In 2024, the Better Business Bureau (BBB) observed a notable increase in financial grooming scams, resulting in substantial financial losses for consumers. The BBB’s Scam Tracker Risk Report identified investment scams, particularly those involving cryptocurrency, as the most perilous, with over 80% of targeted individuals reporting monetary losses. The median loss for these scams was $5,000.
Financial grooming involves fraudsters establishing trust over extended periods before exploiting victims financially. These scams often commence with small investments, which appear to grow, prompting victims to invest more. Ultimately, victims discover that the investment platforms are fraudulent, resulting in significant losses.
Romance and friendship scams also escalated in 2024, becoming the third most hazardous scam type. These scams had the highest median loss at $6,099 per victim. Similar to investment scams, perpetrators build relationships over time before requesting financial assistance or proposing dubious investment opportunities.
Employment scams remained prevalent, accounting for approximately 14% of all reported scams, with a median loss of $1,500. These scams often entice younger adults with promises of flexible, work-from-home opportunities.
The report also highlighted that individuals aged 65 and older reported the highest median losses at $160, closely followed by those aged 18 to 24 with $150. Engagement through social media played a significant role in these scams, with nearly 50% initiating from responses to advertisements or posts, and about 15% beginning with direct messages from scammers.
Credit cards were the most reported payment method for monetary losses, followed by bank account debits and online payment systems. Notably, cryptocurrency payments rose from 3.0% in 2023 to 4.8% in 2024.
The emotional impact on victims was considerable, with nearly 30% reporting effects on their mental health, including feelings of anger, loss of trust, and anxiety. Additionally, prolonged engagement with scammers increased the likelihood of financial loss.
The five most impersonated organizations reported to BBB Scam Tracker in 2024 were Publishers Clearing House, U.S. Postal Service, PayPal, Amazon, and Spectrum.
To combat these scams, the BBB encourages consumers to verify the legitimacy of unsolicited offers, be cautious of sharing personal information, and report suspicious activities to the BBB Scam Tracker.
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