their crimes. And again, for the first nine months of 2023, there’s a discrepancy between the most common method and the one that caused the most financial damage.

Email-based scams were the most common from January through September 2023, with 266,919 instances reported, and phone-call-based scams came in second at 226,405. But even though they came in fifth by number of reported instances, social media scams led to the largest losses during the studied time frame: $1.0 billion total, with a median of $350 per instance.

This data seems part of a larger trend: Social media has seen a 463.3% surge in reported fraud cases from 2019 to 2022. During the same period, the amount of money lost due to social media fraud increased by 90.8%.

Social media use as a whole has continued to increase in recent years. Facebook’s parent company, Meta, reported 1.66 billion daily active users in December 2019 and 2.09 billion in September 2023. Additionally, TikTok began its viral rise in the U.S. around 2019, opening up yet another channel for scammers.

Social media, Schulz says, “leaves people extremely susceptible to fraud because they might feel they know the person on the other side already.” The implicit level of trust we have for our “friends” on social media can make it easier to fall for a scammer’s trick, along with the massive amount of time so many spend on these platforms.

Scams based on text messages or websites/apps also increased substantially over those four years (by 141.2% and 164.2%, respectively), along with their related losses (up 79.7% for text and 77.5% for websites and apps).

Fraud reports and losses by contact method, first 9 months of 2023

Contact method Total losses Median losses # of fraud reports
Email $309.9 million $568 266,919
Phone call $637.9 million $1,454 226,405
Text $283.6 million $1,000 175,497
Website or app $650.3 million $241 141,820
Social media $1.0 billion $350 131,247
Other $1.0 billion $671 118,669
Online ad or pop-up $165.9 million $180 32,130
Mail $56.4 million $688 29,165

Source: FTC Consumer Sentinel Network. Notes: 2023 data covers the first three quarters of the year — January through September. “Other” includes TV or radio, print, fax, in person and other methods consumers write in or that can’t be otherwise categorized. The order is based on the number of fraud reports.

Perhaps unsurprisingly, the most common payment methods by which fraudulent transactions took place — during the studied 2023 period — were credit cards and debit cards (83,395 and 60,546 reports, respectively). Once fraudsters have their hands on card information, it’s easy for them to run multiple transactions — so it’s always worth thinking twice before providing it.

While the vast majority of scams result in relatively small losses — $1,000 or less per instance — a surprising number of consumers lose significant amounts. From January through September 2023, 68,339 reported fraud cases resulted in a loss greater than $10,000, or 14.2% of total instances. (Losses of $1,000 or less were the most common category, accounting for 61.5% of reported cases, or 296,940 instances within the studied 2023 period.)

This also appears to be part of an overall trend that runs toward costlier fraud cases. Between 2019 and 2022, cases resulting in more than $10,000 in damages increased by 125.4%. Over the same period, scams resulting in $1,000 or less in damages decreased by 13.0%.

Percentage of fraud reports with losses

Amount 2019 2020 2021 2022 2023*
More than $10,000 6.3% 5.0% 9.4% 13.9% 14.2%
$9,001 to $10,000 0.8% 0.7% 1.1% 1.4% 1.3%
$8,001 to $9,000 0.5% 0.5% 0.6% 0.7% 0.7%
$7,001 to $8,000 0.7% 0.6% 0.9% 1.0% 0.9%
$6,001 to $7,000 0.8% 0.7% 1.0% 1.1% 1.0%
$5,001 to $6,000 1.0% 0.9% 1.4% 1.5% 1.3%
$4,001 to $5,000 1.9% 1.7% 2.3% 2.7% 2.5%
$3,001 to $4,000 2.4% 2.3% 2.8% 3.2% 2.7%
$2,001 to $3,000 4.6% 4.6% 5.0% 5.2% 4.6%
$1,001 to $2,000 10.3% 11.8% 10.6% 10.5% 9.1%
$1 to $1,000 70.7% 71.3% 64.9% 58.8% 61.5%

Source: FTC Consumer Sentinel Network. Notes: Totals may not equal 100% due to rounding. *2023 data covers the first three quarters of the year — January through September — while the data for 2019 through 2022 covers the full year.

