Exploring the Top Scams of 2022
05/05/2023 | 26m 46s | Video has closed captioning.
What were the hottest frauds in 2022? How much did American consumers lose from scams?
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05/05/2023 | 26m 46s | Video has closed captioning.
What were the hottest frauds in 2022? How much did American consumers lose from scams?
Problems Playing Video? | Closed Captioning
(film reel clattering) - Welcome to today's Ethnic Media Services Zoom news briefing, [background music] co-hosted today by the Federal Trade Commission the country's leading federal agency charged with protecting and enforcing consumer rights.
I'm Sandy Close, EMS executive director and your moderator for today.
Today is one of my favorite annual briefings, when we get to hear from the FTC about the hottest scams of 2022, and the ones that cost us the most in hard-earned money that literally went down the drain.
And, also, I have to say the FTC has been a great partner with Ethnic Media Services and all our ethnic media colleagues since 2015.
So, welcoming the FTC to this Zoom briefing to report on their annual data book findings is both a great pleasure and a real honor.
[music fades] So, what were the hottest frauds in 2022 according to the FTC's latest annual data book?
How much did American consumers lose from scams?
And, when I say "consumers," I also include small businesses.
What role did social media play?
The numbers are intriguing and surprising, especially the dramatic increases in money lost, new scams targeting investments and businesses, the losses reported through bank transfers and cryptocurrency payments, and the enduring power of the telephone and the more recent power of social media to conduct fraud.
We start with Maria Mayo, who will lead us off.
Thank you, Ms. Mayo.
We're looking forward to hearing your report.
- Thank you.
Thank you for having me.
I'm excited to be a part of this event.
And, today, I like to talk about some of the interesting highlights in the 2022 data.
So, first, we saw a decrease in the number of fraud reports received compared to 2021.
In 2022, we received 2.4 million fraud reports compared to 2.9 fraud reports received the year before.
So, that's about a 500,000 decrease in the number of fraud reports that we received.
But, in spite of that decrease the dollar loss reported was staggering.
Consumers reported that they lost more than $8.8 billion to fraudsters, the most ever reported.
And, you're probably wondering what were the frauds that consumers lost the most money to?
What contributed to this huge monetary loss?
There were two main fraud categories where consumers reported losing the most money: investment scams, and imposter scams.
And, I'll start with investment scams because consumers reported losing money to investment scams more than any other type of scam.
And, the amount lost in 2022 more than doubled what was lost in 2021.
Consumers reported losing $3.8 billion in investment scams, most of which were lost to cryptocurrency scams.
And, the average median loss per consumer was $5,000.
These scams often started on social media where consumers were enticed to invest in cryptocurrency in an attempt to make money.
Consumers invested, and the scammers were so savvy that they often presented websites that actually showed how the consumer's money had grown, but it was all fake.
And, that's just one example of an investment scam.
Imposter scams accounted for the next largest dollar loss with consumers reporting losses of $2.6 billion.
But, I do wanna unpack that a little bit because under the umbrella of imposter fraud, there are several subcategories.
Imposter fraud is when someone pretends to be a well-known business which we refer to as a "business imposter" scam.
It could be someone pretending to be a government agency, which we refer to as a "government imposter" scam.
It could be someone pretending to be a romantic interest and we refer to those as "romance scams".
Or, it could even be someone pretending to be a friend or a family relative.
All of this in an attempt to get money or personal information.
Losses to business imposters soared in 2022 compared to 2021.
Consumers reported losing $660 million to business imposters compared to $450 million the year before.
Romance scams where someone is pretending to be a love interest was another driver for the huge dollar loss as it relates to imposter scams.
Consumers reported losing $496 million to romance scams with an individual median loss of $2,000.
And, even though reports regarding government imposters were actually down in 2022, the median loss per consumer actually increased.
So, in 2022, the average consumer lost $1,500 to a government imposter compared to those who lost $1,100 in 2021.
So, those two areas combined accounted for more than 70%, or $6.4 billion of the total dollar loss reported of $8.8 billion.
Those are the reports based on the dollar amounts lost, but what types of frauds were reported the most?
I'll mention the top five frauds.
Once again, imposter scams top the list as the most reported fraud type.
We received more than 725,000 imposter-- reports about imposter scams, and more than half of those reports were about business imposter scams.
And, in most of the reports regarding business imposter scams, consumers indicated that the scammer was pretending to be Amazon.
Second on the fraud list was online shopping.
We started to see an increase with this type of fraud during the height of the COVID pandemic, and it continues to be one of the top reported scams with consumers often reporting about not receiving merchandise that they ordered.
2022 data shows us that most of these scams actually started on social media.
Third on the list are scams related to prizes, sweepstakes, and lotteries.
And, these are scams when consumers often receive a call from someone claiming that they won a huge sum of money usually in a sweepstakes but they have to pay a fee in order to get that money.
And, consumers who reported that particular scam indicated that totally they lost more than $301 million to those scammers.
Fourth on the list is invested-related scams.
And, I talked about how consumers lost money to this scam more than any other, but the number of reports regarding this scam increased, as well.
