According to new data released by the Federal Trade Commission, consumers lost $5.7 billion in 2024 as a result of investment scams, which is more than any other form of fraud and up 24% from 2023.
Key Points
- The Federal Trade Commission reports that Americans lost $5.7 billion to investment scams in 2024. On average, the average victim lost over $9,000.
- “Pig-butchering scams” are a prevalent type of investment fraud in which con artists establish a rapport with their victims, lure them into making an investment, and then defraud them.
- People can prevent being tricked by recognizing these three typical indicators of fraud.
According to new data from the Federal Trade Commission, consumers lost $5.7 billion in investment scams in 2024, more than any other type of fraud and a 24% increase over 2023.
According to the FTC, investment scams typically involve claims that a consumer will profit handsomely from investing in a hot new moneymaking scheme.
The majority of people—79%—who reported an investment scam to the FTC lost money, with the average victim losing more than $9,000, according to the agency.
The actual extent of investment fraud is probably much greater when individuals who choose not to come forward are taken into account, as FTC data is based on consumer reports of fraud.
According to John Breyault, vice president of public policy, telecommunications, and fraud for the National Consumers League, “these scams are becoming a really huge problem for consumers.”
Investment fraud involves cryptocurrencies and artificial intelligence.
“Pig-butchering” scams, which refer to the practice of fattening a pig before slaughter, are common types of investment fraud.
Experts say that fraudsters frequently contact victims unexpectedly—via text, social media, or a dating app—to try to build relationships and gain trust before pitching investment opportunities that allegedly yield high returns, often in virtual assets such as cryptocurrency.
Though the investments appear legitimate, criminals eventually disappear with the customers’ money.
It has become easier to commit these and other related frauds as artificial intelligence has made criminals more convincing, such as through the use of deepfakes, according to Breyault. Deepfakes are manipulated videos, images, or sounds in which people say and do things that appear real but are not.
Scam operations centers have also been established by organized crime networks throughout Southeast Asia, including Cambodia, Laos, and Myanmar, according to the Council of Foreign Relations. Thousands of people are employed at the centers, many of whom have been illegally trafficked and forced to carry out these global investment schemes, according to the report.
According to a recent study by researchers at the University of Texas at Austin, criminal networks frequently use cryptocurrency to facilitate pig-butchering frauds because it allows them to “move substantial funds easily, cheaply, and without much fear of detection.”
How to Reduce Investment Fraud Risk
While there is no “silver bullet” to protect against fraud, Breyault says there are steps consumers can take to lower their risk. He stated that many frauds share three characteristics:
- urgency. Breyault suggested staying away from pitches that seem urgent. Con artists “want you to act before you have time to think… Threats of arrest, lawsuit, loss of your business or driver’s license, and deportation are all possible,” warns the Federal Trade Commission. They may claim that corruption is on the verge of destroying your PC.
- unusual mode of payment. According to Breyault, scammers frequently ask victims to make payments in peculiar or particular ways. “They frequently insist that you can only pay using cryptocurrency, wiring money through a company like MoneyGram or Western Union, using a payment app, or putting money on a gift card and then giving them the numbers on the back,” the FTC stated.
- separation. According to Breyault, scammers will attempt to isolate victims in order to prevent them from telling others about the situation that could warn them that it is a scam. They may say things like, “No one will believe you if you tell them about this,’ or ‘the cops will come after you if you report it,’ or ‘your loved ones will be in danger,'” Breyault said.
By :- Next Tech Plus
