Americans are bilked out of $119 billion annually, the Consumer Federation of America estimated in a new study published Thursday.
The amount is based on an FBI report of $16.6 billion in 2024 losses due to internet scams, and then was increased to take account of Bureau of Justice Statistics percentages for estimated losses that are unreported.
California, Texas, New York and Florida were the states hardest hit by the online fraud, according to the FBI’s Internet Crime Complaint Center data, but less heavily populated states also incurred significant losses. Nevada and Wyoming suffered high per capita losses and some states, such as Michigan and South Carolina, seemed to be targeted for scams for various reasons, according to the consumer organization’s report.
“The devastating scale of losses represents a crisis that demands swift and unflinching attention, as people increasingly feel unsafe online,” CFA Director of AI and Privacy Ben Winters said in a press release accompanying the report. “These statistics show that action across the economy - increasing platform liability, shutting down data brokers, improving reporting mechanisms, regulating generative AI, and beefing up consumer protection enforcement resources – are not only exciting ideas but mandates for a safe future.”
The federation’s report pointed to social media outlets, specifically Meta’s Facebook, Instagram and Whatsapp, as tools used by scammers to trick consumers, especially the elderly, into handing over their money. The company didn’t immediately respond to a request for comment.
However, in a statement Wednesday, Meta described how it’s introducing new tools on Facebook and Whatsapp to help fight fraud, partnering with law enforcement to stop criminals and taking down ads on its social media sites that have violated its policies.
The Consumer Federation of America used its report as a call to action for policy-makers and regulators.
Some of them heralded the report as a basis to support initiatives they’ve already introduced, including a bipartisan bill introduced last month by Sens. Ruben Gallego (D-AZ) and Bernie Moreno (R-OH). Their proposed Safeguarding Consumers from Advertising Misconduct Act would push online sites to increase fraud prevention and hold them accountable when it happens.
“Social media has become a prime hunting ground for scammers to swindle Americans out of nearly $119 billion a year. This report makes it clear that accountability is long overdue,” Gallego said in the federation release. “If companies are making money by pushing ads onto users’ feeds, they have a responsibility to make sure those ads aren’t fraudulent.”
Earlier this month, President Donald Trump issued a directive to help fight “cybercrime, fraud, and predatory schemes” targeting Americans and businesses in the country. The move put the Administration on the hook to review the issue and take action.
“The United States shall counter attacks on Americans with a commensurate response that includes law enforcement, diplomacy, and potential offensive actions,” the directive said.
A top California regulator, Christina Tetreault, who is deputy commissioner for the state’s Office of Financial Technology Innovation, also underscored the fraud problem and the need to combat online criminals during a virtual event hosted by Payments Dive and Banking Dive Wednesday that focused on such fraud in the age of artificial intelligence.
California absorbs the highest losses, with some $18.1 billion stolen across the state, or about $460 per person, according to the federation’s report.
“It’s an all-hands-on-deck moment,” Tetreault said during the event. “Many of these scams and fraud are being done from overseas, [from] these vast scam compounds, and there's an entire criminal enterprise industry that’s working 24/7 to separate Californians from their money – that absolutely keeps me up at night.”
She noted the benefit of the president’s directive, and outlined steps her state is taking to address the fraud, including using consumer awareness campaigns, cross-industry collaboration and technology tools to fend off the fraud.