While it’s difficult to ascertain specific reasons for this trend, the prevalence of higher-impact investment scams and the increase in fraudulent activity may factor in. As fraudsters develop more convincing ways to separate victims from their money, they’re better armed to achieve their aims — and take more money from vulnerable consumers.

When it comes to per-capita fraud losses, not all of the U.S. is created equally. In the first nine months of 2023, Nevada, California and Arizona residents saw the highest per-capita losses due to scams at $25.58, $24.73 and $24.00, respectively.

Residents in the state that suffered the highest overall fraud-related losses — California — lost a total of $973.3 million to scams in the first three quarters of 2023.

At the other end of the spectrum, Louisiana can celebrate suffering the lowest per-capita fraud losses during the studied 2023 period: $7.50, or just 25 cents more than the value of an hour of minimum-wage work in the state. Runners-up were Maine, whose residents lost $7.67 per capita to fraudulent activity, and Kentucky, whose residents lost $8.01.

In every state, imposter scams were the most common type.

States with the highest/lowest per-capita fraud losses, first 9 months of 2023

Rank State Total losses Per-capita losses Average amount lost per report # of fraud reports Reports per 100,000 residents
1 Nevada $79.4 million $25.58 $1,925 41,265 1,329
2 California $973.3 million $24.73 $2,981 326,476 830
3 Arizona $172.1 million $24.00 $2,561 67,218 937
4 Washington $179.9 million $23.40 $3,122 57,637 750
5 Florida $451.8 million $20.88 $1,567 288,263 1,332
6 Hawaii $30.2 million $20.79 $3,322 9,078 626
7 Colorado $114.5 million $19.85 $2,468 46,410 804
8 Maryland $120.0 million $19.48 $1,722 69,724 1,132
9 Virginia $158.7 million $18.40 $2,008 79,025 916
10 New Jersey $170.0 million $18.38 $1,987 85,559 925
11 Utah $55.6 million $16.94 $2,808 19,808 603
12 Alaska $12.4 million $16.91 $2,553 4,867 662
13 South Carolina $80.5 million $15.66 $1,561 51,603 1,003
14 Idaho $28.6 million $15.40 $2,653 10,764 581
15 Texas $445.7 million $15.24 $1,581 281,878 964
16 Georgia $156.5 million $14.60 $1,023 152,956 1,427
17 Minnesota $82.0 million $14.39 $2,386 34,350 603
18 New Hampshire $19.7 million $14.29 $2,055 9,595 695
19 Oregon $60.3 million $14.25 $1,923 31,348 741
20 North Dakota $10.9 million $14.01 $3,081 3,531 455
21 Delaware $13.7 million $13.77 $1,094 12,513 1,259
21 New York $275.3 million $13.77 $1,617 170,299 852
23 Massachusetts $94.8 million $13.57 $1,933 49,044 702
24 Illinois $171.4 million $13.43 $1,433 119,573 937
25 North Carolina $140.0 million $13.37 $1,407 99,499 950
26 Connecticut $47.9 million $13.26 $1,764 27,139 751
27 New Mexico $27.9 million $13.21 $2,023 13,797 653
28 Montana $14.4 million $13.18 $2,330 6,176 566
29 Alabama $64.0 million $12.73 $1,354 47,283 940
30 Rhode Island $13.7 million $12.50 $1,903 7,190 657
31 District of Columbia $8.2 million $12.24 $786 10,447 1,558
32 Pennsylvania $158.2 million $12.18 $1,250 126,576 974
33 Tennessee $82.1 million $11.86 $1,451 56,573 817
34 Michigan $110.4 million $10.98 $1,427 77,367 769
35 Oklahoma $40.3 million $10.14 $1,692 23,784 599
36 Indiana $67.7 million $9.97 $1,439 47,012 693
37 Missouri $60.7 million $9.86 $1,240 48,926 795
38 Wyoming $5.6 million $9.68 $1,682 3,325 575
39 Kansas $28.2 million $9.59 $1,659 16,976 578
40 West Virginia $17.2 million $9.58 $1,694 10,133 565
41 Vermont $6.1 million $9.42 $1,508 4,023 625
42 South Dakota $8.4 million $9.39 $2,149 3,892 437
43 Ohio $105.2 million $8.94 $1,237 85,056 722
44 Arkansas $26.6 million $8.80 $1,301 20,415 676
45 Iowa $27.5 million $8.61 $1,818 15,103 474
46 Nebraska $16.7 million $8.54 $1,489 11,244 574
47 Wisconsin $50.1 million $8.52 $1,396 35,877 610
48 Mississippi $25.0 million $8.45 $1,046 23,894 808
49 Kentucky $36.1 million $8.01 $1,386 26,024 578
50 Maine $10.5 million $7.67 $1,263 8,301 607
51 Louisiana $34.8 million $7.50 $813 42,793 922

