Identity Fraud and Scams Cost Americans Billions in 2024
American adults lost a staggering $47 billion to identity fraud and scams in 2024, according to a report produced by Javelin Strategy & Research, cosponsored by AARP. This represents a significant increase of $4 billion compared to 2023.
The report, based on a survey of over 5,000 U.S. adults, breaks down these losses into two main categories:
- Traditional identity fraud: $27 billion, affecting 18 million people. This involves criminals obtaining and fraudulently using personal information like Social Security numbers or bank account details.
- Scams: $20 billion, stemming from deceptive psychological manipulation of consumers to steal money or sensitive information; these may lead to identity fraud.
Why the Rise in Losses?
A key driver behind the escalating losses is that “technological innovation has outpaced security,” creating exploitable gaps for criminals, according to the report. The increasing number of data breaches and the inadequacy of U.S. privacy laws also contribute. Organizations often share or sell consumer data without explicit consent.
Jennifer Pitt, Javelin’s senior fraud analyst and the report’s author, highlights the value of information itself, saying, “Information is more of a hot commodity than just money because information can be used. You can sell information to get money or use it to open new fraudulent accounts or take over existing accounts.”
Account Takeovers and New-Account Fraud on the Rise
The report shows a concerning trend of account takeovers and new-account fraud. In 2024, account takeover fraud resulted in $15.6 billion in losses, up from $12.7 billion in 2023. New-account fraud also increased, reaching $6.2 billion, compared to $5.3 billion the previous year.
Common Tactics Used by Fraudsters
One method used by criminals is “identity fraud scams,” where consumers are influenced to reveal sensitive data through misrepresentation. These often take the form of phishing attempts, where scammers send convincing emails or messages to steal personal information or install malware.
Texts are now a favorite tool of criminals. In 2024, 54% of survey respondents who experienced identity fraud were initially contacted via text, up from 49% in 2023.
Older Adults Are Often Targeted
Older adults tend to lose more money to these crimes than their younger counterparts. According to the Federal Trade Commission, in 2024, those in their 70s reported a median loss of $1,000, compared to a median of roughly $417 reported by those in their 20s.
Data Breaches Expose Personal Information
Unauthorized access to personal information through large-scale data breaches is also a severe threat. These breaches often involve cybercriminals hacking into company systems to steal consumer data. Last year saw 3,158 data breaches, a similar number to 2023, but significantly higher than in 2022. These breaches have exposed the personal information of millions.
Protecting Yourself from Identity Fraud
The report offers several essential steps to safeguard against identity fraud:
- Be aware of your information sharing: Scrutinize requests for personal information. Always ask why the information is needed and how it will be protected.
- Freeze Your Credit: This prevents criminals from opening new accounts in your name.
- Use Strong, Unique Passwords: Employ a password manager for effective security.
- Implement Multifactor Identification: Add extra security layers to financial accounts.
- Avoid Unprotected Public Wi-Fi: Use a VPN when using public networks.
- Use Passcodes: Secure laptops, tablets, and smartphones.
Resources for Reporting and Assistance
- Report fraud to local law enforcement and the FBI’s Internet Crime Complaint Center (IC3.gov).
- Contact the AARP Fraud Watch Network Helpline at 877-908-3360 for support and guidance.
