STATE OF ONLINE SCAMS 2024

– Record $12.5 Billion Stolen, 39% Scammed by AI Deepfake Technology –

Americans lost a record $12.5 billion to online scams in 2023, an increase from $10.3 billion in 2022, according to the Federal Bureau of Investigation Internet Crime Complaint Center (IC3). An unprecedented 39% of victims were scammed using AI deepfake technology.

Despite increased national awareness and regular warnings from the government, financial institutions and private companies in the Internet safety space, the perpetrators have been able to keep flourishing, setting new records year after year. 

This national crisis is likely to get worse in the years ahead as scammers can now use artificial intelligence to create deepfake videos of business leaders, celebrities, politicians and romantic suitors that are difficult to detect. Legendary investor Warren Buffett said recently that AI’s use in scams is going to be the biggest “growth industry of all time.”

Deepfake videos are being used across all types of scams including investment, crypto and romance scams.  They are also being used to spread misinformation in an effort to impact the 2024 Presidential Election. 

In recent years, investment scams have skyrocketed to No. 1 with Americans losing a record $4.57 billion in 2023, up from $3.3 billion. An unprecedented 86.7% of investment scams involved crypto which may be why Millennials fell for more investment scams than any other generation last year. 

Despite their tech prowess, the number of teen and Gen-Z online scam victims also surged by nearly 10% last year, which shows that scammers have grown increasingly sophisticated, and this can also be tied to a rise in sextortion scams, which has led many teens to commit suicide. 

Online scams are a global crisis but America is by far the most targeted nation due to its affluence and reliance on technology.  According to the FBI Internet Crime Report from 2023, Americans filed 521,652 complaints, while the next 19 most impacted nations filed 315,335 complaints combined. 

Online scams impact certain states more than others. California is the No. 1 most-scammed state when it comes to money lost, losing $2.2 billion last year, followed by Texas, Florida and New York. However, Georgia ranks No. 1 for the most complaints filed with the FTC per capita with 1,564 per 100,000 residents, followed by Florida and Nevada. 

Our analysis of the most recent FBI data revealed that more that 95.7% of money lost in 2023 was never recovered. This is due to most scammers living overseas, where U.S. law enforcement has no jurisdiction, and it speaks to a lack of international government cooperation. 

With too many Americans losing their life savings, and law enforcement unable to recover the stolen funds in most cases, it is critical that people take this seriously and learn to spot and avoid scams before they occur. 

Social Catfish – a company dedicated to eradicating online scams using reverse search technology – is releasing this study after analyzing the most recent data from the FBI Internet Crime Complaint Center (IC3) and the Federal Trade Commission (FTC) through 2023 and after conducting a proprietary poll of more than 6,000 romance scam victims in August 2024 — the largest poll ever conducted.

Key Findings:

• 5 Costliest Online Scams: Investment ($4.57 billion), BEC scams ($2.95 billion), Confidence Fraud/Romance ($653 million), Tech Support ($925 million), and personal data breach ($744 million)
• Use of AI and Deepfake Videos Surging in investment, romance and political scams. Social Catfish created a mock deepfake video and explains how to spot them here. 
• 5 States That Lost the Most Money: California ($2.1B), Texas ($1 billion), Florida ($875 million), New York ($750 million), and New Jersey ($441 million).
• 5 States with the Most FTC Complaints Per Capita: Georgia (1,564), Florida (1,563), Nevada (1,531), Delaware (1,500), and Maryland (1,372).
• 5 Most-Scammed Countries: US (521,652 victims), UK (288,355), Canada (6,601), India (3,405), and Nigeria (1,779).
• Crypto Accounted for 86.7% of Investment Scams: A record $3.96 billion was lost last year to fake crypto investment scams. 
• Surge in Tech-Savvy Teen, Gen-Z and Millennial Victims: Millennials fell for more investment scams than any generation: Victims ages 30-49 filing more than 13,000 complaints last year. The number of teen and Gen-Z victims across all online scams surged by nearly 10% last year to 80,584 alongside a rise in sextortion scams.
• 95.7% of Stolen Funds Were Not Recovered in 2023: The FBI IC3 Recovery Asset Team was able to recover $538.39 million, or 4.3%, of the total $12.5 billion lost by victims in 2023. This is because most scammers reside internationally and there is a lack of cooperation between countries to bring scammers to justice. 

The Rise of Artificial Intelligence (AI) and Deepfake Videos

Legendary investor Warren Buffett said recently that AI’s use in online scams is going to be the biggest “growth industry of all time.” Scammers are using AI to create deepfake videos pretending to be business leaders, celebrities, love interests, and even politicians. Below we examine how they are being used in investment scams, romance scams and to impact the 2024 presidential election.

What is a Deepfake Video and How is AI Involved in Scams

A deepfake video is a synthetic media in which a person in an existing image or video is replaced with someone else’s likeness. Utilizing artificial intelligence, particularly deep learning algorithms, these videos can be highly convincing, making it difficult to discern real from fake. AI is involved in scams by creating these deepfakes to impersonate celebrities, politicians, or business leaders, thus lending credibility to fraudulent schemes. For example, a scammer might create a deepfake video of a well-known personality endorsing a dubious investment, thereby deceiving individuals into parting with their money.

