As technology advances, so do scammers, refining old tricks and inventing new ones.
With sophisticated technologies, they’re now launching global scams, from phishing to ransomware, affecting everyone, everywhere. Consider the Hive group; they’ve targeted over 1,500 victims globally in sectors like healthcare and education, using an easy-to-operate ransomware kit that requires minimal tech skills.
Moreover, the scale of money lost in fraud is startling. In 2023 alone, the FTC reported that fraudsters stole $10.3 billion from Americans, a nearly 16% increase from the previous year.
What’s clear is that scammers have moved far beyond with their tactics. Deep Fakes are now a new fraud trend, and with cheaply available identities on the dark web, it’s no longer a hassle or loaded task to fool and make money.
However, to stay ahead of these smart actors, investigators must continuously refine their investigation methods. This requires understanding the evolving tactics of fraud. So let’s start by reviewing the top 10 most reported fraud categories in the USA for 2023 and later spot the cutting-edge tools investigators need to combat these evolved threats.
Most Reported Fraud Categories in the U.S. in 2023
Fraud is a pervasive issue in the United States, affecting millions of individuals each year across various categories. For an insight into the most common types of fraud in the US last year and their underlying causes, see the list below, followed by a detailed discussion.
(Note: We curated this list based on data collected and analyzed by the FTC Consumer Sentinel Network.)
| Rank | Type of Fraud | Number of Cases |
| 1 | Identity Theft | 1,036,961 |
| 2 | Imposter Scams | 856,284 |
| 3 | Credit Bureaus, Info, Furnishers, and Report Users | 712,893 |
| 4 | Online Shopping and Negative Reviews | 377,550 |
| 5 | Banks and Lenders | 289,747 |
| 6 | Auto Related | 183,846 |
| 7 | Prizes, Sweepstakes and Lotteries | 158,070 |
| 8 | Internet Services | 129,041 |
| 9 | Debt Collection | 126,336 |
| 10 | Healthcare | 113,364 |
#1. Identity Theft
Number of Reported Cases: 1,036,961
Identity theft was the top most reported fraud category in the US in 2023, covering everything from credit card fraud to government benefits schemes.
Mechanisms of Theft:
- Scammers have diversified their methods to steal identities. With gen AI, they are now crafting very convincing phishing websites and emails to steal identities.
- They increasingly utilize deep fake technology and voice cloning to impersonate trusted individuals, creating realistic audio and video simulations. This allows them to deceive victims into believing they are interacting with someone they know and trust, thereby gaining unauthorized access to personal and financial information.
- As banking has increasingly moved online, criminals have fine-tuned their strategies to exploit vulnerabilities in digital platforms. This has led to a surge in SIM swapping and account takeover attempts, where they gain unauthorized access to victims’ personal accounts.
- Additionally, the dark web continues to serve as a marketplace for buying and selling stolen identities, complete with customer reviews and money-back guarantees.
Popular Case Example:
Rohan Conrad Campbell’s case was a real head-scratcher for Florida investigators. He masterfully used fake IDs and bogus accounts to snag cell phones from various stores. His knack for slipping into different identities made catching him tough. Campbell bolted during his 2019 pre-trial and stayed hidden until early 2023, turning what seemed like a straightforward fraud case into a drawn-out game of cat and mouse with law enforcement. This showcased the gnarly challenge of pinning down a clever fraudster.
#2. Imposter Scams
Number of Reported Cases: 856,284
Imposter scams were a prominent fraud category in the US in 2023, featuring fraudsters pretending to be government officials, family members, or representatives of well-known organizations.
Mechanisms of Theft:
- Scammers often start a conversation on one platform, like email, and then shift to phone calls or texts. This tactic not only builds trust but also makes tracking the fraud more complex.
- By harnessing detailed personal information from social media or public records, imposters craft highly personalized emails and messages.
- Scammers also use advanced AI to generate realistic videos and audio, including voice cloning, to impersonate familiar figures. This high-tech deception makes the fraudulent communications appear genuine and beyond reproach.
Popular Case Example:
In 2023, Valeria Haedo received a call from a scammer posing as a US Customs officer, using AI voice cloning and caller ID spoofing for legitimacy. They falsely linked her identity to crimes and pressured her to transfer money to a “safe” account. She eventually recognized the scam and refused to comply, thwarting their efforts.
#3. Credit Bureaus, Info, Furnishers, and Report Users
Number of Reported Cases: 712,893
Credit industry fraud was a significant issue in 2023, but it is growing fast. Cybercriminals are exploiting data breaches to steal and manipulate sensitive information, impacting financial transactions and credit scores across the US.
