According to data from the Federal Trade Commission, consumers lost more than $8.8 billion to fraud in 2022, $3 billion more than in 2021 and a 166% increase from 2020. The FTC received fraud reports from 2.4 million consumers last year, and the most commonly reported types of fraud were imposter scams, online shopping scams, sweepstake/lottery scams, investment fraud such as pig-butchering scams, and business and job opportunity scams.
History indicates that any time there is a global economic downturn like the one we’ve experienced in the past year, business and consumer fraud will likely increase. "When the economy takes a turn, it boils down to fundamentals. We know that individuals are more likely to commit fraud when normal conditions worsen," said Andi McNeal, Vice President of Education at the Association of Certified Fraud Examiners. But why exactly is that the case?
A worsening economy can exacerbate conditions that experts refer to as the fraud triangle fundamentals—pressure, opportunity, and rationalization. These conditions can increase the likelihood of fraud—even internally among trusted employees. Banks and credit unions should consider teaching their staff how to use the fraud triangle to enhance their ability to shield customers from fraud.