How it is Used in Investment Scams

Deepfake technology is also exploited in investment scams, where fraudsters create videos of famous entrepreneurs promoting fake investment opportunities. These videos appear highly realistic, convincing unsuspecting individuals to invest in fraudulent schemes. For example, a recent deepfake video of Elon Musk endorsing a fake cryptocurrency may have caused investors to lose massive amounts of money. News reports have documented such scams where deepfakes are used to trick people into believing in false endorsements.

Key ways to identify deepfakes are by looking for telltale signs like unusual skin tones, inconsistent shadows, and lip-synch errors. Regulators also advocate for the evaluation and adoption of AI-based technologies that detect fraudulent deepfakes, using tools that verify image authenticity and customer identities through facial biometrics.

How it is Used in Romance Scams

In romance scams, deepfakes are used to create fake video calls and messages, making the scammer appear as someone they are not. By using AI to generate videos of attractive individuals expressing love and affection, scammers can emotionally manipulate their victims. These deepfakes enhance the believability of the scam, making victims more likely to send money or personal information. Historically, if an online love interest would not video chat, it was a good sign they were scammers. However, now for the first time-ever, scammers can have real-time video chats using face swapping technology. Reports have shown an increase in deepfake-enabled romance scams, where victims are deceived into long-term relationships with non-existent individuals.

For example, a scammer could send a deepfake video of “themselves” speaking directly to the victim, reinforcing the illusion of a genuine connection. This visual authenticity makes it harder for victims to doubt the scammer’s identity.

Deepfakes can be used to create dramatic, emotionally charged scenarios that elicit strong reactions from the victim. For example, a scammer might send a deepfake video showing themselves in a dangerous situation, pleading for help. The emotional impact of seeing a loved one in distress, even if fabricated, can push the victim to act impulsively, often leading to financial loss or other forms of exploitation.

Online Scams and the 2024 Presidential Election

Deepfake Technology

Deepfake technology poses a significant threat to the integrity of the 2024 Presidential Election. This advanced AI technique allows for the creation of highly realistic videos in which individuals appear to say or do things they never did. In the political arena, deepfakes can be used to spread misinformation, discredit candidates, and manipulate public opinion, potentially impacting who will become the 47th President of the United States. 

For instance, Rep. Barbara Lee (D-Calif.) criticized Elon Musk for sharing a deepfake video that impersonates Vice President Kamala Harris and mocks her and President Biden. The video, posted on social platform X, falsely portrays Harris as calling Biden senile and herself the “ultimate diversity hire.” Lee condemned the video as “dangerous” and called for regulations on AI to prevent such misuse.

A recent deepfake of President Joe Biden used in a New Hampshire robocall, urging voters not to participate in the primary has prompted calls for federal legislation. 

This incident has prompted many states to introduce and pass laws banning deepfakes in elections. Since January of last year, 41 states have introduced such bans, and eight have enacted them, joining California and Texas, which passed similar laws in 2019. However, these laws vary in approach and effectiveness, often balancing the need to prevent election interference with the protection of free speech.

As policymakers and regulators in Washington rush to draft legislation to combat this, a significant regulatory gap is becoming evident. Bipartisan efforts to prohibit the false depiction of federal candidates using AI technology are unlikely to result in new laws before the November elections. 

In the absence of comprehensive regulations, individual Americans need to become aware of how to spot deepfake videos. 

How to Spot Deepfake Videos

1. Unnatural Movement: Look for irregularities in facial movements or expressions. In many deepfakes, the blink rate or subtle facial movements are off, or there may be anomalies in how the eyes, mouth, or other features move.
2. Inconsistent Lighting and Shadows: Deepfakes often struggle with maintaining consistent lighting and shadows, especially when elements from different sources are combined. Discrepancies in shadow direction or lighting quality can be telltale signs.
3. Poor Lip Syncing: In videos where the person is speaking, mismatches between the spoken words and the movement of the lips can be an indicator.
4. Audio Irregularities: Changes in the tone or quality of the voice that don’t match usual patterns can be a red flag, especially if the audio sounds flat or emotionless.
5. Using Reliable Sources: Always check the source of a video. Trusted and verifiable sources are less likely to distribute deepfakes.

In addition to personal vigilance, technological solutions are also being developed to detect deepfakes. Companies and researchers like Social Catfish are working on AI-driven tools that can spot signs of digital tampering that might be invisible to the human eye. Public awareness campaigns and education about digital media literacy can also empower individuals to critically assess the content they consume, reducing the impact of deepfakes. As this technology evolves, a multi-faceted approach involving technology, regulation, and education will be essential to mitigate the threats posed by deepfake videos.

Exploring the Evolving Landscape of Scams: Insights from Our 2024 Surveys

In July-August 2024, we conducted two detailed surveys to uncover insights into the growing landscape of scams. The first survey, focused on online scams in general, gathered responses from more than 6,000 individuals and provided valuable data on the types of scams, victim experiences, and their consequences. The second survey delved into the emerging role of AI in online scams, including the use of deepfake videos and AI-generated audio. Both surveys were conducted to better understand how scams are evolving and their impact on people’s lives. The results reflect the latest trends and behaviors and offer a timely snapshot of the threats individuals face online.

Key Findings

Popular Platforms for Scams

According to our online scam survey of 500 participants, social media continues to be a major platform where scams occur. Facebook was the leading platform, with 27.91% of respondents reporting they encountered scams on this platform. Other platforms, such as Instagram (12.85%) and WhatsApp (12.45%), also saw significant scam activity. Interestingly, dating apps like Tinder and Bumble saw lower percentages but are still notable, with Tinder at 1.41% and Bumble at 1.20% .

