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An Iceberg of Unseen Crime: Urgent Action Needed on Consumer Fraud ​

With scams skyrocketing, a coordinated effort is needed by law enforcement, regulators and policy makers

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Getty Images/AARP


Scam activity in the U.S. is at an all-time high, and the need for a meaningful, broad-based response has never been more urgent.

Much of the problem lurks below the surface, with frauds going unreported and consumers not adequately protected. Yet by one estimate, identity theft and related crimes skyrocketed to $56 billion in 2020, more than triple the amount from the prior year. 

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While cost estimates vary widely, the pandemic has given us reason to believe that reported losses are just the tip of the iceberg.

COVID-19 continues to stir fear and anxieties that scammers capitalize on. Among the factors: 

  • News headlines about COVID testing, treatments and government benefits have prompted a wave of efforts to deceive consumers, such as false promises to move individuals to the front of the line – for a fee.
  • Increased stress and social isolation have made people more vulnerable to con artists. When anxiety rises, the ability to think rationally declines. Criminals thrive in such an environment. 
  • The increased embrace of computers for remote work, retail purchases and social connections has created a vast new population to target for online fraud. Such scams jumped 25 percent in the first part of 2021, according to the TransUnion credit bureau.

Those factors are just highlights of a larger, grim picture. A recent AARP survey found that nine in 10 Americans (229 million people) encountered a fraud attempt in the past year – and that one in six (33 million people) lost money as a result.  A separate poll found that almost 60 million Americans lost money to phone scams last year.

spinner image a a r p infographic titled at a loss showing that reported scams are only the tip of the iceberg in fraud costs  that are actually happening

A multigenerational issue

All generations face risk, including children, who may be targeted for identity theft. Younger adults report losing money to scams more frequently than their seniors. But we also know that when older adults are exploited, the impact can be especially severe. Con artists typically extract more money from their older targets. And these victims have reached a time of life when they are least able to recover financially.

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I’m thinking of people like the woman in her 80s who told AARP she lost $13,000 to a tech-support scam, and the widow who gave up $39,000 in a romance fraud that drained all her savings. (To be sure, the losses can go much higher, such as the man who informed us he lost $465,000 in a cryptocurrency scam.)

The personal impact

Egregious as these numbers are, the personal price cannot be measured in dollars alone. Nearly 2 in 3 fraud victims report at least one serious health or emotional impact. Victims suffer a sense of humiliation. The loss of money can strain family relationships.

And how can we put a price tag on the sense of shame and guilt, or the loss of personal dignity, that may go with being victimized?

It’s no surprise that fraud often goes unreported. 

Victims may not tell family members, fearing questions about their ability to manage their financial affairs. Police often tell those affected that their experience is a civil matter and not a crime (they are wrong) so that, even when victims try to report, they may be dismissed. 

Even if they want to report the scam, they may not know where to turn. And sometimes, individuals don’t even realize they have experienced a scam.

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Tackling consumer fraud head on

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Nancy LeaMond
Jared Soares

Consumer education is an important part of the answer, and the AARP Fraud Watch Network is leading the way in this space. In recent weeks, our network has cautioned the public about porch pirates who steal items outside your front door, online shopping scams, gift-card frauds and an array of COVID-related swindles, including fake offers to help people get funeral benefits from the government. Members have expressed a desire for helpful information, so we delivered, reaching over 1.4 million people last year, not to mention the countless others we helped to educate over many webinars and tele-town halls. And our Fraud Watch Network Helpline, a free resource connecting members and nonmembers to trained fraud specialists, assisted more than 130,000 people. 

But society can’t educate its way out of this travesty. What’s really needed is a full-frontal attack on consumer fraud in its many forms. That will require a much more determined effort from law enforcement, regulators and policy makers. 

Police, federal investigators and prosecutors need more incentive to go after these financial crimes. Policy makers need to pay more attention to all the costs of fraud, not only to people’s bank accounts but also to their peace of mind. 

Disturbing as the trends have been, some recent developments are encouraging. Congress and the Federal Communications Commission are now going after illegal robocalls. The Department of Justice’s Transnational Elder Fraud Strike Force is targeting foreign-based fraud schemes. Every U.S. attorney’s office now has an elder justice coordinator. 

These steps, while welcome, are not nearly enough to protect the public. Consumer fraud is a complex and growing problem. We still do not know its full extent. The status quo leaves millions vulnerable as scammers continue to refine their techniques and become even more dangerous. 

The message should be clear to our leaders: It’s time to invest in a coordinated, full-scale approach to combat this scourge. We should be doing much more to protect innocent Americans.

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