Americans lost a record $2.7 billion to investment scams in 2022
With the appearance of new promising technologies, like NFTs and blockchain, many unique investment opportunities have sprung up in the last couple of years. Unfortunately, a significant portion of those companies do not have the investor’s best interests in mind.
The rapid evolution of the world wide web and the commercial world in general outpaced security measures that were supposed to protect individuals from getting abused in these types of deals.
A study carried out by Atlas VPN reveals that issues pertaining to online fraud are most severe in the business investment category.
The most recent figures from the Federal Trade Commission show that US citizens lost a whopping $2.66 billion to various types of investment scams in Q1-Q3 2022, representing a 50% increase over $1.77 billion lost in 2021.
The data above deciphers into the following statement: investment fraud in the US skyrocketed by 28 times in the last 5 years.
Since 2018, investment fraud has been growing by, on average, 149% per year.
The increasing severity of the issue is also seen in the number of complaints submitted to the FTC.
In the first three-quarters of 2022, the FTC received nearly 80 thousand investment fraud reports, out of which 74% indicated a financial loss.
In contrast, in 2018, FTC received less than 15 thousand complaints, with 54% of them noting damages.
Social media and crypto payments
Most investment fraud victims transfer the funds in the form of cryptocurrencies, which are notoriously hard to track down and get back because the whole system is based on anonymity and decentralization.
In addition, threat actors can employ various services, like cryptocurrency tumblers, to cover their tracks to the point of virtually becoming untraceable.
In these cases, privacy granted by the blockchain system is working against the victims and in favor of criminals.
Another notable finding is that, most of the time, fraudsters get in touch with potential victims through various social media platforms.
I’ll-meaning individuals go to extreme lengths to create trustable social personas because the potential financial benefit from even a single scam is significant, as the median loss per investment scam in 2022 stands at $4,500. The median loss in 2021 was significantly lower, at $3,000.
The overview of the investment-fraud landscape reveals that these types of scams are not going to stop anytime soon. Quite the opposite seems to be the case.
Next year, we can expect total losses to investment scams in the US to hit over $3.5 billion, with median damage of $6,000.