Common Payment Methods Used by Scammers

Cryptocurrency remains the most common payment method used by scammers, with 26.99% of participants indicating they had sent payments via Bitcoin or Ethereum. Gift cards were also widely used (43.35%), and wire transfers or bank transfers accounted for 25.15%.

Reporting Scams

Only 19.67% of participants reported their scam experiences to the Federal Trade Commission (FTC), despite 80.33% of respondents having been scammed. This highlights a potential gap in reporting, which may be due to the complexity of reporting systems or victims not knowing where to file a report.

Consequences of Scams

The impact of scams extends beyond financial losses. Nearly half (47.41%) of respondents faced financial hardship, while 56.52% reported emotional distress, and 28.99% experienced relationship strain. This indicates that scams leave lasting psychological and social impacts in addition to the monetary damage.

Familiarity with AI and Deepfake Videos

In our AI-focused survey with 1,000 respondents, 39.18% of respondents were moderately familiar with the concept of deepfake videos, and 31.19% had encountered a deepfake video online. This suggests that while awareness is growing, a significant portion of the population may still be vulnerable to AI-powered scams.

Victimization by AI-Driven Scams

A significant 38.87% of respondents reported that they or someone they knew had fallen victim to an online scam involving AI technologies such as deepfake videos or AI-generated audio. The most common types of scams related to AI were romance scams (64.13%) and phishing attempts (21.28%), with fewer incidences of investment (6.38%) or political scams (2.43%).

Financial Loss from AI Scams

Nearly half of those scammed by AI-driven techniques experienced financial losses. The survey revealed that 47.56% faced no financial loss, but 25.71% lost over $5,000 due to these scams. This underscores the high stakes involved in AI scams.

Confidence in Detecting Deepfakes

Although a significant portion of respondents are concerned about AI-based scams, only 12.24% were aware of tools to detect deepfakes, and just over half (50.93%) expressed low confidence in their ability to identify deepfake videos. This reflects a growing need for educational tools and resources to help people identify AI-generated content.

Concerns About AI in Politics

The survey also highlighted concerns about the potential misuse of AI, particularly in the political sphere. Around 31.42% of participants were extremely concerned about deepfakes being used in political campaigns, while 67.21% believed that deepfake videos could significantly or extremely influence voter decisions in elections.

Which States Lost the Most Money to Online Scams?

California was the hardest hit state with more than 75,000 victims losing a staggering $2.2 billion last year. The rest of the top five included other large states including Texas, Florida, New York and New Jersey.  

On the other end of the spectrum, North Dakota lost the least amount of money and had just over 700 victims. Still, residents in the state lost a heft $14.3 million which shows that even smaller states are experiencing large losses. Vermont, Alaska, Wyoming and West Virginia round out the five states that were the least amount of money lost.

States With The Most Victims Per Capita

When it comes to which states are most susceptible to online scams, we take into account the number of reports filed with FTC adjusting for population size to present an accurate measure. Six of the top 10 states are on the east coast and the top two states are neighbors in the southeast. 

Based on complaints filed with the FTC in 2023, Georgia ranks No. 1 in the nation filing 1,564 reports per 100,000 residents. Their neighbor Florida ranks No. 2 followed by Nevada. On the other end of the spectrum, five of the 10 states with the fewest reports per capita are in the midwest, including the top three spots taken by South Dakota, North Dakota and Iowa. Kansas filed the 5th fewest reports and Nebraska came in at No. 7. 

100 Metropolitan Areas with the Highest Rates of Online Scam Complaints

Analysis of the data found that certain cities and metropolitan areas are hotbeds for online scams. Among the top 100, Florida has 21 metropolitan areas on the list, this represents more than 20% of the list. Georgia, North Carolina and South Carolina all had seven metropolitan areas represented, California had six, while Texas, Arizona, Alabama, and Louisiana had five. 

Top 10 Most Financially Devastating Online Scams

Investment fraud has skyrocketed in recent years and is the No. 1 costliest type of fraud in America for the second year in a row, according to the FBI. A record $4.57 billion was lost to investment fraud in 2023, up from $3.3 billion in 2022 and a staggering 18 times higher than $253 million in 2018.

Business Email Compromise (BEC), which previously held the top spot as of 2021, ranks No. 2 ($2.95 billion) confidence fraud/romance scams ranks No. 3 ($652.5 million), tech support ranks No. 4 ($924.5 million) and personal data breach rounds out the top five ($744.2 million). 

1. Investment Scams

How They Work: Fraudsters contact victims via social media, business networking sites, dating apps, and via email and text promising “can’t miss” investment opportunities with enormous returns and little or no risk. Scammers then disappear with the money, or send fake reports to get people to keep investing. 

5 Types of Investment Scams: 

• Ponzi schemes promise high returns with little risk by paying earlier investors with the funds from newer investors, rather than from actual profit earned. These schemes eventually collapse when there aren’t enough new investors to pay returns to earlier ones. To avoid falling victim, be skeptical of investments that guarantee high returns with no risk.
  

• Pyramid schemes involve recruiting participants who are promised payments for enrolling others into the scheme rather than selling a legitimate product or service. These scams rely on a constant influx of new participants to fund payouts, and they collapse once recruitment slows down. It’s important to be cautious of any investment opportunity that emphasizes recruitment over a tangible product or service.
  