Mechanisms of Theft:
- Fraudsters create “Frankenstein” identities, often enhanced with AI-created faces. These identities can pass initial verification checks used by financial institutions and are used to open unauthorized accounts or obtain credit illegitimately.
- Criminals access advanced tools like botnets and malware through dark web services to infiltrate the networks of companies that hold vast amounts of personal and financial data. Once inside, fraudsters can siphon off data to be used or sold for fraudulent purposes.
- The rise of real-time payment systems has led to increased fraud attempts. These transactions are instant and irreversible, making them attractive targets for fraudsters.
- Fraudsters use techniques such as MFA bombing, where a victim’s device is flooded with authentication requests, hoping the victim accidentally approves a fraudulent transaction.
Popular Case Example:
In July 2022, Hyundai Capital America was fined $19 million for submitting false loan and lease information to credit bureaus, which damaged many individuals’ credit scores despite their timely payments. This case highlights the severe risks of inaccurate data reporting and underscores the need for stringent measures to protect consumer credit information.
Read and explore the role of technology in investigating transaction fraud!
#4. Online Shopping and Negative Reviews
Number of Reported Cases: 377,550
As one of the fastest-rising fraud categories in the US, online shopping fraud often involves savvy perpetrators luring customers with counterfeit websites offering incredible deals. Once personal or credit card details are entered, scammers exploit this information.
Mechanisms of Theft:
- Fraudsters create websites that closely resemble legitimate online stores, copying logos and layouts. These sites often use URLs that are deceptively similar to those of real businesses.
- Scammers utilize social media ads and SEO strategies to rank their fraudulent sites highly in search engine results.
- To attract customers, they set up fake online stores and list products at unbelievably low prices, aiming to collect payment information with no intention of delivering the products. They then use these financial details for other fraudulent activities.
Popular Case Example:
A vast fraud operation by a Chinese network involved creating 76,000 fake websites to dupe around 800,000 individuals in the UK and the US. This scheme resulted in significant data theft and financial losses, showcasing the global reach and sophistication of online shopping fraud.
#5. Banks and Lenders
Number of Reported Cases: 289,747
Fraud targeting banks and lenders frequently involves sophisticated manipulation of digital systems and personal data to commit financial crimes such as identity theft, account takeovers, and unauthorized loan applications.
Mechanisms of Theft:
- Fraudsters use detailed phishing campaigns that mimic communications from legitimate financial institutions to trick customers into disclosing sensitive financial information.
- Cybercriminals deploy software bots and hacking tools to manipulate loan processing and approval systems, enabling them to alter loan terms or divert loan disbursements without immediate detection.
- They target vulnerable homeowners offering to secure loan modifications for upfront fees, often failing to deliver promised services or disappearing after receiving payment.
Popular Case Example:
In 2023, four individuals were sentenced in Virginia for a bank fraud scheme, stealing over $650,000 using stolen identities to create fake documents and withdraw funds from at least 25 victim accounts. This case underscores the severe impact of identity theft on financial security.
Must read about the 10 most common types of check fraud in the US post-COVID!
#6. Auto Related
Number of Reported Cases: 183,846
In 2023, the US saw a significant rise in auto-related fraud, with deceptive practices in auto sales, financing, and services causing major consumer concerns.
Mechanisms of Theft:
- Fraudsters use sophisticated software to alter digital records and documents, such as forging service histories or tampering with odometer readings to inflate vehicle value.
- Scammers create highly convincing fake websites that mimic legitimate dealership sites. These websites offer non-existent deals to phish for personal and payment information from unsuspecting buyers.
- Using targeted online advertising, fraudsters lure customers with promises of low rates or favorable terms that are substantially changed at the point of purchase or after initial agreements.
Popular Case Example:
One of the most popular auto fraud cases involves the Ford company. Ford used a trick to deceive the customs. They disguised cargo vans as personal vehicles from Turkey to pay lower import taxes. Ultimately, Ford paid $365 Million to settle the case.
#7. Prizes, Sweepstakes and Lotteries
Number of Reported Cases: 158,070
Lottery scams are one the most common frauds in the USA, where individuals are misled into believing they have won a prize and are coerced into paying fees or providing personal information to claim it.
Mechanisms of Theft:
- Scammers use elaborately crafted emails and websites mimicking legitimate lotteries to deceive victims into providing personal information or sending money.
- Using social media and spoofed calls, fraudsters impersonate well-known sweepstakes or government agencies, convincing victims of their “wins” and requesting money for taxes or fees upfront.
