Fraud continues to be a prominent issue impacting consumers, businesses and financial institutions. According to the Federal Trade Commission, consumers reported losing $10 billion to scams in 2023. That’s $1 billion more than 2022 and the highest ever reported in losses. The report also states that one in four people reported losing money to scams, with a median loss of $500 per person.
Scammers can easily make texts, phone calls and emails appear legitimate in hopes of tricking the person into providing sensitive information such as usernames, passwords and financial information. It’s always a good idea to be aware of the most common types of scams and how to spot them. When in doubt, take a moment to research so you don’t fall victim to fraud.
Here are some tips to help avoid the most common scams reported to the FTC.
Imposter scams. These scams were once again the top fraud reported, accounting for $2.7 billion in losses. Imposter scams include people pretending to be your bank’s fraud department, the government, a business or even a relative.
- How to Spot Them: These imposters have a number of ways to contact you, including unsolicited emails, texts and phone calls. These scams typically warn of a serious problem or an issue that requires immediate attention, such as a potential unauthorized transaction or a credit card that has been locked.
- How to Avoid Them: Don’t click on any links. If you’re unsure, contact the business or agency that is allegedly responsible for contacting you.
Investment scams. Losses to investment scams soared to $4.6 billion, averaging $7,000 per loss. These scams claim you’ll make lots of money quickly and easily by investing in new money-making opportunities, including cryptocurrency. Most people never get back the money they invested.
- How to Spot Them: According to the FTC, these scammers get your attention through infomercials, social media and online ads often encouraging people to attend free events and seminars, order free materials or watch free videos to learn the secret to success. They promise big, guaranteed returns with little effort and give few details about the investment.
- How to Avoid Them: Resist pressure to commit quickly and take time to research investment programs. Never put money into an investment only on what you see online. Scammers can easily invent stories and testimonials. In the end, know that investments always involve a risk.
Social media scams. The FTC reported that scams starting on social media accounted for $1.4 billion in losses. One of the most frequently reported fraud losses was from people who tried to buy something marketed on social media. Most of these reports are about undelivered goods.
- How to Spot Them: According to reports, these scams most often start with an ad on a social media platform. You may not recognize the name or products but see that prices are very low. Some warning signs might include having limited information about delivery and other policies, including dispute resolution, returns and contact information.
- How to Avoid Them: If you’re not familiar with the company, do your research online. The FTC encourages shoppers to search online for the company name plus “scam” or “complaint.”
Job scams. Among the top 10 frauds reported, business and job opportunities scams accounted for an average individual loss of $2,137. With the rise in work-from-home employment roles, there has been an uptick in job scams. The goal of these fraudsters is to get personally identifiable information (PII) and financial information under the disguise of pre-employment paperwork.
- How to Spot Them: These jobs will be advertised in the same way real ones are – on social media platforms and legitimate job sites. Many times these jobs involve you paying them money for things such as certifications, listings or job placement. Never pay for a job. Honest companies and job placement services never charge the candidate.
- How to Avoid Them: If a job posting or offer feels like it could be a scam, talk to a friend who can use a fresh set of eyes to spot fraud. Most importantly, research and vet a possible employer. If you get a paper check for your services, always wait until it clears .
If someone suspects they are a victim of fraud, they can report suspicious activities to the Federal Trade Commission at ReportFraud.ftc.gov, as well as their local financial institution.