• In pump and dump schemes, fraudsters artificially inflate the price of a low-value stock through false and misleading statements, only to sell their shares at the peak price, leaving other investors with worthless stocks. These schemes are often promoted through social media and online forums. Always conduct thorough research before investing in low-value stocks being hyped online.
  
• Advance-fee fraud involves scammers who promise victims a significant return on investment, but only after they pay an upfront fee. Once the fee is paid, the scammer disappears without providing the promised return. To protect yourself, never pay upfront fees for the promise of future returns.
  
• Offshore investment scams lure victims with promises of tax-free returns from investments located in foreign countries. These investments are often fraudulent, and victims find it difficult to recover their money due to international legal barriers. Before investing in any offshore opportunities, seek advice from a trusted financial professional and verify the legitimacy of the investment.

Tips to Avoid Them: Consult a third-party financial professional before investing; do research and verify the company and person you are investing with; if something seems too good to be true, it usually is. 

2. Business Email Compromise Scams (BEC)

How They Work: Fraudsters pose as company executives or trusted business partners and send fraudulent emails to employees, instructing them to transfer funds to accounts controlled by the scammers. These emails often appear legitimate and urgent, leveraging authority and trust to bypass normal verification procedures.

5 Types of BEC Scams: 

• In CEO fraud, scammers impersonate a company’s CEO or high-ranking executive and send an urgent email to an employee, typically in finance or HR, instructing them to wire money to a specific account. The email often stresses confidentiality and urgency to prevent the employee from questioning the request. It’s crucial to implement strict protocols for verifying such requests, including direct verbal confirmation.
  
• In an account compromise scam, a cybercriminal gains access to an employee’s email account and uses it to send fraudulent invoices or requests for payment to vendors or clients. The recipients, believing the request to be legitimate, transfer funds to accounts controlled by the scammers. Regular monitoring and multi-factor authentication can help prevent unauthorized access to email accounts.

• Invoice fraud occurs when scammers impersonate a supplier or vendor and send a fake invoice to a company’s accounts payable department. The invoice appears to be for legitimate goods or services, but payment is directed to a bank account controlled by the fraudsters. Companies should verify all invoice details, especially changes to payment accounts, by contacting the vendor directly through a verified method.
  
• In data theft BEC scams, attackers target HR or finance employees, requesting sensitive information such as employee tax records, payroll details, or personally identifiable information (PII). This information can then be used for identity theft, tax fraud, or further spear-phishing attacks. Limiting access to sensitive data and implementing strict verification procedures for data requests can help protect against this type of scam.
  
• In lawyer impersonation scams, fraudsters pose as legal representatives or external law firms handling confidential or sensitive matters. They contact employees, often in the finance department, and instruct them to make urgent, confidential payments, often under the guise of settling a legal matter. Educating employees about this tactic and verifying requests through independent channels can prevent such scams from succeeding.

Tips to Avoid Them: Implement a multi-step verification process for fund transfers, educate employees on how to recognize phishing emails, and encourage verification of transfer requests through a secondary communication method, such as a phone call to the requester.

3. Tech Support Scams

How They Work: Scammers pose as tech support agents from reputable companies, claiming that your computer has a virus or other issues. They convince victims to grant remote access to their computers and charge for unnecessary repairs or install malware to steal personal information.

5 Types of Tech Support Scams: 

• Scammers create fake pop-up warnings that appear on your computer, warning you that your system is infected with a virus or malware. These pop-ups often mimic legitimate security alerts and instruct you to call a toll-free number for immediate assistance. Once you call, the scammer will try to sell you unnecessary software or gain remote access to your computer to steal your personal information.
  
• In cold call scams, fraudsters call you directly, claiming to be from a well-known tech company like Microsoft or Apple. They tell you that they have detected problems with your computer, such as viruses or outdated software, and offer to fix the issue remotely. They often ask for payment for their “services” and may install malware or steal sensitive information once they gain access to your computer.
  
• Scammers send fake emails that appear to be from legitimate tech support companies, warning you of supposed issues with your computer or account. These emails often contain links that lead to phishing websites where you’re prompted to enter personal information or download malicious software. Alternatively, the email may direct you to call a fake tech support number where the scammer tries to gain remote access to your device.
  
• Scammers set up fake websites that appear to be official tech support pages for reputable companies. These sites often rank high in search engine results for queries like “Microsoft tech support” or “Apple help.” When you visit these sites and call the listed number, you’re connected to a scammer who will attempt to charge you for unnecessary services or install malware on your device.
  
• In this type of scam, the fraudster convinces you to install remote access software, claiming it’s necessary to fix your computer. Once the software is installed, the scammer has full control of your computer and can steal your data, install malware, or lock you out of your system entirely. They may then demand payment to restore access or remove the supposed issue.

Tips to Avoid Them: Never give control of your computer to someone who contacts you unexpectedly, verify the identity of any tech support agent through official company channels, and use reputable security software to protect your devices.

4. Personal Data Breach

How They Work: Hackers steal personal information such as Social Security numbers, credit card details, and login credentials through data breaches of companies’ databases. This information is then used for identity theft, financial fraud, or sold on the dark web.

