Newly released Federal Trade Commission (FTC) data reveals that consumers reported losing over $10 billion to fraud in 2023, marking the first time fraud losses have reached this staggering benchmark. This represents a 14% increase over reported losses in 2022. Investment scams were the most significant contributor, with losses exceeding $4.6 billion, a 21% increase from the previous year. Imposter scams followed closely, with nearly $2.7 billion in reported losses. Consumers reported losing more money through bank transfers and cryptocurrency than all other methods combined.
“Digital tools are making it easier than ever to target hard-working Americans, and we see the effects of that in the data we’re releasing today,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is working hard to take action against those scams.”
The FTC received fraud reports from 2.6 million consumers last year, nearly the same amount as in 2022. Imposter scams were the most commonly reported, with significant increases in reports of both business and government impersonators. Online shopping issues were the second most commonly reported, followed by prizes, sweepstakes, and lotteries; investment-related reports; and business and job opportunity scams.
For the first time, email was the most commonly reported method scammers used to reach consumers in 2023, displacing text messages, which held the top spot in 2022. Phone calls were the second most commonly reported contact method, followed by text messages.
The FTC is taking a comprehensive approach to detect, halt, and deter consumer fraud. In 2023 alone, the FTC led the largest-ever crackdown on illegal telemarketing, joined by more than 100 federal and state law enforcement partners nationwide. This operation, known as Operation Stop Scam Calls, targeted operations responsible for billions of calls to U.S. consumers.
The FTC is also in the final stages of a rulemaking process targeting business and government impersonation scams. Additionally, the agency has brought multiple cases against investment and business opportunity schemes, including Wealthpress, Blueprint to Wealth, Traffic and Funnels, Automators, and Ganadores.
The FTC is also confronting emerging forms of fraud. For example, the agency announced a challenge in 2023 to promote the development of ideas to protect consumers from the misuse of artificial intelligence-enabled voice cloning for fraud and other harms. The FTC is also stepping up CAN-SPAM enforcement, using its authority under the CAN-SPAM Act to rein in unlawful actions, including cases against Publishers Clearing House and Experian.
The FTC has expanded its ability to hear directly from consumers in multiple languages through the Consumer Sentinel Network. This database receives reports from consumers, federal, state, and local law enforcement agencies, the Better Business Bureau, industry members, and non-profit organizations. More than 20 states contribute data to Sentinel.
Sentinel received 5.4 million reports in 2023, including fraud reports, identity theft reports, and complaints related to other consumer issues, such as problems with credit bureaus and banks and lenders. In 2023, there were more than 1 million reports of identity theft received through the FTC’s IdentityTheft.gov website.
The FTC uses the reports it receives through the Sentinel network as the starting point for many of its law enforcement investigations. The agency also shares these reports with approximately 2,800 federal, state, local, and international law enforcement professionals. While the FTC does not intervene in individual complaints, Sentinel reports are a vital part of the agency’s law enforcement mission and help the FTC warn consumers and identify fraud trends.
Sophisticated overseas criminals are stealing tens of billions of dollars from Americans every year, a crime wave projected to worsen as the U.S. population ages and technology like AI makes it easier to perpetrate fraud and evade capture. Internet and telephone scams have grown exponentially, overwhelming police and prosecutors who catch and convict relatively few perpetrators. Victims rarely get their money back, including older people who have lost life savings to romance scams, grandparent scams, technical support fraud, and other common grifts.
“We are at a crisis level in fraud in society,” said Kathy Stokes, director of fraud prevention at AARP’s Fraud Watch Network. “So many people have joined the fray because it is pretty easy to be a criminal. They don’t have to follow any rules. And you can make a lot of money, and then there’s very little chance that you’re going to get caught.”
A recent case from Ohio illustrates the law enforcement challenge. An 81-year-old man, William Brock, was targeted by a scammer and allegedly responded with violence, fatally shooting an Uber driver he wrongly assumed was in on a plot to extract $12,000 in supposed bond money for a relative. The scammer who set the tragic chain of events in motion remains on the loose.
Online and telephone rackets have become so commonplace that law enforcement agencies and adult protective services don’t have the resources to keep up. “It’s a little bit like drinking from a fire hose,” said Brady Finta, a former FBI agent who supervised elder fraud investigations. “There’s just so much of it, logistically and reasonably, it’s almost impossible to overcome right now.”
