The Federal Reserve Bank of Kansas City is warning about a surge in new financial scams targeting Americans in the last five years.
According to a new briefing from the Kansas City Fed, the amount of money U.S. consumers lost to scams has more than tripled between 2020 and 2024, skyrocketing from around $2.6 billion to $8.9 billion last year.
The top five most lucrative scam types – ranging from investment schemes and imposter fraud techniques like posing as businesses or government agencies, to romance and online shopping scams – now account for 60% of total fraud losses, up from 42% in 2020.
Each scam category saw dramatic growth. Investment scams led the pack with losses increasing nearly twelvefold, while imposter scams surged about fivefold, according to the Kansas City Fed.
New contact methods like social media, pop-ups, and mobile apps are now more effective than traditional methods like mail, phone, email, text – and consumers are falling for them at higher rates.
On the payments side, the trend is toward more digital methods. For investment fraud, cryptocurrency now accounts for about 40% of payment methods, while bank transfers have surged across nearly all scam types.
Says the bank,
“These trends have implications for scam mitigation efforts. Social media and digital platforms have important roles to play in stopping scams, as scammers increasingly use social media and web- or app-based methods to contact consumers.
Financial institutions and other payment service providers may need to develop and adopt mitigation tools that identify scams quickly and intercept payments before they reach scammers, as scammers may increasingly target newer payment methods, including real-time payments and payment apps.”
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