$3.8 billion in investment scams and $2.6 billion in impersonator scams topped the list. Most money lost through bank transfers and crypto currencies
by Peter White
Ethinic Media Services
Mar 16, 2023 – Ever get an email about an extended car warranty or a free gift from Home Depot? What about online service to flush out malware from your computer? It’s hard to avoid these unsolicited offers. Fraudsters send texts, they call you on your phone, and sometimes use AI to mimic a relative’s voice who says they have an emergency and please send money.
The Federal Trade Commission (FTC) says what you don’t know can be expensive. They received 2.4 million complaints last year compared to 2.9 million in 2021 but the total amount lost in 2022 was $2.6 billion more than in 2021.
“The dollar loss reported was staggering. Consumers reported that they lost more than $8.8 billion to fraudsters, the most ever reported,” say Maria Mayo, Associate Director for the Division of Consumer Response and Operations in the Bureau of Consumer Protection at the Federal Trade Commission (FTC).
The FTC maintains a database of consumer fraud reports. Report a scam here.
“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 a dozen languages to help people spot and avoid these scams,” says
Cristina Miranda, Consumer Education Specialist with the FTC’s Education Bureau of Consumer Protection.
Scammers targeting ethnic communities
During an March 10 Ethnic Media Services briefing Miranda briefed reporters about how to protect against fraudsters. She said that recent refugees and immigrants are frequent marks for scammers who use their native language to steal their money.
“We have a downloadable publication called Spotting, Avoiding and Reporting Scams: a Fraud Handbook. 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,” she said.
“Scammers are targeting ethnic communities and they speak your language. They target ethnic communities in unique ways,” says Rosario Mendez, an attorney with FTC’s Division of Consumer and Business Education Bureau of Consumer Protection.
The Latino community filed a higher percentage of reports relating to problems with banks and lenders, related to debt collection, auto issues, and also business opportunities.
“And we’ve had several cases related to bogus business opportunities, bogus work at home, specifically targeting Latinos. We know from our data analysis and from also our casework that business opportunity, moneymaking schemes, are also something that is impacting the Latino community.
In terms of the black community, the largest number of reports were about payday loan applications, and also student debt relief programs,” Mendez said.
An October 2021 FTC report, Serving Communities of Color, detailed the extent of fraud affecting ethnic communities and the FTC’s efforts to combat it.
Scams vary widely
Mayo said a lot of people fell prey to get-rich-quick schemes last year and the average median loss per consumer was $5,000.
“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 crypto currency scams.
These scams often started on social media where consumers were enticed to invest in crypto currency 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,” Mayo said.
Con artists have not given up on romance scams, a staple in the field of fraud. These scams are aimed at older Americans who lost $139 million in 2020 up from $84 million in 2019. For the most part, scammers operate with impunity and many of them are based overseas. That makes it hard for them to be prosecuted. But sometimes they get caught.
One case involved an 87-year-old Holocaust survivor who was swindled out of his life savings by a Florida woman, Peaches Stergo. She was arrested January 25, 2023.
The FTC stopped a large-scale fraud of students enrolled at the University of Phoenix (UOP) and made them pay. The FTC is sending nearly $50 million in payments to more than 147,000 UOP students who may have been lured by allegedly deceptive advertisements.
The 2019 settlement also required UOP and its parent company, Apollo Education Group, to cancel $141 in student debt.
The FTC alleged UOP falsely touted its relationships and job opportunities with companies such as AT&T, Yahoo!, Microsoft, Twitter, and the American Red Cross. The FTC also alleged that UOP’s advertising gave the false impression that the online school worked with those companies to create job opportunities for its students and tailor its curriculum for such jobs.
Consumers can get email alerts from the FTC regarding the latest imposter, real estate, and investment scams. Sign up here.