5 Types of Personal Data Breach Scams

• Phishing scams involve hackers sending fraudulent emails or messages that appear to be from a trusted organization, such as a bank or social media platform. These messages often contain links to fake websites where victims are prompted to enter their personal information, such as login credentials or credit card numbers. Once the information is entered, it’s captured by the scammer and used for identity theft or sold on the dark web.
  
• In ransomware attacks, hackers infiltrate a company’s database or a user’s device and encrypt their personal data, rendering it inaccessible. The attackers then demand a ransom in exchange for the decryption key. Even if the ransom is paid, there’s no guarantee that the data will be restored, and the stolen information may still be sold on the dark web.
  
• MitM attacks occur when a hacker intercepts communication between two parties, such as a user and a website, to steal personal information. For example, if a user connects to an unsecured public Wi-Fi network, a hacker can intercept the data being transmitted, including login credentials and credit card details. This stolen information is then used for financial fraud or identity theft.
  
• Malware infections involve the use of malicious software to gain unauthorized access to a user’s personal data. This malware can be installed on a user’s device through phishing emails, malicious websites, or infected downloads. Once installed, the malware can steal sensitive information such as passwords, Social Security numbers, and bank account details, which the hacker can then exploit or sell.
  
• Insider threats occur when an employee or contractor within a company intentionally leaks or steals personal data. This can happen if the individual is disgruntled or is being paid by an external party to share confidential information. Insider threats are particularly dangerous because the perpetrators often have legitimate access to sensitive data, making it difficult to detect the breach until the damage is done.

Tips to Avoid Them: Use strong, unique passwords for different accounts, enable two-factor authentication, monitor your financial statements regularly for unauthorized transactions, and freeze your credit if you suspect your information has been compromised.

5. Confidence Fraud/Romance Scams

How They Work: Scammers create fake profiles on dating sites and social media to establish relationships with victims. Over time, they build trust and then fabricate emergencies, asking for financial help. Once the money is sent, the scammer often disappears. However, sometimes they stick around, making excuses to request more money while avoiding any in-person meetings.

• The scammer creates a fake online identity on dating sites or social media platforms to lure victims into emotional or romantic relationships. Once trust is established, they manipulate the victim into sending money, gifts, or personal information.
  
• Scammers pose as military personnel stationed overseas, often using stolen photos of real soldiers. They fabricate stories about needing money for leave, medical emergencies, or other fabricated expenses.
  
• Scammers target individuals who are grieving the loss of a spouse. They exploit the victim’s vulnerability by pretending to be a widow or widower themselves, using sympathy to build trust and eventually ask for financial help.
  
• The scammer claims to be in love with the victim and tells a story about receiving a large inheritance. They then request money for legal fees or other expenses needed to access the inheritance, promising to share the wealth once it’s received.
  
• The scammer pretends to be a foreign love interest and claims they need financial assistance to obtain a visa or pay for travel expenses to come to the victim’s country. Once the money is sent, the scammer disappears.

Tips to Avoid Them: Be cautious of anyone who quickly professes love, never send money to someone you haven’t met in person, and do a reverse image search on their profile pictures to check for authenticity.

6. Data Breach

How They Work: Hackers steal personal information such as Social Security numbers, credit card details, and login credentials through data breaches of companies’ databases. This information is then used for identity theft, financial fraud, or sold on the dark web.

• Scammers send fake emails or messages that appear to be from reputable companies, tricking victims into revealing personal information like passwords, credit card numbers, or Social Security numbers. This data is then used for identity theft.
  
• Cybercriminals breach a company’s database and encrypt sensitive data, demanding a ransom for its release. If the ransom isn’t paid, the data may be sold on the dark web or publicly released.
  
• Hackers use stolen login credentials from one breach to access accounts on other websites, banking on the fact that many people reuse passwords across multiple sites. This leads to further unauthorized access and data theft.
  
• Hackers impersonate trusted individuals or organizations to manipulate victims into divulging confidential information. This information is then used to access accounts, steal identities, or commit financial fraud.
  
• Scammers gain control of a victim’s phone number by convincing the phone company to switch the number to a new SIM card. This allows the scammer to bypass two-factor authentication and gain access to the victim’s accounts.

Tips to Avoid Them: Use strong, unique passwords for different accounts, enable two-factor authentication, monitor your financial statements regularly for unauthorized transactions, and freeze your credit if you suspect your information has been compromised.

7. Government Impersonation Scams

How They Work: Scammers pose as government officials from agencies like the IRS, Social Security Administration, or law enforcement. They contact victims claiming they owe money, need to verify personal information, or face arrest if they don’t comply. They often use threats and high-pressure tactics to instill fear.

• Scammers pose as IRS agents, claiming that the victim owes back taxes and must pay immediately to avoid arrest. They often demand payment via gift cards, wire transfers, or cryptocurrency.
  
• The scammer claims to be from the Social Security Administration, warning the victim that their Social Security number has been suspended due to suspicious activity. They demand personal information or payment to resolve the issue.
  
• Victims receive a call or message from someone claiming to be a law enforcement officer, stating that they failed to appear for jury duty and must pay a fine immediately to avoid arrest.
  
• Scammers pose as Medicare representatives and ask for personal information or payment, claiming that new Medicare cards are being issued or that benefits are about to be cut off.
  
• Scammers impersonate officials from immigration services, threatening deportation unless the victim pays a fine or provides personal information to “correct” their immigration status.

Tips to Avoid Them: Remember that government agencies will never call and ask for personal information or demand immediate payment. Verify the identity of the caller by contacting the agency directly using official contact information. Do not provide personal information or payment over the phone.

