The Top Frauds of 2018 (and How You Can Avoid Being a Victim)

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I regularly receive updates from the FTC as they produce some interesting content and let you know about any new or unusual activity out there in regards to trade / commerce and how some “not-nice” people out there could be looking to take advantage of you.

They’ve recently released a report on last years fraud activity and what they were seeing. And, it’s amazing to me how many people fall victim to their ploys and the money (whoa!) lost is incredible (total of $1.48 billion last year).

Needless to say there is a reason you are getting those “I’m a relative from Timbuktu needing money to fix my car” emails: it pays.

Having only been affected by credit card scammers at retailers where I’ve had to replace my credit card 2x in the last 8-10 years – I’ve been fortunate to not encounter heavy losses as a result of fraud.

In any case, here’s what the FTC reported in regards to fraud activity in 2018:

  • We  more than 1.4 million fraud reports, and people said they lost money to the fraud in 25% of those reports. People reported losing $1.48 billion (with a ‘b’) to fraud last year – an increase of 38% over 2017.
  • The top reports in 2018 were: imposter scams, debt collection, and identity theft.
  • Younger people reported losing money to fraud more often than older people. Let that sink in. It’s what the data have been telling us for a while, but it’s hard for people to grasp. Last year, of those people who reported fraud and their age, 43% of people in their 20s reported a loss to that fraud, while only 15% of people in their 70s did.
  • When people in their 70s did lose money, the amount tended to be higher: their median loss was $751, compared to $400 for people in their 20s.
  • Scammers like to get money by wire transfer – for a total of $423 million last year. That was the most of any payment method reported, but we also saw a surge of payments with gift and reload cards – a 95% increase in dollars paid to scammers last year.
  • Tax-related identity theft was down last year (by 38%), but credit card fraud on new accounts was up 24%. In fact, misusing someone’s information to open a new credit card account was reported more often than other forms of identity theft in 2018.
  • The top 3 states for fraud and other reports (per 100K population) are Florida, Georgia and Nevada. The top 3 states for identity theft reports (also per 100K) are Georgia, Nevada and California.

What stands out to me in this report are a couple things:

Young folks report fraud more than older people. This is one of those stereotypes which has been blown for me. I typically think of people who are older falling victim to fraud. Perhaps because some may not be as tech savvy or be more trusting.

Though of the people who reported fraud activity, people over 70 lost the most. This is sad.

The increase of fraud was 38% over the previous year. This is amazing. One would think people would be getting smarter year by year and wising up to the different schemes. It turns out the scammers are the ones upping their game.

What can you do to prevent falling victim?

First you can see where much of the fraud is happening. The FTC provides data on where fraud transpired – state-by-state. In Minnesota, where I live, the data shows there were 73 reports for every 100k people (for identity theft). This doesn’t seem terrible. In comparison, Georgia (one of the highest reports of identity theft, had 229 reports per 100k).

Next, if you are a victim of fraud, you can file a complaint here. While this may not help you situation, it could prevent the the scammer from getting to their next victim.

Lastly, a couple of thoughts to keep you in mind:

  • Be aware of what you are clicking on and sites you are visiting. I think many of us are a little too trusting when we go online. I think we need to keep our wits about us – much like if we were to be in an unfamiliar place OR a dark alley. If a site or email looks or feels suspicious – trust your gut.
  • Never provide a credit card to a site without an “https” in front of the domain. This is a security certificate that – most likely – costs some money to obtain. Also, you’ll want to see some verification in the footer – perhaps the Better Business Bureau or other verification service.
  • Call up the company before you provide your credit card online. This will ensure there are people on the other end and could give you a greater sense of security. I’m always a little leary of a website that doesn’t list a phone number.

Hope this helps! Have you ever been affected by fraud or a scam?

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