How common are money transfer scams in the U.S.?
In 2018, there were more than 1.4 million fraud reports filed with the Consumer Sentinel Network. 25% of those reports involved a loss of money which collectively totaled $1.48 billion. This is up $406 million from the 2017 report.
With money lost to fraud on the rise in the U.S., how can you protect yourself? Here’s the breakdown of what money transfer scams are and how you can protect yourself.
Top 10 types of fraud
How exactly are people being scammed? Here are the top 10 types of fraud in 2018:
| Rank | Category | Incidences Reported | Percentage of Total Scams | Total $ Lost | Median $ Lost |
|---|---|---|---|---|---|
| 1 | Imposter Scams | 535,417 | 18% | $488M | $500 |
| 2 | Telephone and Mobile Services | 164,693 | 5% | $20M | $200 |
| 3 | Shop-at-Home and CatalogSales | 142,929 | 67% | $107M | $155 |
| 4 | Prizes,Sweepstakes and Lotteries | 132,470 | 10% | $118M | $530 |
| 5 | Internet Services | 57,907 | 28% | $36M | $139 |
| 6 | Travel,Vacations and Timeshare Plans | 28,353 | 40% | $68M | $800 |
| 7 | Foreign Money Offers and Counterfeit Check Scams | 27,443 | 34% | $42M | $1,214 |
| 8 | Businessand Job Opportunities | 24,620 | 42% | $116M | $1,304 |
| 9 | Advance Payments for Credit Services | 19,575 | 77% | $23M | $376 |
| 10 | HealthCare | 17,069 | 46% | $4M | $130 |
1. Imposter scams
Imposter scams occur when a scammer pretends to be a trusted person to persuade the victim to give up personal information or money. For example, they might impersonate a friend or relative who needs money, a government agency representative, a computer technician, a representative for a charity, or a romantic interest.
2. Telephone and mobile services
Telephone and mobile services scams involve your phone or phone service. Some examples include:
- An unknown number requesting money for a phone bill. Unsolicited mobile text messages.
- Charges for calls to ‘toll-free’ phone numbers.
- Unauthorized charges.
- Charges for calls you didn’t make.
- And more.
3. Shop-at-home and catalog sales
Fraud involving catalog and shop-at-home sales can involve sellers charging undisclosed costs, not delivering the product on time or at all, or refusing to honor a guarantee.
4. Prizes, sweepstakes, and lotteries
A common fraud technique is to offer “free” prizes that you can be eligible for if you pay a fee. Alternatively, you might be asked to pay into a foreign lottery or sweepstakes.
5. Internet services
Fraud is often reported with internet services, like social networks, internet gaming sites, virtual reality, online payment platforms, website design, or broadband internet.
These scams can come in the form of failure to deliver services, difficult cancellation procedures, undisclosed charges, malware, computer exploits, or misrepresentations of access or speed.
6. Travel, vacations, and timeshare plans
Everyone fantasizes about dreamy vacations — so scammers use that desire to lure you in. Look out for deceptive vacation offers that are very low-cost or seem too good to be true.
Also, be aware of discount travel packages and timeshare offers. Be careful not to pay for a package or timeshare that doesn’t really exist.
7. Foreign money offers and counterfeit check scams
Foreign money offers involve messages that promise the recipient millions of dollars from a foreign country in exchange for bank account details, money, or personal information.
Counterfeit check schemes involve a victim being overpaid with a counterfeit check and then asked to wire back the difference immediately, before the original check bounces.
8. Business and job opportunities
Fraud can also involve business and job opportunities, such as offers to start a new business, multi-level marketing schemes, work-at-home plans, job counseling, overseas work, and more. They may offer you false opportunities which only exist to collect your personal information.
9. Advance payments for credit services
Scam artists often use credit services to lure people in. They may promise a loan or credit card but ask you to pay a fee first.
Other such scams include:
- Worthless insurance programs or credit card loss protection.
- Services offering to recover unclaimed funds.
- Promises to remove negative information from your credit report.