8. Non-Payment/Non-Delivery Scams

How They Work: In non-payment scams, sellers do not receive payment for goods or services sold online. In non-delivery scams, buyers pay for goods or services online but never receive them. These scams often occur on auction sites, classified ads, and social media marketplaces.

• Scammers set up fake websites that look like legitimate online stores. Victims make a purchase, but the items are never delivered, and the website disappears shortly after.
  
• The scammer lists high-value items on auction sites, collecting payment from the highest bidder but never delivering the goods. Often, the items are counterfeit or don’t exist at all.
  
• Scammers post fake ads for popular items on classified sites. When the victim tries to buy the item, they’re instructed to send money, often via wire transfer, but never receive the product.
  
• The scammer pays for a service or product, receives the item, and then reverses the payment through their bank or credit card company, leaving the seller without payment.
  
• The scammer sends fake invoices to businesses or individuals for products or services that were never ordered or delivered, hoping the recipient will pay the invoice without checking its legitimacy.

Tips to Avoid Them: Use secure payment methods that offer fraud protection, avoid paying with wire transfers or gift cards, and research the buyer or seller before completing a transaction. Use reputable and well-known platforms that offer buyer and seller protection.

9. Credit Card/Check Fraud

How They Work: Scammers obtain your credit card or bank account information and use it to make unauthorized purchases or withdraw money. This can happen through phishing emails, skimming devices on ATMs or point-of-sale terminals, or data breaches.

• Scammers install skimming devices on ATMs or point-of-sale terminals to steal credit card information when the card is swiped. The stolen data is then used to make fraudulent purchases.
  
• Scammers send emails that appear to be from legitimate companies, asking recipients to update their payment information. The information entered is then used to commit fraud.
  
• Scammers send victims fake checks, often as payment for goods or services. The victim deposits the check, which initially clears, but is later found to be fraudulent, leaving the victim responsible for the amount.
  
• Scammers use stolen credit card information to make online or over-the-phone purchases, where the physical card is not required.
  
• Scammers gain access to a victim’s bank or credit card account by stealing login credentials. They then make unauthorized purchases or transfer funds out of the account.

Tips to Avoid Them: Regularly monitor your bank and credit card statements for unauthorized transactions, report lost or stolen cards immediately, use credit cards with chip technology, and be cautious when sharing financial information online or over the phone.

10. Real Estate Scams

How They Work: Scammers pose as landlords or real estate agents and offer properties for rent or sale that they do not own or have no authority to lease. They collect deposits and rent payments from victims and then disappear, leaving the victim without a property and out of pocket.

• Scammers post fake rental listings, often for properties they don’t own. They collect deposits and rent payments from victims but never provide access to the property.
  
• Scammers forge documents to transfer ownership of a property without the owner’s knowledge, then take out loans against the property or sell it to an unsuspecting buyer.
  
• Scammers prey on homeowners facing foreclosure, promising to negotiate with lenders to save their homes. They charge high fees and disappear without providing any help.
  
• Scammers offer fake real estate investment opportunities, promising high returns. They collect money from investors and then disappear, leaving the victims with nothing.
  
• Scammers pose as real estate agents, convincing victims to wire money for deposits, down payments, or closing costs. Once the money is sent, the scammer disappears, and the victim is left with no property and no money.

Tips to Avoid Them: Verify the legitimacy of the property and the landlord or agent by visiting the property in person, researching property records, and using licensed real estate professionals. Never send money without confirming the legitimacy of the transaction.

States with the Most & Least Crypto Scams Per Capita

An unprecedented 86.7% of all money lost to investment scams in 2023 involved crypto – totaling a record $3.96 billion. Chances are, if you are contacted or see an advertisement for a crypto investment, it is a scam. 

Fraudsters have also become adept at using crypto in romance scams by entering fake romantic relationships with their targets, usually via online dating platforms, social media, or messaging apps, with the ultimate goal of convincing the victim to invest in fraudulent cryptocurrency schemes.

Many people have lost their life savings to crypto scams. In one case, a father from Virginia committed suicide after losing his life savings after investing in crypto as part of a romance scam. 

10 Most Common Crypto Scams in 2024

Romance Scams

In romance scams, fraudsters build a fake relationship with the victim over time, often posing as attractive and sympathetic characters. These scammers use emotional manipulation to gain the trust and affection of their victims. Once trust is established, they fabricate emergencies or financial crises, convincing the victim to buy and send Bitcoin as a means of support. Victims, believing they are helping a loved one, willingly transfer Bitcoin to the scammer’s wallet, only to realize later that they have been deceived. These scams are prevalent on dating websites and social media platforms, making it difficult for victims to discern the true intentions of their online acquaintances.

Investment Scams

Investment scams lure victims with promises of high returns and lucrative opportunities. Scammers create convincing websites, testimonials, and social media profiles to present themselves as credible investment firms or financial advisors. They persuade victims to invest by purchasing Bitcoin and transferring it to the scammer’s wallet. The victims are often shown fake earnings reports to encourage further investments. Once a significant amount of Bitcoin is collected, the scammers disappear, leaving the victims with substantial financial losses. This method exploits the growing interest in cryptocurrency investments and the lack of understanding many people have about the industry. A particularly deceptive variant of investment scams is known as “pig butchering” scams. Scammers build long-term relationships with victims to gain their trust, posing as friends, romantic interests, or mentors. Over time, they introduce a fake investment opportunity, often involving cryptocurrency. As the victims grow more confident, they are encouraged to invest larger sums. Once the scammer decides they’ve extracted as much as possible, they disappear with all the funds, leaving victims financially and emotionally devastated. This scam is especially cruel as it exploits both the victim’s money and their trust.

