Banks Extend Loans to Customers Without Credit Scores

Fraud Cost US Consumers $5.8 Billion Dollars Last Year

The Ugly Numbers

The Federal Trade Commission reports that American consumers lost $5.8 billion to fraud last year. This represents a 70% increase from loss in 2020. Last year marked the highest number of fraud complaints filed since 2001, with 2.8 million reports filed with the FTC. On average, people lost $500 per scam.

As shocking as those numbers may be, they don’t even include every category of fraud. For example, debt collectors sometimes misrepresent the amount owed on a loan, which can be considered fraud. All told, 2.9 million US consumers filed complaints tied into identity theft and “other” categories.

COVID-19 Played a Role

Officials say the pandemic helped fraudsters scam people out of money last year. One such crime involved selling people things like fake hand sanitizer and face masks. In other cases con artists stole people’s data in order to file unemployment claims and sign up for government benefits.

The FTC notes that imposter scams were the most common in 2021, which some analysts have connected to loneliness and isolation throughout the pandemic. In these schemes, criminals pretend to be a loved one in distress, or form fake romances through social media apps. The average victim had $1,000 stolen by way of imposter scams last year.

How Consumers Can Fight Back

It pays to be informed when it comes to these financial crimes and knowing what to watch out for. Phishing emails or texts looking for private information, stolen social security numbers, romance scams, and phony investments are all common schemes.

There are ways to defend against fraud. It’s important to routinely check your bank account and investments to spot potentially suspicious activity. Don’t give out personal or financial information during an inbound telephone call. A good rule of thumb is to never send someone money unless you know them personally. Scammers are on the rise and taking advantage of the digital landscape, but thankfully consumers aren’t powerless.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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