Fraudsters Net $5.9 Billion in 2021
The Federal Trade Commission (FTC) released its 2021 Consumer Sentinel Network Data Book, with findings that indicate that last year saw a significant increase in identity theft and scammers targeting younger adults.
According to the 2021 Data Book’s snapshot, of the 5.7 million reports made by almost 2.8 million people, the three most prevalent categories emerging from the reports involved identity theft; imposter scams; and credit bureaus, information furnishers, and report users. Altogether, a total of $5.9 billion in losses to fraud was reported during 2021. Overall, this represents a 70 percent increase in fraud over the previous year.
While younger adults (ages 20 to 29) represented a larger demographic of people that reported being victims of fraud (41 percent) with a median loss of $500, adults 70 and older (18 percent) reported a significant higher median loss of $800 to $1,500.
The snapshot also reported that an estimated one in five people were victims of imposter scams. While the median loss for these victims was $1,000, the total loss amount reported for victims of scammers was $2,331 million.
Meanwhile, there was an increase of 64 percent in identity theft reports involving new checking or savings accounts, while incidents of new mobile phone accounts decreased by 22 percent.
An increase in personal mobile devices over the past two to three years has been incremental, but with both consumers and organizations further pushed to interact online as governments encouraged social distancing and minimizing exposure to limit the spread of COVID-19 during 2020 and 2021, fraudsters and scammers found “a huge opportunity,” according to Christopher Schnieper, director of market planning for fraud and identity at LexisNexis Risk Solutions.
“We have certainly seen a rise in the amount of identity verification abilities that organizations utilize as well as identity verification being a clear concern for various organizations,” Schnieper says.
Fraudsters have become increasingly adept at taking personal identifying information—whether from social media, bot attacks, scripted attacks, and many other sources—to create a synthetic identity. (For more on synthetic identity fraud, read Security Management's May 2021 article, “Frankenstein Fraud.”)
“Fraudsters are extremely adaptable,” Schnieper says, but perhaps the biggest challenge is that “they are relentless, they are pervasive, and they are ongoing.”
Throughout 2021, the Sentinel Network accumulated reports from federal, state, local, and international law enforcement agencies; consumer protection entities, such as the Better Business Bureau, the Social Security Administration Office, and Publishers Clearing House; and reports made directly to the FTC.
The Consumer Sentinel Network stores reports submitted to the FTC and are only available to law enforcement, although aggregated data is available via the FTC website. The reports correspond to incidents of fraud, identity theft, and other instances involving consumer protection—which law enforcement partners can use to help identify trends, iffy business practices, and likely targets, as well as a tool to help enforce the law.