The Federal Trade Commission report that fraud was the top consumer complaint for the first time ever in 2018. No wonder: Consumers lost nearly $1.5 billion to fraud last year — about 40 percent higher than the year before. Following fraud at the top of the list came consumer gripes about debt collection and identity theft.
The number of consumer fraud complaints resulted from an increase in government imposter scams. Fraudsters posing as employees of the Social Security Administration or IRS told victims they lost Social Security numbers and asked for payment or personal information to “reactivate” accounts.That would be a problem, except Social Security numbers are never suspended, and the Social Security Administration never requires people to obtain one.
Of 3 million total consumer complaints, 1.4 million were fraud reports. More than one-third of fraud reports involved imposter scams. Government scams cost nearly $488 million, with median loss per consumer of about $500.
Other examples of fraud included, scammers posing as “relatives” in distress and others that masquerade as attempts to extract money from victims.
Instead of digital communications, phone calls were the main method scammers used to contact individuals, counting for more than two-thirds of fraud reports. Although only 8 percent of people reported losing money to a scammer this way, such victims reported a median loss of $840.
More consumers reported paying the scammers with gift or reload cards in 2018, at a cost to them nearly doubling to $78 million from the previous year. Still, wire transfers and credit cards remained the top forms of payment for fraud, counting for about $423 million.
Younger people reported losing money to fraud more often than older people. More than 40 percent of people in their 20s said they were victims vs. only 15 percent of people in their 70s.
However, oldsters who did lose money lost more, suffering a median loss of $751, while people in their 20s reported losing $400.
Florida, Georgia and Nevada were the top three states for fraud, according to the FTC report.