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Thursday, June 01, 2023

Australia reports that the majority of fraud complaints involve money mules

 Top Stories

Houston: Man from India pleads guilty to fraud in work with call center in India; they called victims claiming to be federal agents; he cashed out gift cards and picked up packages of cash at mail drops; took in millions
 
Australia reports that the majority of fraud complaints involve money mules
 
UK: Scotland Yard takes down iSpoof, company that faked caller ID’s to help scammers pretending to be banks; owner gets more than 13 years prison  BBC story here
 
DOJ announces fifth major effort against money mules; took more than 4000 actions, including warning letters and prosecutions
 

Spoutible - breathe 



Myth #6:  Last year Americans only lost $8.8 billion in fraud crimes, by Anthony Pratkanis
 
According to the FTC, “consumers reported losing nearly $8.8 billion to fraud in 2022.”   The key word is “reported,” as the amount of stolen money comes from reports to the FTC’s Consumer Sentinel Network.  However, given that it is based on self-reports, it vastly underestimates the damages.

In research I conducted with my colleagues, we asked known fraud victims if they had been the victim of a scam.  Less than half (43%) reported the fraud – a typical result as Deevy and colleagues found in their review.  This makes sense as victims may not yet recognize that they have been defrauded,  have forgotten the incident, or the victim is reluctant to discuss it.

The use of complaints further contributes to underestimating harm from fraud.  Research finds that relatively few consumers file complaints with the government, and, when they do, they tend to complain about the product and not about deceptive practices.

The FTC figure is based on financial losses to the victim and overlooks several important but real secondary effects, including (but not limited to):  psychological harm to victims and their family and friends, hours wasted using 2FA, repairing credit and identity, or trying to determine if something is a scam, unfunded needs of charities, taxpayer dollars spent on fraud prevention and damage mitigation, opportunity costs to entrepreneurs as funding goes to fraudulent entities, lost economic growth as resources are wasted, threats to national security as fraud crimes fund adversaries, cost to businesses for training and prevention, and the deterioration of trust needed, not only for commerce, but for everyday social life.

The FTC Sentinel provides important information, just so we realize that the $8.8 billion is the tip of the iceberg of harms and damages caused by fraud criminals.  The reality is that the iceberg is huge.

All myths collected here
 

New links!
Fraud Studies: Here are links to the studies I’ve written for the Better Business Bureau: puppy fraud, romance fraud; BEC fraud, sweepstakes/lottery fraud,  tech support fraud, romance fraud money mules, crooked movers, government imposters, online vehicle sale scams, rental fraud, gift cards,  free trial offer frauds,  job scams,  online shopping fraud,  fake check fraudand crypto scams
 
Fraud News Around the worldHumor                                                                               FTC and CFPB  Virus Benefit Theft Social mediaBusiness Email compromise fraud IRS and tax fraudRansomwareData Breaches Bitcoin and cryptocurrencyATM SkimmingJamaica and Lottery FraudRomance Fraud and Sextortion
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