On the upside, the Bureau recovered more than US$300 million in funds lost to online scams last year
In 2019, the United States’ Federal Bureau of Investigation (FBI) received more than 467,000 cybercrime complaints that caused an estimated US$3.5 billion in losses, according to the Bureau’s annual 2019 Internet Crime Report (IC3). Last year saw both the highest number of complaints and the highest dollar losses on record; in 2015, for example, annual losses totaled ‘only’ US$1.1 billion.
Business Email Compromise (BEC) fraud remains the costliest type of fraud on the list, accounting for more than half of the total losses and costing businesses almost US$1.8 billion. These schemes are constantly evolving, too. Back in 2013, scammers would typically hack or spoof the email account of a CEO or CFO to request a fraudulent transfer of funds to accounts under their control. Over the years the tactics have evolved to also include compromising personal or vendor emails as well as spoofing lawyers’ email accounts.
Payroll diversion emerged as a popular form of BEC fraud last year. Scammers target HR and payroll departments by acting as employees who want to update their direct deposit information for the current payment period. The updated information then usually directs the funds to a pre-paid card account.
Elder fraud is also an increasingly pressing issue. With 68,013 victims, this type of fraud had the highest number of victims; under-twenties claimed “just” 10,724 victims. The number of victims may not reflect the true extent of the problem since providing the age range is voluntary.
Seniors are often the targets of romance, tech support, government impersonation and lottery scams. Victims of these schemes were defrauded out of over US$835 million. Romance and confidence fraud alone account for almost half a billion dollars in losses, with the FBI estimating that up to 30% of romance fraud victims had been used as money mules.
RELATED READING: Cybersecurity Barometer: Cybercrime’s impact on privacy and security
Tech support fraud remains a growing problem as scammers attempt to defraud their victims by contacting them under the pretense of resolving a non-existing technical issue with their software licenses or bank accounts.
Recently, however, scammers have started impersonating representatives of well-known travel companies, financial institutions or virtual currency exchanges. Tech support fraud has claimed approximately US$54 million in losses in 2019, a 40% increase compared to the previous year, with most victims falling into the over-60 age category.
Meanwhile, losses emanating from ransomware reached around US$9 billion, almost triple the losses incurred in 2018. The number of reported victims also rose to about 2,000 compared to 1,500 from 2018. While phishing was still the most widespread problem claiming 114,072 victims last year, non-payment and non-delivery scams came in second with about half the number of victims being 61,832.
Not to end on a bleak note, the FBI’s Recovery Asset Team (RAT) helped retrieve almost US$305 million lost in scams, giving it a 79% return rate of reported losses.