In the first year of the coronavirus pandemic, scammers were busier than ever. Frauds directed at Americans, as well as citizens of seven other developed nations, rose significantly.
A report compiled by Accenture shows that fraud increased at an estimated 6.8% rate annually during the years 2013 to 2019. However, it surged to a 22.5% annual growth rate from 2020 to 2021. The report’s authors note that the increase coincided with the large shift of workers and consumers to digital channels and greater use of technology during the pandemic.
“Our analysis revealed the cost of consumer fraud during the pandemic exceeded the level seen over six years prior to 2020,” said James Slessor, Accenture’s global lead for public safety. “With this type of crime growing so intensely, we urge public safety leaders and their partners to evolve and intensify efforts to combat the trend and reduce its impact on consumers, businesses, and national economies.”
The report notes that it’s possible the number of frauds will return to pre-pandemic levels in the years ahead, but the researchers say there is a better chance that the rate will remain at higher levels since criminals have found it to be so lucrative.
Billions of dollars lost last year
In a recent report, the Federal Trade Commission (FTC) said U.S. consumers lost more than $5.8 billion to fraud in 2021, an increase of more than 70% over the previous year. The FTC received fraud reports from more than 2.8 million consumers last year, with the most commonly reported category once again being imposter scams, followed by online shopping scams.
Prizes, sweepstakes, and lotteries; internet services; and business and job opportunities rounded out the top five fraud categories.
“In light of the fast rise and already massive extent of consumer fraud, we are calling for more of an intelligence-led, proactive and collaborative path forward,” Slessor said. “As consumer fraud becomes more intrusive, sophisticated and spans across borders, our call is to elevate efforts with a whole-ecosystem approach in which governments and many partners work together to innovate and deter fraud.”
Consumers can protect themselves by being aware of and watching for certain “red flags” that are present in nearly every fraud. Those include:
Sense of urgency: The scammer tells the victim they must act immediately to avoid a severe consequence. This is used most often in imposter scams when the fraudster pretends to be someone in authority.
Paying with gift cards: The scammer instructs the victim to pay by using gift cards. That’s because once the victim gives the card number to the scammer, the money is gone and can’t be traced. Anytime anyone asks you to pay with gift cards instead of a credit card, it’s a scam!
No haggling: The scammer agrees to purchase what you are selling for your asking price, sight unseen.
Giving personal information: The scammer tells the victim they have won a sweepstakes they didn’t enter. They just need the victim’s bank account information so they can transfer the money. The scam may come in the form of a phishing email that asks for login credentials for various accounts.