Blackmail and Sextortion

Blackmail and sextortion scams involve threatening victims with the release of sensitive or compromising information or photos unless they pay a ransom in Bitcoin. Scammers obtain these materials through hacking, phishing, or deceitful interactions. Once they have the incriminating data, they contact the victim, demanding payment in Bitcoin to keep the information private. The anonymity of Bitcoin transactions makes it difficult to trace the recipients, making this method attractive to scammers. This type of scam can cause significant emotional distress and financial harm to victims, who often feel they have no choice but to comply with the demands.

Fake Online Marketplaces

Scammers create fake online marketplaces that appear legitimate, offering goods or services at attractive prices. Victims are enticed to purchase items using Bitcoin, thinking they are getting a great deal. After the transaction, the scammers disappear, leaving the victims without the goods or services they paid for. These fake marketplaces can be very convincing, with professional-looking websites and fake customer reviews. The irreversible nature of Bitcoin transactions means that once the payment is made, it is nearly impossible for victims to recover their money.

Impersonation of Authorities

In these scams, fraudsters impersonate government officials, law enforcement agents, or other authorities, claiming that the victim is in legal trouble. They threaten severe consequences, such as arrest or legal action, unless the victim pays a fine or fee in Bitcoin. The urgency and fear created by these threats often compel victims to comply without verifying the legitimacy of the claims. This scam exploits the trust and fear people have towards authorities, making them more likely to follow the instructions without questioning them.

Technical Support Scams

Technical support scams involve scammers contacting victims under the guise of providing tech support. They claim that the victim’s computer or device is infected with a virus or has technical issues that need immediate attention. The scammers then instruct the victims to pay for the service or necessary software using Bitcoin. They may also gain remote access to the victim’s device to further exploit them. These scams prey on people’s lack of technical knowledge and their fear of losing important data or functionality of their devices.

Phishing Scams

Phishing scams involve sending emails or messages that appear to be from legitimate companies or services, requesting Bitcoin payment for account verification, upgrade, or to avoid account suspension. These emails often contain links to fake websites that closely mimic the real ones, tricking victims into entering their personal information and making Bitcoin payments. Once the Bitcoin is transferred, it is impossible to reverse the transaction, leaving the victims defrauded. This method leverages the trust people place in recognized brands and services.

Employment Scams

In employment scams, victims are offered fake jobs and are asked to pay for job-related expenses or training in Bitcoin. Scammers create elaborate job offers with attractive salaries and benefits, convincing victims to invest in the required materials or certifications. In some cases, victims are used as money mules to transfer Bitcoin for the scammer under the guise of job tasks. Once the victims realize the job offer was a scam, they are often left with significant financial losses and, in some cases, may face legal issues for unknowingly participating in money laundering activities.

Ransomware Attacks

Ransomware attacks involve malicious software that encrypts the victim’s files, rendering them inaccessible. The attackers then demand a ransom in Bitcoin to decrypt the files and restore access. Victims are often desperate to regain their data, leading them to comply with the ransom demands. However, paying the ransom does not guarantee that the files will be restored, and it encourages further criminal activity. These attacks target individuals, businesses, and even government agencies, causing widespread disruption and financial losses.

Fake Charities and Donations

Scammers create fake charities or fundraising campaigns, soliciting donations in Bitcoin for causes that do not exist. They exploit people’s generosity and desire to help others, particularly during times of crisis or natural disasters. These fake charities often have professional-looking websites and emotional stories to convince victims to donate. Once the Bitcoin is transferred, it is difficult to trace, and the scammers disappear with the funds. This method not only defrauds victims but also diverts resources away from legitimate charitable causes.

Victims’ Psychological and Emotional Damage

The impact of online scams extends beyond financial loss to significant psychological and emotional distress:

1. Loss of Trust: Victims often experience a deep sense of betrayal, which can lead to difficulty trusting others. This erosion of trust can extend beyond personal relationships, affecting professional interactions and general social engagement, making it challenging for victims to form new relationships or maintain existing ones.
2. Stress and Anxiety: The financial instability caused by scams can lead to prolonged stress and anxiety. This constant worry not only affects mental health but can also have physical health implications, such as increased blood pressure and other stress-related conditions.
3. Depression: The emotional toll of being scammed can lead to depression, especially if significant sums are lost or if there is public embarrassment. This depression can be debilitating, affecting the victim’s ability to work, interact socially, and perform daily activities, further compounding their isolation and emotional distress.
4. Shame and Isolation: Victims might isolate themselves due to shame or fear of judgment from peers. This self-imposed isolation can prevent them from seeking the necessary help or support, exacerbating feelings of loneliness and making recovery even more challenging.

