Nearly 80 million U.S. consumers lost money to scams in last five years

Nearly 80 million U.S. consumers lost money to scams in last five years, with AI key to tackling fraud & financial crime

The Impact of Financial Scams on Consumers’ Finances and Banking Habits

The Alarming Rise of Financial Scams

New research reveals that nearly 30% of U.S. consumers have fallen victim to financial scams since 2020. Identity theft dominates as the most common type of scam, while romance scams present the highest financial losses. This alarming trend underscores the critical need for enhanced consumer protections from financial institutions.

Staggering Financial Losses Reported – Nearly 80 million U.S. consumers lost money to scams in last five years

The study conducted by Featurespace and PYMNTS Intelligence indicates that about 80 million consumers lost money to scams over the past five years. Victims reported an average loss of 5, with a significant portion suffering losses exceeding ,000. Specifically, 13% of victims experienced losses over this threshold, highlighting the severe impact of these scams.

Common Types of Scams Targeting Consumers

Identity theft affected 24% of scam victims, making it the most prevalent scam type. Other scams included gift card scams (19%), fraudulent eCommerce schemes (16%), and debt collection scams (15%). The report emphasizes that romance scams contribute the most significant financial impact, costing victims nearly ,000 on average. Investment scams follow closely behind, with average losses of ,104.

Consumer Recovery Efforts and Bank Responsiveness

Despite these losses, many consumers successfully recovered some funds. Approximately 69% of consumers who reported scams to their banks recouped a portion of their funds. Additionally, 74% of those who filed a claim with their credit card issuer managed to recover some losses. However, over half of scam victims (54%) considered switching banks after their experiences, with 30% actually following through on this decision.

Martina King, CEO of Featurespace, commented on the findings. “With millions of U.S. consumers hit with scams, financial institutions need to enhance protections against fraud and financial crime. Tackling scams requires a proactive approach focused on prevention rather than reaction.”

Importance of Advanced Fraud Detection Technologies

The research highlights that 59% of scam victims believe advanced fraud detection and monitoring technologies are essential in combating these threats. Implementing real-time security measures can significantly protect consumers, ensuring fraud prevention does not hinder genuine transactions.

Feature space, a leader in fraud prevention technology, assists banks and financial institutions in safeguarding customer transactions. By utilizing adaptive behavioral data and artificial intelligence, Featurespace enables financial institutions to stop fraudulent activities quickly and efficiently. The organization has gained the trust of over 80 direct customers and 100,000 businesses worldwide.

Nearly 80 million U.S. consumers lost money to scams in last five years

For more information on the impact of financial scams, visit [Featurespace](https://www.featurespace.com/clients/impact-of-financial-scams-on-consumers-us).

Kendra Rogers
Featurespace
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