Source: FTC Consumer Sentinel Network. Notes: 2023 data covers the first three quarters of the year — January through September. The number of fraud reports includes those marked as “other.”

Determining why certain states suffered more in this way is, again, difficult without speculating. But Schulz notes that many states toward the top of the list tend to have higher incomes than those toward the bottom. The median household income in California, for example, is $91,905 — substantially higher than the national median household income of $75,149. Meanwhile, Louisiana’s households bring in a median of $57,852.

“It’s possible that fraudsters, looking for the biggest potential scores, might focus their efforts more on states where people tend to have the most money,” Schulz suggests.

Just as states differ in per-capita losses, they differ based on total fraud losses over time.

When comparing the first three quarters of 2022 to the first three quarters of 2023, New Hampshire saw the largest percentage increase in fraud-related losses — 55.2%, from 2022’s $12.7 million to 2023’s $19.7 million.

Indiana came in second with a 41.8% increase, while Arizona was third at 35.2%.

States with the biggest increases/decreases in fraud loss

Rank State Total losses, first 9 months of 2022 Total losses, first 9 months of 2023 % change, 2022 to 2023
1 New Hampshire $12.7 million $19.7 million 55.2%
2 Indiana $47.7 million $67.7 million 41.8%
3 Arizona $127.3 million $172.1 million 35.2%
4 South Carolina $60.0 million $80.5 million 34.3%
5 Mississippi $18.7 million $25.0 million 34.0%
6 North Carolina $106.4 million $140.0 million 31.5%
6 Minnesota $62.3 million $82.0 million 31.5%
8 North Dakota $8.4 million $10.9 million 30.0%
9 West Virginia $13.4 million $17.2 million 27.9%
10 Alabama $50.1 million $64.0 million 27.7%
11 Idaho $22.8 million $28.6 million 25.4%
11 Iowa $21.9 million $27.5 million 25.4%
13 Georgia $125.7 million $156.5 million 24.6%
14 Pennsylvania $130.0 million $158.2 million 21.7%
15 Montana $12.0 million $14.4 million 20.2%
16 Utah $46.6 million $55.6 million 19.4%
17 Virginia $133.9 million $158.7 million 18.5%
18 Rhode Island $11.9 million $13.7 million 15.4%
19 Illinois $149.0 million $171.4 million 15.1%
20 Maryland $105.5 million $120.0 million 13.7%
21 Michigan $97.8 million $110.4 million 12.9%
22 Arkansas $23.5 million $26.6 million 12.8%
23 Nevada $71.2 million $79.4 million 11.5%
24 Washington $162.0 million $179.9 million 11.1%
25 Vermont $5.5 million $6.1 million 9.7%
26 Colorado $105.1 million $114.5 million 8.9%
27 Kentucky $34.0 million $36.1 million 6.2%
28 Connecticut $45.2 million $47.9 million 5.9%
29 Florida $429.6 million $451.8 million 5.2%
30 Louisiana $33.3 million $34.8 million 4.5%
31 Texas $430.6 million $445.7 million 3.5%
32 Ohio $102.5 million $105.2 million 2.7%
33 Hawaii $30.2 million $30.2 million 0.0%
34 Alaska $12.7 million $12.4 million -2.0%
35 Oklahoma $41.4 million $40.3 million -2.7%
36 Missouri $63.3 million $60.7 million -4.2%
37 South Dakota $8.8 million $8.4 million -4.8%
38 Tennessee $87.4 million $82.1 million -6.0%
39 New Jersey $181.5 million $170.0 million -6.3%
40 Nebraska $18.1 million $16.7 million -7.7%
41 New York $300.0 million $275.3 million -8.2%
42 New Mexico $30.5 million $27.9 million -8.4%
43 California $1.1 billion $973.3 million -8.5%
44 Kansas $31.0 million $28.2 million -09.2%
45 Oregon $67.4 million $60.3 million -10.5%
46 Delaware $15.5 million $13.7 million -11.9%
47 Massachusetts $110.7 million $94.8 million -14.4%
48 Wisconsin $69.7 million $50.1 million -28.1%
49 Maine $15.4 million $10.5 million -31.8%
50 Wyoming $8.6 million $5.6 million -34.7%
51 District of Columbia $14.0 million $8.2 million -41.3%

