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Liza Ayres
Contributing Writer

While the U.S. Federal Trade Commission (FTC) exists to put forth pertinent regulations and publish findings, some of its best resources for new marketplace discoveries are consumers themselves. Through consumer reporting, the FTC can identify trends and questionable business practices from the perspectives of those who directly experience them. Consumer reports are stored in the Consumer Sentinel Network (Sentinel). Sentinel is a secure online database available to law enforcement, allowing the FTC’s law enforcement partners to use the information from the database to better enforce anti-fraud laws.

In February of this year, the FTC released their Consumer Sentinel Network 2020 Data Book, which aggregated more than 4.7 million consumer reports made in 2020 and sorted them into 29 top categories. The data is based on unverified reports made to the FTC’s call center or online, as well as reports filed with other federal, state, local and international law enforcement agencies, as well as organizations like the Better Business Bureau and Publishers Clearing House. The Data Book provides illuminating information on how a year defined by the pandemic influenced fraud methods and the trends anti-fraud professionals should expect in the years to come.

National statistics

In 2020, the highest number ever of reports were made to the FTC, with a significant increase from 2019’s 3.24 million reports. Additionally, consumers made the highest number of fraud and identity theft reports in 2020, increasing from 820,072 fraud reports in 2010 to 2,184,531 in 2020, and 251,074 identity theft reports in 2010 compared to 1,387,615 in 2020.

Fraud totaled 46% of consumer reports in 2020, with identity theft accounting for 29% and other illegal activity comprising 25%. People filed more reports about identity theft, in all its various forms, than any other type of complaint. Imposter scams followed in second place, with online shopping rounding out the top three.

Of the nearly 2.2 million fraud reports, 34%, or almost 800,000, indicated money was lost, equating to more than $3.3 billion lost to fraud — an increase of nearly $1.5 billion over 2019. The median loss for all fraud reports was $311. Almost 40,000 reports described a loss of more than $10,000.

How are fraudsters stealing so much money? 17% of the fraud reports detailed the payment method involved in the scam. Credit cards were the most popular form of payment method, followed by debit cards, then payment apps or services, then wire transfers. However, bank transfers topped the list of total money lost by a certain method, with $314 million lost, followed by wire transfers at $311 million lost. Credit cards ranked third, accounting for $149 million lost.

A contact method was reported in 57% of the nearly 2.2 million fraud reports. Phone calls were the primary method for initiating fraud, at 31%, followed by 27% by text and 15% by email. Phone calls accounted for $436 million lost, followed by websites or apps, which led to $316 million lost.

When age was specified, younger people reported losing money to fraud more often than older people. Those aged 20-29 reported losing money in 44% of reports, while 20% of reports by people aged 70-79 noted monetary loss to fraud. Furthermore, people 80 and older reported it in only 18% of their cases. Interestingly, however, people aged 70 and above claimed much higher median losses than any other age group, averaging $635 in losses for ages 70-79 and $1,300 for ages 80+, but $324 for ages 20-29.

State statistics

Nevada, Delaware, Florida, Maryland and Georgia had the highest per capita rates of reported fraud in 2020. California had the highest number of fraud reports at 318,698, but its population determines its ranking at spot 20 of reports per capita. North Dakota had only 3,504 reports, the lowest number, and sits at spot 49 of per capita reports, just ahead of South Dakota. California lost more than $400 million to fraud in 2020, the highest amount of any state. Its median loss was $407. While Alaska as a state lost a little less than $6 million, it recorded the highest median loss of $500.

For reported identify theft, the top states were Kansas, Rhode Island, Illinois, Nevada and Washington. Kansas averaged 1,483 reports per 100,000 people. The lowest ranked state, South Dakota, averaged 72 reports per 100,000 people.

Identity theft was the most common report category among all states.

Identity theft

Identity theft is divided into various categories:

Government documents or benefits fraud
Credit card fraud
Loan or lease fraud
Employment or tax-related fraud
Phone or utilities fraud
Bank fraud
Other identity theft methods

Credit card fraud had consistently accounted for the most reports since 2016, but government documents or benefits fraud surpassed it in 2020. In the category of government benefits applied for and received, identity theft reports increased 2920%, as compared to 2019. This form of fraud is likely to remain prominent as aid packages continue.

Identity theft reports were greatest for people aged 30-49, with employment or tax-related fraud, as well as government documents and benefits fraud, topping the list.

Overview

The effects of COVID-19 are glaringly evident in the Data Book. As fraud examiners know, scammers take advantage of times of crisis and uncertainty. The Data Book proves the extreme increase in pandemic-related fraud and shows anti-fraud professionals that identity theft and government benefit scams will continue to be popular methods.

The Federal Trade Commission provides dashboards on their website to further explore these tendencies. One illuminating dashboard explores consumer reports that contain terms such as COVID, stimulus and N95. Tellingly, fraud began to spike at the beginning of March 2020 when pandemic lockdowns began across the U.S.

Supplemental dashboards investigate imposter scam data, FTC refunds to consumers and fraud among branches of the military, among others. The FTC’s dashboards, coupled with the Consumer Sentinel Network Data Book, will prove to be highly beneficial for anti-fraud professionals as investigations from 2020 continue.

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