2022 Set a Record $8.8 Billion Lost to Scams
From Birch Gold Group
According to the latest information from the Federal Trade Commission (FTC), Americans lost an eye-watering $8.8 billion to financial scams in 2022. The agency recently released a comprehensive 91-page report analyzing financial fraud from a variety of angles.
Today, we’ll dig into the Consumer Sentinel Network 2022 report to discover what the criminals’ latest tricks are, and the best ways we can protect ourselves from financial crime.
2022 financial scams by the numbers
30%: increase in dollars lost to scams compared to 2021
$650: the median amount lost to a financial scam
2.4 million: the total number of fraud reports
$1,674: the median financial loss of victims aged 80+
22%: more than 1 in 5 scams started with a text message
80+: Americans aged 80 and over fell for financial scams at the lowest rate, but those who were scammed lost nearly three times more than the typical loss
#1: Georgia, with 1.55% of its population reporting financial scams, had the highest per-capita rate of fraud reported
The changing patterns of financial scams
As Attorney General Merrick Garland told AARP:
Unfortunately, crime is innovative and constantly changing. This is a problem for us and a problem for everyone.
Criminals go where the money is – and the money is in investment scams. Americans lost a staggering $3.8 billion ($7,144 median loss) to investment scams.
Warning signs of investment scams:
- A “once-in-a-lifetime opportunity”
- Phrases like “10,000% growth,” “triple your money,” “incredible gains,” “breakout stock pick” or “huge upside and almost no risk!” (The U.S. Securities and Exchange Commission (SEC) says such claims are a red flag for fraud.)
- Guaranteed profits – in investing, remember, there’s no such thing as a free lunch
- Converting funds into another currency, especially cryptocurrency
- “Offshore” investment – once your money is in another country, the SEC warns us, it’s vastly more difficult to monitor and recover it
Identity theft, in all its various forms, is the most common type of fraud. What makes identity theft pernicious is that victims’ money isn’t all that’s at risk. Identity fraud can destroy your credit score and ruin relationships with financial institutions.
Identity theft can begin in a number of ways. Scammers may pose as:
- A romantic interest
- A government agency (often the IRS or the Social Security Administration)
- A relative experiencing an emergency (“Your grandchild is in prison and needs to be bailed out right now”)
- A well-known and reputable business (especially banks and brokerages)
- A technical support expert
- A debt collector
- A representative of a regional utilities company
With such an array of different cons, how can we protect ourselves from financial scams?
Attorney General Garland has this advice:
…prevention is the very first thing. You’re dealing with experts here, and the best solution when dealing with a potential scam attempt is to slow it down. Nobody should be calling you out of the blue and asking you for your Social Security number. Nobody should be calling you out of the blue and asking you for your checking account number. Nobody should be calling you out of the blue and asking for your email address.
Why “slow it down,” exactly?
…before you ever give out your personal information, pause. The fraud perpetrator is going to try to rush you through – “You’ve got to do it right now or something will happen to your grandchild …” – but it doesn’t work that way. The IRS is not calling you on the phone and telling you that if you don’t send money, if you don’t go to Target to buy a gift card, we will foreclose on your house.
Pressure like Garland describes can be a strong indicator that something’s not right. As he says, the scammer is going to try to rush you through the steps he wants you to take.
It’s always appropriate to ask clarifying questions, like:
- Explain to me how you got my contact information.
- Help me understand why you need my information.
- Who exactly do you work for? (Usually, you’ll receive general answers like “the IRS” or “Social Security” rather than specific answers, like “the IRS criminal investigation division” or “the Social Security department of veterans’ benefits.”)
Generally, financial scammers operate with a very thin story – these aren’t professional actors. They have a script. If you ask questions that take them off-script, they’re liable to lose the thread of the story, contradict themselves and even hang up on you.
After all, financial fraud is a numbers game. Forcing the scammer to slow down and answer your questions is costing them money.
Garland wants to remind us:
These people are experts, sophisticated criminals. They hit thousands of potential victims, and they just move on from one victim to the next until they find an opening… They are experts at the psychology of the con, and the way to get back at that con is to report it as soon as possible. And the way to prevent it in the first place is to slow it down.
Probably the most important thing we can do to protect ourselves from even the most sophisticated financial scams is just to ask lots of questions.
Knowing what to look out for is key to defending against most scams. To help you detect and avoid financial scams, Birch Gold Group has pulled together an extensive resource guide that is now available on our website. The Birch Gold Group Scam Protection Resource Guide helps you identify warning signs and provides you with tips on how to avoid fraud.2023, Featured, ftc, scam watch