So, last year it was number seven on the list with more than 80,000 reports but this year it moved up to the fourth slot with the most reported scam of more than a hundred thousand reports.
And, rounding off the top five are business and job opportunity scams.
We've been taking a closer look at job opportunity scams most and recently, especially because once a consumer realizes that it is indeed a scam, they're really concerned about the amount of personal data that they have disclosed when applying for this so-called job.
We also collect data on how scammers contact consumers.
Phone calls has historically been the number one way that scammers reach out to consumers but it actually decreased in 2022.
But, in spite of that, on an individual level, consumers reported a median loss of $1,400 compared to $1,200 the year before.
Social media was a contact method that had the highest aggregated dollar loss with $1.2 billion.
So, if a fraud was instigated through a social media platform that is where consumers lost the most money.
And, the top five categories where consumers got involved in a scam through social media were online shopping, investments and business imposters.
A question is, can you say again what was the fourth most popular scam?
- The fourth?
- The fourth.
One of our reporters missed what the fourth was.
The fourth most popular scam was investment scams.
[audio fades] - Right.
Sorry, I didn't mean to interrupt.
- No worries.
In 2022, one out of every four persons who reported a fraud also reported losing money.
And, we tracked trends on how consumers are paying scammers.
Bank transfers or payments accounted for the highest dollar losses among payment methods with more than $1.5 billion in losses reported.
And, the top fraud categories for that payment method was online shopping followed by business imposters.
Cryptocurrency was the second highest payment method with more than $1.4 billion in losses reported.
What's also interesting is the impact of fraud on different age groups.
So, the data tells us that younger people, specifically those in the 30 to 39 age range reported losing money more often than older adults.
And, they lost more money more frequently to online shopping scams and investment scams.
And, they were usually contacted by those scammers through social media and they most often pay the scammer using credit cards.
But, when older adults did report, and by "older" adults, I mean those 80 or older, they lost money more than anyone else.
Usually about $1,600 was the median loss.
And, older adults usually lost money to business imposter scams and tech support scams.
And, those scams were usually initiated through phone calls.
So, those are the highlights for the 2022 data in our Sentinel Data Book.
Fraud reports are down, but people lost a lot of money to scammers to the tune of $8.8 billion with most of the money being lost in investment and imposter scams.
Social media is increasingly being used to lure consumers into frauds, and consumers are paying scammers most frequently using bank payments or cryptocurrency.
- [Sandy] Araceli, do you wanna ask a question about Mexican women who are getting constantly besieged with romance scams?
- [Araceli] This is a problem that I see almost every day in this group that I am.
Different men that approach students with romantic interests.
They ask for help to find out if this man is for real.
So, and many Latino women don't want to talk about this because this is, like, very shameful.
So, my question for you is, what can we do in order to protect that when and they are going to steal our money and they are going to broke our heart?
- Things that we advise consumers regarding romance scams is if you are approached on social media, a lot of times they won't show their real face They'll show a picture, and you can do-- we suggest that consumers do a reverse image check to see if that's actually the person.
The other thing that we say, they use a lot of stories to lure you to give up your money and they give excuses as to why they can't meet you in person.
And, these are all red flags that they're not interested in really having a romantic adventure with you.
They're just interested in getting your money.
And, some of the stories that they tell you is that maybe they're on an oil rig, or they're in the military, or a family member is sick and they need money.
But, they never-- they always have an excuse why they can't meet you in person.
And so, these are red flags that perhaps this person is not for real and you probably do not want to get involved in a relationship, an online relationship with them.
- [Sandy] So, but that raises a possible kind of FAQ-type column that Araceli might consider running.
Here are the questions you could ask back that might pose some clues to the authenticity of the person seeking to develop a relationship.
If there were a list of questions that might expose, like-?
Because the romance scams are just so pervasive.
Are there any kind of, like, columns or guides that we could send Araceli on how to advise?
Like, here are questions you can ask.
Or, is that just too particular to the individual?
I think it's really important to-- especially if you hear somebody telling you about their love interest online, to give-- to tell them, give them information about asking them questions.
How is it that you-?
How are you-?
Why are you giving them money to someone that you just met?
Maybe asking them some questions I think would be helpful.
Sometimes when people are in a relationship, it's difficult for them to identify it, but if they mention something to you, I would say that you could ask.
You know, you could help them by asking questions, trying to identify if their relationship is real and if it's something else.
- [Sandy] Right.
There's a question from Donatella about whether we could provide the figures that you gave, Maria, so that our reporters can make sure they're accurately recording the figures.
I'm just wondering if we could put something into the chat that just summarize some of those figures.
- Yeah, I think someone did.
- I did!
I think I put the blog-- I put the blog, that consumer blog, that synthesizes what Maria was talking about, and it has a really helpful image at the bottom that summarizes everything.
And, you could use that image as well.
We'll put it again if you need it.
- That's terrific.
And, I wanna thank everyone for sharing so many of your observations and posting so many questions.
Really helpful to flesh out people's lived experience with this topic.
