New Jersey Lost $98.7 Million To Online Scams

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New Jersey Lost $98.7 Million To Online Scams
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A new study found New Jersey is the No. 12 most-scammed state losing $98,727,053 to online scams.

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Americans Lose A Record $4.2 Billion To Online Scams

A record $4.2 billion was lost by Americans to online scams in 2020, with victims often losing their life savings and taking their own lives. It accounts for more than half of the total loss worth $7.6 billion lost over the previous three years from 2017-2019. The crisis is worsening, as we become more reliant on digital technology scammers have no avenues to steal from people every single day.

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SocialCatfish.com released its inaugural study on the State of Internet Scams 2021. It includes data from the Internet Crime Complaint Center (IC3), Federal Trade Commission (FTC), and the Federal Bureau of Investigation (FBI).

The study offers a comprehensive look at the top scams taking place right now in an effort to generate awareness to help people avoid becoming victims.  It also investigates which are the most-scammed states, most-scammed apps and examines reasons why law enforcement is unable to halt that disturbing trend.

Online Scams

Investment Scams

Based on government data, business owners, lonely singles and desperate people duped into fake investments lost the most money as fraudsters grow more sophisticated by the day.  Followed by online shoppers and victims of identity theft.

The three main methods scammers are using includes phishing emails, VoIP phone calls and fake dating app and social media profiles.

Phishing is when scammers send emails that contain links to fake websites and pretend to be trusted businesses. Victims click on the link their personal and financial information is stolen.

VoIP phone numbers allow scammers can make a call and have it appear as though it is from a local bank or trusted institution.  They ask for personal information and then can drain your bank account.

Catfishing

Catfishing

The fake profiles on dating apps and social media often have stolen pictures of a good-looking influencer. They often use this to make lonely victims feel a connection and fall in love and that is how romance scams take place.

The record $4.2 billion stolen in 2020 was no doubt aided by the COVID-19 pandemic and the entire globe’s increased reliance on digital communications both professionally and personally.  Sadly, those figures are likely not the full story.

A poll of more than 700 members of the of the online verification company’s Facebook group Social Catfish (SCF) Seekers -- a community of 4,500 previous scam victims – found 73% were too ashamed to even file a report.  This is particularly true for victims of romance scams, many of whom are highly educated and cannot believe they got hoodwinked and only years later can talk about it.

Another surprising key finding is that people under 20 are being targeted now. While it is true that seniors are typically targeted, it is surprising to note that Gen Z – a generation that has known nothing but technology growing up, has experienced the fastest growth rate of victims since 2017. In 2017, there were 9,053 victims compared to 23,186 victims in 2020, showing a surge of 52% in the number of victims.

If there was an award for the newest dangerous scam on the block, it would be spoofing which stole $216,513,728 from victims in 2020 against the loss of $0 in 2017. Spoofing allows scammers to make their phone number appear as if it belongs to your bank, credit card company, or any other company with whom you do business transactions.

Catfishing

Most Scammed On Platforms

Where do most of these scams happen? According to the poll, Facebook is the No. 1 platform where scams occur, followed by Google Hangouts, Instagram, WhatsApp and Plenty of Fish.

California is the No. 1 most-scammed state with the highest monetary loss of $621,452,320 with 69,541 victims (on average, $8,936 was lost per person). The second state with the largest amount of money lost was New York losing $415,812,917 with 34,505 victims ($12,051 was the average loss per person). Texas, Florida, and Ohio round out the top five states.

The list of states experiencing the lowest amount of money lost was led by South Dakota at $3,208,241 with 777 victims ($4,129 was lost per person on average). The second state to lose the lowest amount of money was Vermont at $4,175,799, with 856 victims ($4,878 was lost per person on average).  West Virginia, New Hampshire, and Wyoming round out the bottom five states.

A major impediment to stopping online scams is that scammers generally originate from outside the U.S. Thus, when a victim comes forward, law enforcement does not have the jurisdiction authority to pursue the scammer. By speaking with the FBI and law enforcement, efforts are being made to work with countries around the world to combat this issue.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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