Fraudsters and Scammers and Thieves, Oh My!
Big Oil’s big year in 2022 came as no surprise to anyone who filled their tank the last 12 months. Meanwhile, another global industry saw a 30% increase in reported revenue compared with 2021. But nobody is ringing any bells about it.
According to the Federal Trade Commission, consumer reported losing just under $9 billion to fraud, with more than $3.8 billion alone from investment scams – double the amount reported in 2021.
Imposter scams came in second, accounting for $2.6 billion in reported consumer losses, an increase of $200 million compared with the previous year.
All told, the top 5 fraudulent schemes and scams reported to the FTC involved imposters, online shopping, prizes and sweepstakes, investments and fake business and job opportunities.
Some of the increase in fraud came from scammers contacting potential victims by phone or social media. Consumers reported $1.2 billion in losses from fraudsters using social media.
It shouldn’t be that surprising. Schemes, scams and fraudulent deals are so common the FTC has an active database to receive reports of fraud from consumers, along with reports from federal, state and local law enforcement agencies. Reports from the Better Business Bureau, industry groups and non-profits are also included in the database.
In 2022, more than 5.1 million reports were filed with the FTC’s Consumer Sentinel Network, the formal name of the database. More than a million of those reports were for identity theft alone.
While consumers are understandably upset about falling victim to fraud, business owners should be just as concerned.
When consumers get scammed out of their hard-earned money – especially in a digital transaction – that can cause them to reconsider spending across the board. Those chinks in the armor of consumer confidence only makes it harder for legitimate merchants to make a living.
Fraud isn’t limited to consumers. Business can be targets of scams – from fake vendors collecting on bogus invoices to fraudulent business deals to identity theft.
Unfortunately, opportunities for frauds and scams are only going to grow. With new technologies and an ever-expanding digital marketplace, we can be sure bad actors will take every advantage they can against an unwitting public.
While the $8.8 billion in losses consumers reported to the FTC last year wouldn’t move the Gross Domestic Product needle all that much, it’s possible had some of that money gone to real businesses in real communities those businesses would have grown and created more local jobs. And that would definitely have helped the confidence of some consumers.
Civic boosters and community leaders rightly encourage residents to keep their money – and the sales tax dollars – at home. A thriving local economy is the foundation of a community’s quality of life. It also helps to make sure they are shopping legitimate as well as local.