Grifts can be difficult to investigate, particularly those originating overseas, with stolen funds quickly converted into hard-to-track cryptocurrency or siphoned into foreign bank accounts. Some police departments don’t take financial scams as seriously as other crimes, leaving victims discouraged and demoralized.
Federal prosecutors typically don’t get involved unless the fraud reaches a certain dollar amount. The U.S. Justice Department says it does not impose a blanket monetary threshold for federal prosecution of elder financial abuse, but some of the 93 U.S. attorneys’ offices nationwide may set their own thresholds, giving priority to cases with more victims or greater financial impact. Federal prosecutors file hundreds of elder fraud and abuse cases annually.
The FTC says the “vast majority” of frauds go unreported. Often, victims are reluctant to come forward. A 74-year-old woman recently charged with robbing a credit union north of Cincinnati was the victim of an online scam, according to her family. Authorities believe the woman was preyed on by a scammer, yet there is no record she made a formal police report.
“These people are very good at what they do, and they’re very good at deceiving people and prying money out of them,” said Fairview Township, Ohio, police Sgt. Brandon McCroskey, who investigated the robbery. “I’ve seen people almost want to fist fight the police and bank tellers because they … believe in their mind that they need to get this money out.”
Older people hold more wealth as a group and present a ripe target for scammers. The impact can be devastating since many of these victims are past their working years and don’t have much time to recoup losses. Elder fraud complaints to the FBI’s Internet Crime Complaint Center rose by 14% last year, with losses increasing by 11% to $3.4 billion, according to a recent FBI report. Other estimates put the annual loss much higher. A 2023 AARP study calculated that Americans over 60 lose $28.3 billion each year to fraud. The FTC, seeking to account for unreported losses, estimated fraudsters stole a staggering $137 billion in 2022, including $48 billion from older adults.
In San Diego, 80-year-old William Bortz said criminals stole his family’s nest egg of almost $700,000 in an elaborate scheme involving a nonexistent Amazon order, a fake “refund processing center” in Hong Kong, doctored bank statements, and an instruction that Bortz needed to “synchronize bank accounts” to get his money back. Bortz’s scammer was relentless and persuasive, harassing him with dozens of phone calls and, at one point, taking control of his computer.
Even though he was the victim of a crime, Bortz struggles with self-blame. “I understand now why so much elder abuse fraud is never reported. Because when you look back at it, you think, ‘How could I have been so stupid?’” said Bortz, who retired after a career in banking, financial services, and real estate.
His daughter, Ave Williams, said local police and the FBI were diligent in trying to track down the overseas scammer and recover the money but ran into multiple dead ends. The family blames Bortz’s bank, which Williams said ignored multiple red flags and facilitated several large wire transfers by her father over eight days. The bank denied wrongdoing, and the family’s lawsuit against it was dismissed.
“The scammers are getting better,” Williams said. “We need our law enforcement to be given the tools they need, and we need our banks to get better because they are the first line of defense.”
The Justice Department contends the industry needs to do more, saying the U.S. can’t prosecute its way out of the problem. “Private industry — including the tech, retail, banking, fintech, and telecommunications sectors — must make it harder for fraudsters to defraud victims and harder to launder victim proceeds,” the agency said in a statement.
Banking industry officials told a Senate subcommittee in May they are investing heavily in new technologies to stop fraud, “and some hold great promise.” The American Bankers Association says it’s working on a program to coordinate real-time communication among banks to better flag suspicious activity and reduce the flow of stolen funds. But industry officials said the banks cannot singlehandedly prevent fraud. They said the U.S. needs an overarching national strategy to combat scammers, calling the federal government’s current efforts disjointed and uncoordinated.
Law enforcement agencies and industry need to join forces to fight fraud more quickly and efficiently, said Finta, the former FBI agent, who launched a nonprofit called the National Elder Fraud Coordination Center to cultivate better cooperation between law enforcement and major corporations like Walmart, Amazon, and Google.
“There are very, very smart people and very powerful, wealthy companies that want this to stop,” he said. “So we do have the ability, I think, to make a greater impact and to help out our brothers and sisters in law enforcement that are struggling with this tsunami of fraud.”
Source: Federal Trade Commission, AARP, FBI
