FTC Reports $12.5 Billion Lost to Scams in 2022: How Social Media, AI, and Crypto Exacerbated the Crisis
Scams involving car extended warranties are on the rise, impacting millions. In fact, a report from the U.S. Federal Trade Commission (FTC) reveals that approximately 2.6 million individuals fell victim to various fraud schemes in 2024, leading to staggering losses of $12.5 billion. This figure marks a significant increase from the $2.5 billion lost in 2023, despite the similar volume of reported incidents.
The Growing Threat of Online Scams
The FTC’s findings indicate that social media is a primary channel for these scams, although specific platforms responsible for the highest number of reports are not disclosed. Victims often experience financial loss through impostor scams, where fraudsters impersonate individuals such as:
- Romantic interests
- Family members in distress
- Government officials
- Technical support representatives
Extreme Cases of Fraud
Some scams can escalate to extreme levels. For example, a woman in France was deceived out of $800,000 by an individual posing as actor Brad Pitt. Many scams create a sense of urgency, catching even the most cautious individuals off guard.
Charlotte Cowles, a financial columnist for The Cut, shared her experience of being scammed out of $50,000, which she handed over to a stranger in a shoebox. Her viral essay highlighted how criminals can engineer crises that lead victims to relinquish their savings.
Demographics of Scam Victims
Interestingly, the demographic of scam victims may be surprising. While older adults are often viewed as the most vulnerable to online scams, the FTC reports that individuals aged 20-29 actually reported losing money more frequently than those over 70. However, when seniors do fall victim to scams, they often incur greater losses.
Types of Scams on the Rise
While some scams have been prevalent for years, others are rapidly increasing in frequency. Notably, job and business opportunity scams ranked as the third most common type of fraud in 2024, with reports nearly tripling since 2020. In 2020, these scams resulted in losses of $90 million, but that number skyrocketed to $501 million last year.
Methods of Payment and Future Risks
The most common method for scammers to receive funds is through traditional bank transfers, accounting for about $2 billion in losses. Cryptocurrency payments follow closely, resulting in losses of around $1.4 billion.
Scammers utilize various communication methods to reach potential victims, including:
- Social media
- Phone calls
- Text messages
With the advent of AI deepfake technology, the potential for more sophisticated scams is increasing. Fraudsters may soon be able to mimic the voices of loved ones, leading to more targeted and convincing attacks. Therefore, it’s wise to verify any alarming news directly with loved ones before taking any action.
For more information on how to protect yourself from scams, consider visiting the FTC’s Consumer Information page.
