In a new Federal Trade Commission report on fraud, identity theft and related consumer protection topics released, Millennials reported losing money to financial scams more than any other age group.
Here's what you need to know and what to do about it.
The Statistics: Overview
Here are some of the key statistics at a glance:
Total Reports: 2.7 million
Total Fraud Reports: 1.1 million
Total Fraud Losses: $905 million
Median Dollar Loss From Fraud: $429
While overall fraud reports declined slightly since 2016, total dollar losses from fraud increased $63 million year-over-year to $905 million.
The Statistics: Millennials vs. Seniors
Forty percent of those ages 20-29 who made a report said they lost money through fraud. By contrast, only 18% of consumers age 70 or older reported a fraud and lost money.
However, on a median dollar basis, younger Americans experienced a lower amount of financial loss. While those ages 20-29 experienced a median loss of $400, those at least 70-years-old experienced a median loss more than double - $1,029.
While overall reports have declined since reaching a peak of over 3 million in 2015, total reports are nearly three times as high as they were in 2006.
Top 3 Reported Categories
1. Debt Collection
2. Identity Theft
3. Imposter Scams
Of the nearly 2.7 million reports, the breakdown included:
1. Fraud: 1.1 million people (42.5% of all reports)
There were almost 350,000 imposter scams, with one in five experiencing a dollar loss. Total losses from imposter scams in 2017 totaled $328 million.
The most common types of imposter scams included trying to obtain a victim's money through one of the following: scammers pretending to represent the government, a relative in trouble, a well-known business or a company's technical support.
The top categories of fraud included imposter scams, telephone and mobile services, sweepstakes and lotteries, shop-at-home and catalog sales and counterfeit check scams, among others.
The median losses were the highest in three categories: (1) travel, vacation and timeshares ($1,710); (2) mortgage foreclosure and debt management ($1,200) and (3) business and job opportunities ($1,063).
The most popular method of contact for financial scams is by telephone (70%). Of those contacted, 9% reported losing money to an imposter, with a median loss of $720, or $290 million overall. The most popular payment method was by wire transfer (112,229 reports and $333 million).
The states with the highest fraud per capita were Florida, Georgia, Nevada, Delaware and Michigan.
2. Identity Theft: 371,000 people (13.9%)
Credit card fraud was the top form of identity theft, with scammers either illicitly using a victim's credit card information to make a false charge or to open a new credit card account.
Other top categories included employment or tax-related fraud, phone or utilities fraud and bank fraud.
The states with the highest identity theft per capita were Michigan, Florida, California, Maryland and Nevada.
3. Other: 1.2 million people (43.6%)
What Steps Can You Take To Protect Yourself?
Two popular scams included imposters impersonating representatives from the IRS or a charity.
1. Hang up the phone. For example, if you receive a call from someone claiming that you owe income taxes to the IRS, you should know that the IRS will always contact you first by mail before calling you.
Second, the IRS will never demand immediate payment.
Third, the IRS will never request a specific form of payment such as a wire transfer.
2. Don't pay immediately. If you receive a phone call from someone claiming to work for a charity, and you feel that you are being pressured to donate, don't give money on the spot.
Verify the exact name of the charity.
Many fake charities use similar names to a reputable charity or use buzz words such as "cancer" or "disaster relief."
You can also call 1-877-FTC-HELP (1-877-382-4357).
You can also contact these other resources:
IRS Scams: You can report any IRS scam to the Treasury Inspector General for Tax Administration or call 1-800-366-4484.
Charities: Contact the National Association of State Charity Officials, which is an association of state offices charged with oversight of charitable organizations and charitable solicitation in the United States.
You can also contact your state's attorney general or the Better Business Bureau to verify the charity's identity.