[ad_1]
Dive Brief:
- The amount of money consumers made in cash payments to scammers impersonating government agencies nearly doubled last year, compared to 2022, according to data from the Federal Trade Commission.
- U.S. consumers reported losing $76 million by making cash payments to government impersonation scammers in 2023, up 90% from $40 million in 2022, according to an FTC press release last Friday. And the losses appear to be rising further with the federal agency reporting first-quarter cash payment losses of $20 million to those scams, with a median loss of $14,740, the release said.
- “There has been really an escalation in the severity of some of these scams, and just how effective they can be with people, and the amount of money they can take in one shot,” FTC Senior Data Researcher Emma Fletcher said in a Tuesday interview.
Dive Insight:
The commission found that the total losses to government impersonation scams across all payment types increased 24% last year to $618 million, after rising 16% between 2022 and 2021, according to the press release.
The median cash loss to those scammers of $14,740 in Q1 2024 was well above the median loss for all payment types, which was just $1,000, Fletcher said. Part of the reason for those large losses may have to do with the nature of cash scam payments being “difficult to trace and difficult to recover,” she said.
Credit cards were the most common payment overall for scams, including government impostor scams, last year, according to public FTC data.
When it came to losses for all kinds of fraud last year, payment apps such as PayPal or Zelle led in median individual losses at $380, ahead of credit cards at $136 and debit cards at $110, according to a public post from the Commission.
Fraud, including issues such as government impersonation scams, has grown into a $10 billion issue for U.S. consumers, according to FTC data, raising concerns in Congress from Republicans lawmakers during a hearing last week where the House Financial Services Committee heard from the director of the Consumer Financial Protection Bureau.
And while overall cash use has held steady in the U.S., Fletcher said the FTC press release was meant to warn consumers to be aware of its growing popularity as a payment type favored by government impostors seeking to dupe victims.
“You might not think of cash as being a way that scammers would want to get paid, but they are finding ways to make it work for them,” Fletcher said. She also pointed to the role financial institutions could play in stopping these scams by monitoring withdrawals.
“With these types of payments there will be a point at which the consumer is making a very large cash withdrawal,” Fletcher said. “It reinforces the importance of banks doing what they can in this area to help consumers avoid these scams.”
[ad_2]
