Consumers hammered by fraud losses

The Federal Trade Commission reported that consumers lost $12.5 billion to fraud in 2024, representing a 25 percent increase over 2023 losses. But some experts say losses were even higher.

“What the FTC is reporting is probably only a fraction of what really happened,” Glenn Fratangelo, head of strategy and marketing for fraud and authentication management at Nice Actimize, said during a webinar the company hosted last week.

The reason, Fratangelo theorized, is that a large number of victims don’t report being defrauded.

The FTC said the increase it reported was not driven by an increase in actual fraud reports, which it said “remained stable.” Rather, the percentage of people who reported losing money to a fraud or scam increased by double digits. In 2023, 27 percent of people who reported a fraud said they had lost money; in 2024 that figure jumped to 38 percent.

Fraud surges in multiple categories

Consumers reported losing more money to investment scams – $5.7 billion – than any other category last year. That represents a 24 percent increase over 2023.

Imposter schemes were the second most common type of scam, generating $2.95 billion in reported losses. In 2024 consumers reported losing more money to scams where they paid with bank transfers or cryptocurrencies than all other payment methods combine.

The data shows “scammers’ tactics are constantly evolving,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “The FTC is monitoring those trends closely and working hard to protect the American people from fraud.”

In all, 2.6 million consumers made fraud reports to the FTC last year. The most common frauds involved online shopping experiences. This was followed by business and job opportunities, where reported losses totaled $750.6 million, an increase of nearly $250 million over 2023.

Showing major growth in recent years within business and job opportunities, is the “subcategory and employment agency scams.” The number of these reports tripled from 2020 to 2024, and the amount of money consumers reported losing to these scams jumped by more than fivefold, from $90 million to $501 million.

For the second consecutive year, email was the most common way scammers used to reach their prey. Crooks are getting better at crafting emails – the scam emails that were reported through Nice Actimize (which typically result in suspicious activity reports, or SARs) are getting “savvier,” Fratangelo said

Phone calls were the second most commonly reported contact method for fraudsters, the FTC reported, followed by text messages.

6.5 million reports filed

The FTC’s Consumer Sentinel Network database takes reports directly from consumers, as well as from federal state and local law enforcement agencies, the Better Business Bureau, industry members and nonprofit organizations. More than 20 states contribute data to Sentinel.

Sentinel received 6.5 million reports in 2024. These included the types of fraud described above, as well as identity theft reports and complaints related to other consumer issues, such as problems with credit bureaus, banks and lenders. The FTC said it received more than 1.1 million reports of identity theft in 2024 through its website IdentityTheft.gov.

The FTC uses many of the reports received through the Sentinel network as a starting point for law enforcement investigations, and the agency also shares these reports with federal, state and local law enforcement professionals.

The FTC said consumers received a total of $319 million in refunds during Fiscal Year 2024. Here’s a breakdown:

• $261.9 million in refunds came directly from the FTC
• 1.6 million consumers cashed FTC refund checks
• $2.2 million was sent to the U.S. Treasury
• $17.0 million was used to cover administrative costs

Check fraud climbs

In a related development, SARs filings surged 51.8 percent between 2020 and 2024, according to Nice Actimize. “Fraud has become a lot easier to do with artificial intelligence,” Fratangelo said. The top two categories of SARs: wire/EFT and check fraud. “Fifty percent of SARs are related to payments,” he added.

Reported losses to check frauds totaled $24 billion in 2024. That’s because so many businesses – upwards of 84 percent are still issuing checks, Fratangelo said.

In 2024 there were over 660,000 SARs related to check fraud, said Ted Sausen, subject matter expert at Nice Actimize. Sixty percent of check fraud incidents in 2024 – 500 million – involved counterfeit or forged checks, Fratangelo noted.

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