Seeking Support and Recovery

Recovering from an online scam involves more than recouping lost funds; it also requires addressing the psychological aftermath. Here are some steps victims can take:

1. Report the Scam: Contacting law enforcement and reporting to the Federal Trade Commission (FTC) or Internet Crime Complaint Center (IC3) can help authorities track and stop scammers.
2. Seek Financial Advice: Consulting with financial experts can help victims understand their options for financial recovery and prevent future incidents.
3. Hire an Online Research Specialist: Engaging an online research expert can help uncover essential online information, including financial or crypto transactions.
4. Access Emotional Support: Counseling or support groups for scam victims can be invaluable in helping to address feelings of betrayal and rebuilding trust.
5. Educate Others: Sharing experiences can empower other potential victims to recognize and avoid similar scams, turning a negative experience into a proactive tool for community awareness.

Where to go if you are an Online Scam Victim

If you fall victim to an online scam, here are some immediate steps you can take:

• Local Law Enforcement: Report to your local police, especially if the scam involves a significant amount of money. Involving law enforcement can also help document the incident, which may be crucial for insurance claims or tax deductions related to the loss.
• Internet Crime Complaint Center (IC3): File a complaint online with details of the scam. Providing detailed information can help law enforcement track down the perpetrators and potentially prevent others from falling victim to the same scam.
• Federal Trade Commission (FTC): Report the scam to the FTC, which handles consumer complaints and gathers data to prevent future fraud. The FTC also provides resources and guidance on how to recover from fraud and protect yourself from future scams.
• Your Bank or Financial Institution: Contact your bank or credit card company to discuss any transactions that need to be contested or security measures that should be put in place. Early intervention can prevent further unauthorized transactions and potentially reverse fraudulent charges.

International Resources

1. Interpol – Online Scam Reporting: Interpol provides resources and guidance on reporting cybercrime, including online scams, and works with national law enforcement agencies to address cross-border cyber threats.
2. International Consumer Protection and Enforcement Network (ICPEN): ICPEN offers resources for consumers to report scams and deceptive practices globally. They also provide information on consumer protection laws in various countries.
3. Action Fraud (UK): The UK’s national fraud and cybercrime reporting center provides a platform for reporting scams and receiving advice on how to recover from online fraud.
4. Canadian Anti-Fraud Centre (CAFC): The CAFC offers support and information on reporting scams in Canada and provides resources for financial recovery and legal advice.
5. Australian Cyber Security Centre (ACSC): The ACSC offers a reporting platform for online scams and provides guidance on cybersecurity and scam recovery for individuals and businesses.
6. NetSafe (New Zealand): NetSafe provides a platform for reporting online scams and cyberbullying in New Zealand, offering support and advice on protecting yourself online.

Local Resources

1. State Attorney General’s Office (USA): Many state attorney generals in the U.S. offer consumer protection services, including reporting online scams and seeking legal advice. Visit your state’s Attorney General website for specific resources.
2. State Consumer Protection Offices: Many states have local consumer protection agencies that provide advice and resources for victims of online scams. These offices can assist with legal advice, mediation, and financial recovery.
3. Community Legal Aid Services: Local legal aid organizations often provide free or low-cost legal advice to victims of online scams. They can help you understand your rights and pursue legal action if necessary. Check your local directory or search online for legal aid services in your area.
4. Local Law Enforcement: Victims of online scams should also report the incident to their local police department. Many local law enforcement agencies have cybercrime units that specialize in investigating online fraud and can provide assistance and resources.

Emotional Support Resources

1. Cybercrime Support Network (USA): This network offers resources and support for victims of cybercrime, including emotional support and referrals to counseling services.
2. Victim Support (UK): Victim Support provides emotional and practical assistance to victims of crime, including those affected by online scams.
3. Lifeline (Australia): Lifeline offers crisis support and suicide prevention services, providing emotional support to those affected by online scams and other forms of cybercrime.
4. Crisis Text Line (USA): A free, 24/7 support service for individuals in crisis, including those impacted by online scams. Text HOME to 741741 to connect with a trained crisis counselor.

5 Tips to Avoid Online Scams in 2024

In today’s digital age, the rise of online scams has reached alarming levels, with cybercriminals constantly devising new tactics to exploit unsuspecting victims. As these threats continue to grow, it is more important than ever to stay informed and vigilant. Understanding the evolving landscape of online scams and learning how to safeguard your personal information is crucial in protecting yourself from becoming a target.

Here are some strategies to better protect yourself from online scams in 2024.

1. Use an Online Privacy Protection Tool: An 24/7 active monitoring tool that scans the public data and dark web to alert you instantly if any of data is found online. Get alert of any potential threats via email or mobile app to take immediate action, securing your data and maintaining your privacy in today’s digital world.
2. Use a Password Manager: Given the increasing number of accounts individuals manage, using a password manager can help generate and store complex, unique passwords for each account, reducing the risk of password reuse and improving security.
3. Stay Informed About AI and Deepfake Technology: Scammers are increasingly using AI and deepfake technology to create convincing scams, such as fake videos or audio recordings of trusted individuals. Stay informed about these technologies and be skeptical of unsolicited communications that seem too good to be true or suspicious in any way.
4. Verify URLs and Email Addresses: Before clicking on links or responding to emails, double-check the URL and email address for legitimacy. Scammers often use addresses that closely resemble legitimate ones, with slight variations.
5. Use a VPN: Using a Virtual Private Network (VPN) when accessing the internet, especially on public Wi-Fi, can help protect your data from being intercepted by malicious actors.
6. Regularly Update Security Settings and Preferences: Regularly review and update your security settings on social media, email accounts, and other online services to ensure you are taking advantage of the latest security features and privacy settings.

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