US Consumers Lost Over $5.8 Billion to Fraud Last Year: Federal Trade Commission

Federal Trade Commission seal at a news conference at FTC headquarters in Washington on July 24, 2019. (Yuri Gripas/Reuters)

U.S. Consumers lost more than $5.8 billion to fraud in 2021, an increase of more than 70 percent from 2020, the Federal Trade Commission (FTC) stated on Feb. 22.

More than 2.8 million consumers filed fraud reports with the FTC in 2021, an increase of $2.4 billion from 2020, with the most commonly reported complaint involving imposter scams, followed by online shopping scams.

Of the losses reported by consumers in 2021, more than $2.3 billion were because of imposter scams, such as romance scams and people falsely claiming to be the government or a relative in distress, of which $1.2 billion in losses were reported in 2020.

Online shopping accounted for roughly $392 million in reported consumers losses in 2021. In 2020, online shopping accounted for $246 million in losses.

Of the nearly 2.8 million fraud reports, about 25 percent indicated a financial loss, with a median loss of $500, according to the FTC.

The FTC’s Consumer Sentinel Network—a database that receives reports directly from consumers, as well as from federal, state, and local law enforcement agencies and nonprofits, among others—received more than 5.7 million reports in 2021, including those for fraud and others.

Additional reports related to theft and complaints about other consumer issues, such as problems with credit bureaus, banks, and lenders, according to the FTC.

When it came to identity theft, there were nearly 1.43 million reports received by the FTC in 2021, up from nearly 1.39 million in 2020.

“Bank transfers and payments accounted for the highest aggregate losses reported in 2021 ($756 million), followed closely by Cryptocurrency ($750 million), while credit cards were most frequently identified as the payment method in fraud reports,” the FTC stated.

The Internal Revenue Service stated in January that it was witnessing “mountains and mountains of fraud” in non-fungible tokens (NFTs) and cryptocurrencies, which the agency said are highly susceptible to fraud and manipulation as they grow in popularity.

Regulators are struggling to tell police how the tokens are used and to prevent them from being utilized for criminal activity such as fraud, money laundering, market manipulation, and tax evasion.

The IRS Criminal Investigation Unit seized $3.5 billion in cryptocurrency during fiscal year 2021, which accounted for 93 percent of its criminal investigation seizures, according to the agency’s annual criminal investigation report, which was published in November 2021 (pdf).

The FTC said it found that younger people reported losing money to fraud more than older people in 2021.

Those aged 20 to 29 reported losing money to fraud in 41 percent of reports filed with the FTC, while individuals aged 70 to 79 reported losing money in 18 percent of such reports. People aged 80 and older reported fraud loss in 17 percent of reports.

However, the FTC noted that when older individuals lost money, it was typically around the $1,500 mark, three times more than younger individuals typically lost.

According to a study published in 2021, researchers haven’t yet established why some individuals fall victim to scams while others recognize the signs.