But, it does seem, even though the number of reported frauds went down, the losses went up dramatically as you made the point, Maria.
Where do you see yourselves making headway against scams?
And, that is also a question for us as journalists.
How can you-- how can our reporting best support your efforts to prevent and actually catch, but prevent, mainly, scams?
So, where do you feel you're most successful?
And, how can ethnic media help you the most?
Is it through maybe once a week telling a scam story?
Or, is it-?
We'd love your advice and having access to the multilingual, the new multilingual website is also a great asset.
So let's start with you, Maria.
- I think education.
Educating consumers on what to look for with scams.
And, I think my colleagues said-- (ahem) Excuse me!
My colleagues in the Division of Consumer and Business Education do a great job with that with their blog posts, with their educational materials, events like these, with reporters and getting information out.
One of the things that if consumers-- if you're getting text or calls from scammers, more than likely someone that you know is receiving the same type of text and scams.
And, talking about that and talking it over and making people aware of what you're experiencing and in sharing that experience I think is a good way in helping to prevent some of these scams and frauds that are happening.
And, also encouraging people as Rosario mentioned, looking at some of the payment methods that scammers are asking folks to pay them with: gift cards, cryptocurrency; just to be cautious of that.
And, that also comes in education and DCB is doing a great job at getting the word out regarding that.
Now our next speaker is Cristina Miranda who will talk about the FTC's new multilingual platform on scams to help break through 12 different language barriers.
Thank you for joining us.
- Hi, everyone.
Thank you, Sandy.
I'm very happy to announce ftc.gov/languages.
It's our new website for fraud and scam advice in 12 languages.
This came about because we know that fraud affects every community and that scammers are running their scam in the languages that people speak at home.
And, that's why the FTC now has information in these dozen languages to help people spot and avoid these scams.
So, at ftc.gov/languages, which I put in the chat, you will find information in Amharic, Arabic, Chinese- which is both simplified and traditional- French, Hmong, Korean, Russian, Somali, Tagalog, Vietnamese, and Ukrainian.
At ftc.gov/languages, you'll see information on how to spot and avoid a scam, what to do if you paid a scammer, and ways to recover.
And, also, what people can know if you're newly arrived in the United States.
Because we know that scammers can target people that are new to the US systems and culture.
So, we have a downloadable publication called "Spotting, Avoiding and Reporting Scams: A Fraud Handbook for Recent Refugees and Immigrants."
This information is, again, available in each language and it helps people learn to spot some of the scams related to looking for a job, going through the immigration process, or just trying to figure out how things work in this country.
There are also graphics in each language at the bottom of each page to share on social media, to help people in various communities know how to spot, avoid and also report fraud.
So, we're asking for your help.
Please help us spread the word about ftc.gov/languages.
We encourage all of you to link or use the free materials that you can find at ftc.gov/languages to help people start these conversations, and also to help more people report the fraud and scams that they see in their communities at reportfraud.ftc.gov Thank you.
- Julia Dudley, do you wanna ask your question?
- I was concerned-- Hi!
Julia Dudley Najieb, Black Headline News and also ONME News.
My question relates to social media platforms.
How are they also responsible?
Or, is there any way for that they can also be responsible for what's happening and being able to track these scams?
'Cause this is so common.
I keep seeing one of my elderly persons who keeps getting these scams in her Messenger app, as an example, and she forwards them to us and is getting into these scams.
So, that's why I ask, "what are social media platforms "doing to also be responsible for helping to weed these out?"
I can't say what social media platforms are doing but what we can do is educate consumers on what to look out for when they're on social media and they are presented with these type of scams.
What are the red flags to look for?
What are the things that they should avoid?
So, while I can't say how our social media platforms or why/how they should be accountable, what we can do and what we focus on doing is educating the consumer and what to look out for.
Renée Barbe, the question of whether scams are increasing.
I think Maria mentioned that they declined but the actual losses incurred have gone up dramatically.
So, you might wanna check out the information on the chat about those numbers.
Before we end, I wanna ask Cristina, who is the kind of consumer you most hope will access the multilingual website, and for what kind of information?
- That's a really great question.
But before I jump into that, I just wanna remind everyone that they can sign up for ftc.gov/consumeralerts to receive all of our latest alerts that we have every single week out there to keep on top of the various frauds and scams that are happening in the communities.
What we're also hoping for with the ftc.gov/languages site [background music] is that we're really trying to reach deeper into all these communities because we know that it-- there are scams happening in multiple languages in all these various communities.
So, the site is set up not just for the people that speak these languages but also the advocates.
The media, as well, to help us try to get the word out.
That there is information out there that is downloadable, that is shareable to help people avoid and spot scams, and know what to do about it.
And, also, like what Rosario mentioned, report the fraud to us!
We really, really wanna hear from these individual various communities about the fraud and scams that they're actually seeing.
Whether that be with the help of someone who speaks English or not.
We really would love to get those reports in at from reportfraud.ftc.gov So, I hope that that's helpful.
- Very helpful.
Thank you all three of you.
Thank you for this session.
Conference is now adjourned.