Source: FTC Consumer Sentinel Network. Notes: 2022 and 2023 data covers the first three quarters of the year — January through September. The number of fraud reports includes those marked as “other.”

Meanwhile, other states enjoyed drops in fraud losses across the studied period. The District of Columbia led the way with a 41.3% decrease from $14.0 million in 2022 to $8.2 million in 2023, while Wyoming and Maine saw drops of 34.7% and 31.8%, respectively.

Yet again, specific reasons for these trends are elusive. That said, D.C. came in first for average Google search interest value for “fraud” from January through September 2023. That suggests its residents might have armed themselves with enough information to successfully decrease their vulnerability to scams.

While it’s impossible to render yourself immune to fraud, there are steps to take to increase your security and awareness — and hopefully keep your hard-earned money in your pocket where it belongs.

  • Get a password manager. With such a large chunk of our lives conducted online, having strong — and distinct — passwords is nonoptional. “So many people use the same two or three passwords,” Schulz says, “so when a bad guy gets one or more of them, they’ve basically got the keys to the kingdom.” Password managers can help you set a new, secure password for every login — and easily keep track of them.
  • Trust your gut. It may sound hokey, but it’s true: Our instincts can help us stay safe if we pay attention when something smells fishy. If you get a call or email that sounds legitimate, but something’s just … off, trust your instinct and hang up or delete it. You can always reach out to your bank or that business directly.
  • Check your online statements regularly. Staying informed will give you the best chance of stopping fraudulent activity as soon as it starts, which may make it easier to catch the perpetrator — or at least get your money back. “Make it part of your financial routine that you check your bank and credit card statements at least once a week to make sure nothing looks suspicious,” Schulz says. Some banks automatically alert you of suspicious activity if you sign up for a relevant service.
  • Do sweat the small stuff. If you see a charge you don’t recognize, call your bank immediately — even if it seems like no big deal. “Sometimes fraudsters will make a small charge — like a candy bar at a gas station — to make sure the fraudulently obtained card information is valid,” Schulz warns. “Once they’ve seen that it is, they’re likely to set their aims higher next time. Even small amounts matter.”

LendingTree researchers analyzed Federal Trade Commission (FTC) Consumer Sentinel Network data on fraud from Jan. 1, 2019, through Sept. 30, 2023 — the latest available at the time of our research.

Our analysis focused on various aspects of fraud, such as:

  • The total losses incurred
  • The age of the person reporting the fraud
  • The contact methods used by fraudsters
  • The top 10 fraud categories

Researchers used the U.S. Census Bureau 2022 American Community Survey with five-year estimates to determine per-capita losses for each state.

Source

This article originally appeared on LendingTree and was syndicated by MediaFeed.

More from MediaFeed:

Like MediaFeed’s content? Be sure to follow us.

AlertMe

This article originally appeared on LendingTree and was syndicated by MediaFeed.

Like MediaFeed's content? Be sure to follow us.