Financial grooming scams lead to high-dollar losses, according to new BBB report
Milwaukee, Wis. – Investment scams, including those involving cryptocurrency, remained the riskiest scam type in 2024, according to a new report from the Better Business Bureau. Romance/friendship scams climbed to No. 3 riskiest for the first time since BBB began publishing the report.
Financial grooming scams are often complex and devastating for victims. It can take weeks or months for the scammers to build trust with their targets. Once that happens, the scammer encourages the person to try investing, often in cryptocurrency. It always starts small, as trust builds over time. While the investment “grows,” the scammer encourages them to invest even more money. But then the person realizes too late, once they’ve invested a significant amount, that the platform is fake, and they can’t get their money back.
More than 80 percent of people who were targeted by investment/cryptocurrency scams, No. 1 riskiest, reported losing money to BBB Scam TrackerSM. It also had the second highest median dollar loss at $5,000. Investment scams take many forms, including pressure to purchase, trade, or store digital assets (cryptocurrency) with fraudulent exchanges.
Employment scam reports remained the No. 2 scam type in 2024, making up about 14% of all reported scams. Employment scams had a $1,500 median dollar loss.
Romance/friendship scams rose to No. 3 riskiest, with the highest median dollar loss of all scam types ($6,099).
Online purchase (shopping) scams dropped further down the list this year, landing at No. 4 riskiest. This year, 30.3% of scams submitted to BBB Scam Tracker were online purchase scams, and 87.5% reported losing money. “Scammers are spending more time building relationships with their targets, and the result is significant losses,” said Melissa Lanning, executive director of the BBB Institute for Marketplace Trust, which produced the 2024 BBB Scam Tracker Risk Report. “If somebody you met online is offering to help you invest your money, it’s a huge red flag, and probably a scam.”
Key findings of the report include:
· Overall reported median dollar loss rose 30% from 2023 to 2024. Overall reported susceptibility (the percentage of reports with a monetary loss) fell 14.6%.
· People ages 65+ reported the highest median dollar loss of all age groups ($160), followed by ages 18-24 ($150).
· Employment scams were No. 1 riskiest for ages 18-34. According to survey research, the flexibility to work from home was the top motivational factor for engaging with the scammer.
· People reported being more likely to lose money when engaging via social media. According to survey research, almost 50% of scams via social media began when the person responded to a social media advertisement or post. About 15% began when the scammer sent them a direct message.
· Credit cards remained the most reported payment method with a monetary loss, followed by bank account debit and online payment system (digital payment app). Reports of people paying scammers with cryptocurrency rose from 3.0% in 2023 to 4.8% in 2024.
· According to our survey research, 29.6% said their mental health was impacted by the scam incident. The top emotions people felt following the scam were anger (60.3%), loss of trust (54.0%), and anxiety/stress/trauma (53.5%).
· Those who engaged with the scammer for more than one day were more likely to report losing money.
The five most impersonated organizations reported to BBB Scam Tracker in 2023:
· Publishers Clearing House
· U.S. Postal Service
· PayPal
· Amazon
· Spectrum
A list of the top 20 is provided in the report.
RESOURCES
For more highlights from the 2024 BBB Scam Tracker Risk Report, visit BBBMarketplaceTrust.org/RiskReport.
Go to BBB.org/ScamTracker to report a scam, learn more about other risky scams on BBB.org/ScamTips and visit our news feed. Scam victims can get resources and advice at BBB.org/ScamSurvivalKit.
ABOUT BBB RISK INDEX & BBB SCAM TRACKER RISK REPORT
To better understand which scam types pose the highest risk, BBB Institute assesses risk based on the BBB Risk Index: Exposure x Susceptibility (or likelihood of loss) x Monetary Loss. These three factors help us understand the impact of scams and who is most vulnerable. Each year, BBB Institute publishes its annual findings in the BBB Scam Tracker Risk Report. The report also includes survey research conducted with those who reported scams to BBB Scam Tracker.
ABOUT BBB SCAM TRACKER
BBB Scam Tracker (BBB.org/ScamTracker) is an online platform that enables consumers and businesses to report attempted and successful acts of fraud. The platform also enables people to search the scam reports to help determine if they are being targeted by a scam.
BBB Scam Tracker was voted the Best Scam Fighting Tool by the Global Anti-Scam Alliance and ScamAdviser.com.
ABOUT THE BBB INSTITUTE FOR MARKETPLACE TRUST
The BBB Institute for Marketplace Trust (BBB Institute) is the educational foundation of the International Association of Better Business Bureaus. Our mission is to educate and protect consumers, promote best practices for businesses, and solve complex marketplace problems. Our consumer educational programs, which include a wide array of resources on fraud prevention and education, are delivered digitally and in person by BBBs serving communities across the United States and Canada. You can find more information about BBB Institute and its programs at BBBMarketplaceTrust.org.
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.
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