Consumer Fraud Loss Tops $10 Billion, Aided by Digital Tools, FTC Says

Consumers lost a record $10 billion to fraud in 2023, with digital tools making it easier for scammers to find targets.

That total is 14% higher than the amount of fraud losses reported during the previous year, the Federal Trade Commission (FTC) said Friday (Feb. 9) press release.

About 2.6 million consumers reported fraud to the FTC in 2023, a total that was nearly the same as in 2022, according to the release. Twenty-seven percent of these consumers reported a loss, according to an infographic provided by the FTC.

“Digital tools are making it easier than ever to target hardworking Americans, and we see the effects of that in the data we’re releasing today,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the release. “The FTC is working hard to take action against those scams.”

The form of fraud that accounted for the greatest share of the losses in 2023 was investment scams, per the release. Consumers reported losing $4.6 billion to investment scams that year, an amount 21% higher than that reported in 2022.

Imposter scams accounted for the second largest share of fraud losses, at $2.7 billion, the release said.

“These scams include people pretending to be your bank’s fraud department, the government, a relative in distress, a well-known business or a technical support expert,” Larissa Bungo, senior attorney at the FTC, wrote in an article posted Friday on the FTC’s website.

In terms of the scams that were reported most frequently, imposter scams were most common, followed by online shopping issues; prizes, sweepstakes and lotteries; investment-related reports; and business and job opportunity scams, according to the press release.

Email became the most common method that scammers used to reach consumers in 2023, followed by phone calls and text messages, the release said.

A year earlier, text messages were the most common contact method, and for decades before that, phone calls held the top spot, per the release.

Credit cards were the payment method most frequently used in reported fraud cases in 2023, but bank transfers and payments and cryptocurrency accounted for the highest aggregate losses, according to the FTC’s Consumer Sentinel Network Data Book 2023 released Friday.

PYMNTS Intelligence has found that financial institutions (FIs) are embracing a range of technology solutions to address fraud and financial crime.

For example, 70% of FIs use both artificial intelligence (AI) and machine learning (ML) in their efforts to combat fraud, according to “Financial Institutions Revamping Technologies to Fight Financial Crimes,” a PYMNTS Intelligence and Hawk:AI collaboration.