10. Healthcare
Fraud regarding healthcare is also common. Healthcare fraud occurs when business or individuals make deceptive, misleading, or fraudulent claims for health-related products of services. These services might include health spas, vision correction, weight loss products or services, sunscreens, medical discount plans, and more. They may ask you to pay up front to get a benefit, product, or service that you never receive.
While there are many more fraud report categories, these 10 are the most common.
Top payment methods for money transfer scams
You may be wondering, how do scammers get your money? How does it get from your bank or wallet to the scammer’s pocketbook? You can find the full breakdown below:
| Payment Methods | Number of Fraud Reports | Total $ Lost |
|---|---|---|
| Wire Transfer | 101,434 | $423M |
| Credit Cards | 50,413 | $131M |
| Gift/Reload Cards | 41,046 | $78M |
| Bank Account Debit | 33,037 | $78M |
| Internet/Mobile | 14,392 | $40M |
| Cash/ Cash Advance | 10,822 | $109M |
| Check | 9,133 | $75M |
| Money Order | 3,714 | $20M |
| Telephone Bill | 1,106 | $5M |
The most common payment method for fraud is the wire transfer, accounting for a reported total loss amount of $423 million. The next most popular method was credit card payments, which account for $131 million lost.
How do scam artists contact people?
How do scam artists get ahold of you? Here are the different contact methods, along with how frequently each is used:
- Phone – 69%
- Website – 12%
- Email – 10%
- Consumer Initiated Contact – 5%
- Mail – 3%
- Other – 2%
Below, see the number of reports and how much money was lost for each contact method:
| Contact Method | # of Reports | Total $ Lost | Median $ Lost |
|---|---|---|---|
| Phone | 647,310 | $429M | $840 |
| Website | 111,057 | $227M | $321 |
| 92,210 | $173M | $306 | |
| Consumer Initiated Contact | 43,322 | $87M | $216 |
| 30,577 | $55M | $1,000 | |
| Other | 17,069 | $133M | $1,245 |
Accordingly, you should be especially cautious when receiving phone calls that seem fishy. But be wary of other contact methods, too. Scammers may pursue you via websites, email, and snail mail.
Who is filing fraud reports and how much are they losing?
No age group is safe from scammers, but some fall victim more often than others. Check out the data below to see which group tends to lose the most money.
| Age | Share of Reported Fraud | Share of $ Losses | Percentage Reporting $ Loss |
|---|---|---|---|
| 19 and under | 3% | $15M | 46% |
| 20-29 | 12% | $83M | 43% |
| 30-39 | 16% | $138M | 33% |
| 40-49 | 14% | $158M | 29% |
| 50-59 | 16% | $168M | 24% |
| 60-69 | 20% | $184M | 18% |
| 70-79 | 13% | $128M | 15% |
| 80+ | 6% | $79M | 13% |
Americans between the ages of 60 and 69 have the largest share of reported fraud and money losses. But Americans ages 19 and under are the group to most frequently file reports and lose money. Accordingly, we can conclude that younger people lose money to fraud more often, but that older people lose more money when they do fall victim to a scam.
What to do if you fall victim to a money transfer scam
If you fall victim to a money transfer scam, the first thing you should do is call the police. Tell them what happened and how much money you lost.
Next, file a complaint with the FTC. Once you realize you have been scammed, do not communicate with the scammer any further.
How to protect yourself from money transfer scams
Lastly, how can you prevent yourself from being scammed? Well, you are already on the right track by educating yourself about how scammers operate. If you understand the tactics that scammers use, you will be better able to identify them if they contact you.
Additionally, here are a few tips to keep in mind.
- Don’t send money to a stranger under any conditions.
- Listen to your gut. If something seems off, it probably is.
- Don’t take quick action when sending money. Perform internet research and consult with friends or family members first. If you are in contact with someone who pushes you to send them money fast for an urgent deadline, be wary.
- The government, service providers, and financial institutions don’t send, request, or confirm personal information or passwords via email.
- Choose a reputable money transfer provider with the latest security measures in place.
Falling victim to a money transfer scam is never a good feeling. But by taking these steps, you can reduce your chances and keep your savings safe.
Review and compare money transfer services below to find one you can trust.
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.
