Rosalind Evans
In 2023, consumers faced a record-breaking surge in fraud, losing a staggering $10 billion, with imposter scams leading as the most prevalent form of deception, according to the Federal Trade Commission (FTC). This alarming trend underscores the urgent need for awareness and protective measures against these sophisticated scams.
The FTC’s report revealed that nearly 854,000 people filed complaints about imposter scams in 2023, accounting for 33% of all consumer fraud reports. These scams, which resulted in an average loss of $800 per victim, hinge on criminals impersonating trustworthy individuals to extract money or valuable information. From posing as a romantic interest, government official, or technical support expert, these fraudsters utilize various channels, including email, phone calls, and social media, to trap their victims.
John Breyault, Vice President of Public Policy, Telecommunications, and Fraud at the National Consumers League, highlighted the role of the internet in exacerbating this issue: “These scams have been around forever, really, but the internet has supercharged them,” he remarked. The sophistication of these scams is also attributed to emerging technologies like artificial intelligence and voice cloning.
Notably, older adults are disproportionately impacted, with those aged 80 and above suffering a median loss of $1,450, significantly higher than younger victims. The FBI emphasized the seriousness of these scams, particularly the “phantom hacker” type of tech-support fraud, which often leads seniors to lose their entire life savings.
These scams’ emotional and psychological toll is profound, as Breyault points out: “This is money people have worked for a lifetime to build up…For many victims, they don’t have time to recover: They’re older people or people of limited means.” Moreover, cryptocurrency emerged as the payment method with the highest fraud losses in 2023, followed by bank transfers and payments.
Hardeep Rai, Product Director at Feedzai, a fraud detection service, stresses the importance of vigilance: “You get [hold of] a bunch of phone numbers and call,” he said, describing the ease with which criminals can execute these scams. However, Rai and Breyault emphasize the power of skepticism and verification in combating these scams. Breyault advises against responding to unsolicited messages and recommends contacting official numbers for verification. “It pays to be skeptical,” he asserts.
The rise in imposter scams in 2023 is a stark reminder of the evolving landscape of fraud. As these scams become more sophisticated and prevalent, consumers must proactively verify unsolicited communications and resist the pressure of urgent requests. By staying informed and cautious, individuals can better protect themselves and their assets from these increasingly cunning fraudsters.
