It's no secret that fraudsters have been having a field day throughout the pandemic, conning Americans out of billions of dollars. But it’s not just older folks who are being scammed — new data shows that young people are increasingly susceptible to the evolving tactics of swindlers.
“In 2021, 5.7 million people filed reports and described losing more than $5.8 billion to fraud — a $2.4 billion jump in losses in one year,” Bridget Small, a consumer education specialist at the FTC, wrote in an email alert to consumers.
In other words, the amount of money Americans lost to scammers in 2021 increased 70% from the year prior, with a median loss of $500 per person. In 2020, Americans reported a loss of more than $3.4 billion: another historically high number.
The three most popular types of fraud reported to the FTC last year were imposter scams; online shopping fraud; and fake sweepstakes, lotteries and prizes. Imposter scams — when someone pretends to be a trusted business or acquaintance, then asks for money — accounted for more than $2.3 billion in losses alone. Imposter scams were also the biggest scam in terms of the amount of money stolen.
Perhaps the most effective scam of 2021 was investment-related fraud. This category includes day trading scams, phony investment opportunities and bogus investment advice seminars. Though the FTC received only about 79,000 investment scam complaints last year, 73% of the people filing said they lost money. Investment fraud totaled $1.6 billion in 2021, with a median loss of $3,000 per person.
Where money fraud and scams are the worst
In terms of the sheer number of reported scams, the top five states were California, Texas, Florida, New York and Pennsylvania. This isn't necessarily surprising, as they are the states with the largest population sizes.
To give a better sense of the states being targeted by scammers, the FTC also broke down each state by scams per capita.
The five states with the most scam reports per capita were:
- Georgia: 1,421 complaints per 100,000 residents, accounting for a loss of $113 million
- Maryland: 1,415 complaints per 100,000 residents, accounting for a loss of $94 million
- Delaware: 1,410 complaints per 100,000 residents, accounting for a loss of $14.1 million
- Nevada: 1,407 complaints per 100,000 residents, accounting for a loss of $69 million
- Florida: 1,370 complaints per 100,000 residents, accounting for a loss of $331 million
In terms of net losses, California tops the list. Residents there reported that they were scammed out of $820.9 million in 2021.
Who's getting scammed out of their money
Conventional wisdom might suggest that older folks are more susceptible to scams, and in previous years, FTC data bears that out. But since 2017, and especially during the pandemic, that dynamic has started to shift. Increasingly, younger people are reporting scams, and they’re starting to lose way more money than other age groups.
Here’s a look at which age groups reported losing the most money in 2021:
- 30 to 39 years old: $598 million in losses
- 60 to 69 years old: $521 million in losses
- 40 to 49 years old: $495 million in losses
- 50 to 59 years old: $484 million in losses
- 70 to 79 years old: $364 million in losses
- 20 to 29 years old: $363 million in losses
- 80 and older: $149 million in losses
- 19 and younger: $51 million in losses
In terms of how the scammers get the money, the data shows that crypto is becoming the payment du jour. Overall, in 2021, crypto payments accounted for $750 million of all reported fraud, second only to bank payments, which totaled $756 million. In the fourth quarter of 2021, however, crypto was the top payment method by far, at $294 million.
All are indicators that fraudsters are increasingly targeting younger folks — and with more sophisticated methods.