Why Americans Keep Losing Billions to Scams Every Year

Scammers are siphoning a record amount of dollars from Americans!—this is what fraud reports from recent years are telling us. While the number of reported incidents has remained pretty much the same year-on-year, more people are losing money as a direct result of fraud (38%, to be precise, according to the Federal Trade Commission).

But, the consequences of falling for a swindle aren’t just limited to a dent in your wallet. You also run the risk of identity theft, which could expose you to many other fraudulent threats in the future.

Based on the latest data, the total financial setback resulting from scams in America was $12.5 billion in 2024. This is just the immediate monetary losses that are easier to quantify. In reality, you can expect a much larger impact in financial terms in the long run, both directly and indirectly, if you ever become prey to a scammer.

Why Americans Lose Much Money to Scams

Inarguably, we have better resources today than ever before to protect the average citizen from fraudsters and other criminals. Yet, why do so many people continue to fall victim and lose billions of dollars along the way?

Usually because of the following reasons:

Lack of Knowledge and Awareness

It’s no secret that a majority of boomers aren’t so great at finding their way around technology. As a consequence, they’re at a higher risk of encountering frauds like tech support schemes, romance scams, and email-based swindles.

Sometimes, a lack of life experiences can also make people vulnerable. This explains why younger cohorts (despite being tech-savvy) lose more money to fraud than their older counterparts.

Interestingly, awareness can falter because of busy and complex lifestyles, too, giving greater room for bad actors to intervene and manipulate.

Rise of Artificial Intelligence and Other Technologies

Technologies like AI have made it easier and cheaper to launch scams from anywhere in the world. They’ve also created ways to add legitimacy — an important factor for making fraudulent schemes work.

Take imposter scams, for example. Using modern tech, scammers can nowadays impersonate a legitimate business by spoofing websites, posting fake reviews, or mimicking phone numbers and emails.

But keep in mind that technology isn’t all bad. It can help you evade scams, too, when used correctly.

Complex Tactics That Rely on Human Emotions 

No matter how much our civilization has progressed, the basic human emotions remain the same. So, scammers continue to exploit them using numerous tactics.

This is why hoax charities manipulate people’s generosity during natural disasters and grandparent schemes misuse the love and compassion of elderly relatives. Or consider IRS imposters who induce fear using pressure and threats, fake lotteries that take advantage of human greed, and investment scams that bank on your fear of losing out.

What Types of Scams Are Prevalent in the U.S.?

In 2024, emails were again the number one vehicle for targeting Americans for fraud. (No surprise there, considering how many emails go out each day and their staggering low cost).

Phone calls, text messages, and social media are other common mediums that exposed consumers to deceptive schemes during the year.

Now, if you pay close attention, you might notice that certain frauds pop up more often than others on the news. These are the ones you’re more likely to encounter on a regular basis.

The top scams that rob Americans of their hard-earned money include,

Imposters

Criminals can impersonate familiar people and entities (like the IRS and banks) to win trust and avoid suspicion.

Online Shopping Fraud

This could include exaggerating a product’s benefits, overcharging for inferior items, and stealing customer payment information. 

Fake Business & Job Opportunities

Fraudsters typically commit these crimes to access identity-related data or to find targets for financial fraud.

Investment Scams

Fake investment schemes can involve overseas projects, real estate opportunities, or cryptocurrency investments pegged to produce super gains.

Web Services Fraud

Misleading practices that capture personal data or rope you into paid online services may come under this category.

Hoax Sweepstakes & Lotteries

In these scams, fraudsters make money by phishing for sensitive information or getting victims to transfer funds (in the guise of processing fees and taxes).

Here’s How You Can Ward Off Fraudulent Attempts 

According to a Bankrate survey, nearly half of those scammed believe that they could get duped again in the near future. This may seem a tad pessimistic. But getting scammed can leave you with deep-rooted scars emotionally. So, it’s natural to expect the worst and feel anxious during daily interactions.

However, worrying isn’t going to resolve anything. If you want to evade deceptive traps, you must take proactive measures to protect yourself.

Here’s what you can do to fend off fraudulent attempts.

• Take your time when making decisions without feeling pressured to respond quickly.
• Get into the habit of verifying information. For example, search online, read reviews, and ask around.
• Authenticate communications by reverse searching phone numbers and email addresses. You can also reach out to the respective person or organization using their regular contact details if you have them.
• Never disclose your identity-related data to anyone unless there’s a good enough reason. This applies to your SSN, bank account details, tax ID, insurance policy numbers, healthcare information, passwords, and other sensitive data.
• Be wary of anyone who suggests unusual ways to transfer funds, like gift cards, crypto, and cash payments. These are usually impossible to trace once the transaction is complete.
• Stay clear of too-good-to-be-real deals, no matter how tempting.
• Ignore unsolicited emails and messages, especially those with unverified links and attachments. These could download malware that phishes for confidential information. 
• Protect digital data using strong passwords. Also, enable two-factor authentication for extra account and device security.
• Use a virus scanner to detect shady websites and emails.
• Set up a VPN to shield your online activities.
• Install a caller ID app to identify and block spam and scam calls and messages.
• When you need to download an app (say, a shopping or payment app), go through online reviews and find one on a reputable app store.
• Minimize your digital footprint by, for example, screening what you share on social media and deleting accounts you no longer use.
• Regularly go through bank accounts, credit card statements, and credit reports for transactions you don’t recognize.

Key Takeaways

Over the years, law enforcement officials and regulators have done much to protect consumers. But fraudulent schemes don’t appear to end or subside. In fact, they’ve shown an uptick, according to the latest reports.

The true scope of a scam is hard to gauge in most instances. If you consider just the direct financial impact, the cumulative losses amount to billions of dollars each year.

If you’re serious about fraud prevention, you must start by building your knowledge and awareness. Adopt a healthy dose of skepticism, too. For instance, pay attention to and question any inconsistencies or disparities and independently verify information before you rush to trust someone. Don’t forget to keep your personal data safe and make use of tech tools to ward off fraudulent attempts.

FAQ

How much are the annual reported losses from scams in the United States?

In 2024, Americans incurred a total loss of $12.5 billion due to fraud. This is a $2.5 billion or 25% jump from the previous year. Based on incident reports, the average loss per victim was $19,372. And scams initiated by phone calls resulted in the highest financial impact per person.

What age groups are more effected by fraud?

According to FTC data, 44% of those belonging to the 20-29 age group reported losing money because of scams in 2024, whereas this percentage was only 24% in the 70-79 year category. However, elderly citizens suffered far greater financial setbacks than the younger cohorts.

What are the most prevalent frauds in America?

In terms of the number of incidents per year, impersonations topped the chart with 846,000 reports. This was followed by online shopping scams, which amounted to 383,000 incidents. However, investment fraud caused the biggest losses — a total of $5.7 billion (up $1 billion from the previous year).

Is there a way to identify scams?

Most fraudsters create a sense of urgency, whether to get you to sign up for a subscription or settle an alleged overdue tax. They can press you to act quickly by using pressure tactics like giving a limited timeframe to respond. Requests for excessive personal information and unusual payment methods are other signs to watch. Grammatical errors are also pretty common. They’re especially a major dead giveaway when interacting with legitimate organizations, such as banks, government agencies, or service providers.

How should scam victims report an incident?

Anyone who falls for a fraudulent scheme should report it to the FTC and request their local law enforcement agency for an investigation. They must also contact the FBI’s IC3 for complaints related to online scams. Notifying financial institutions, like banks and issuers of credit and debit cards, and any other company related to the incident is also important.

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