- Increasingly, scammers request payment via gift cards or wire transfers under the guise of covering processing or tax fees, exploiting the difficulty in tracing and recovering these funds.
Popular Case Example:
In recent news, a Jamaican man named Anthony L Stewart was caught tricking older people into thinking they had won a lottery. He was calling them and told them they had won a lottery but had to pay the tax before getting the prize. The victims wired him thousands of dollars.
#8. Internet Services
Number of Reported Cases: 129,041
Internet service fraud continued to evolve, exploiting various online platforms and services, including website content issues, online payment difficulties, and undisclosed charges.
Mechanisms of Theft:
- Fraudsters deploy sophisticated phishing campaigns, using advanced AI to script legitimate-looking emails and websites to trick users into sharing sensitive information. These sites often mimic trusted entities like banks or popular online services to steal login credentials and financial data.
- Scammers often utilize social engineering through fake social media profiles, ads, and even customer service accounts designed to steal personal and financial information or to spread malware.
Popular Case Example:
In 2023, Christian Akhatsegbe and his brother Emmanuel ran a major internet scam. They tricked companies with fake emails and invoices and made millions. Despite their success, Christian faced the consequences. He got caught, spent over seven years in prison, and had to pay back over $2 million.
#9. Debt Collection
Number of Reported Cases: 126,336
In 2023, the US saw a considerable number of debt collection fraud cases. This type of fraud involves deceptive practices by collectors who falsely represent the status of debts, employ harassment, and violate the Fair Debt Collection Practices Act.
Mechanisms of Theft:
- Scammers use AI for robocalls and prerecorded messages to craft convincing and natural-sounding communication, often impersonating legal or financial authorities to get payments.
- They also attempt to collect debts that do not exist, are not owed, or have already been paid. Scammers create these fictional debts to exploit those unaware of their rights.
- Collectors use deceptive language or outright lies about legal repercussions to induce panic and payments. This may include threats of legal action, wage garnishment, or arrest if the alleged debts are not paid.
Popular Case Example:
In a recent debt collection fraud case, Portfolio Recovery Associates, a famous debt collection firm, was fined $24 million by the Consumer Financial Protection Bureau. They were caught threatening people to sue them and trying to collect money for false debts.
#10. Healthcare
Number of Reported Cases: 113,364
Included in the list of the most prevalent frauds in the US in 2023, healthcare fraud involves the theft of patients’ funds designated for their care and treatment. Fraudsters employ various software, coding systems, and methods to deceive the medical system.
Mechanisms of Theft:
- Fraudsters create fake patient identities or entirely fictitious patient records to submit fraudulent claims for medical procedures that were never performed.
- Using sophisticated software, scammers manipulate medical billing codes to inflate charges or bill for more expensive services than those actually provided, a practice known as upcoding.
- In the digital age, scammers exploit telemedicine by claiming reimbursements for fictitious consultations and prescribing unnecessary medications for kickbacks.
- The use of e-commerce platforms, online marketplaces, and social media allows counterfeiters to sell counterfeit drugs directly to consumers, bypassing traditional regulatory checks.
Popular Case Example:
In a recent and severe case of healthcare fraud, Yogesh K Pancholi, an Indian man, was handed a nine-year sentence in a US jail. His crime? He cheated Medicare out of a staggering $2.8 million in a scam. Pancholi went to great lengths to deceive, pretending to own a home health company, submitting fake bills for services never provided, and even attempting to shift blame onto others.
Now that we’ve seen how fraud tactics are evolving in 2023, understanding how to combat them is crucial. In the next section, let’s explore what an ideal investigative tool would look like to effectively tackle these sophisticated challenges.
Scanwriter – Your Ultimate Investigation Kit for All Frauds
As fraud across the US becomes increasingly sophisticated and widespread, affecting everything from healthcare to internet services, the challenge for investigators to stay ahead intensifies.
The complexities with these modern fraud schemes demand equally sophisticated tools for detection and prevention. This is where ScanWriter steps in as your reliable ally in the fight against frauds.
Here’s why an investigator needs ScanWriter, for its:
- Exceptional Data Processing: Handles vast datasets, processing over 1,000 checks in under an hour, ensuring comprehensive and swift fraud analysis.
- Complex Pattern Recognition: Identifies patterns and flag anomalies in huge datasets, crucial for early detection and right investigation of fraud.
- Effortless Integration: Seamlessly works with leading accounting platforms like QuickBooks, Excel, and Power BI, facilitating enhanced data analysis and operational efficiency.
- Stringent Security Protocols: Maintains the highest standards of data integrity and security with on-site deployment, which is crucial for sensitive investigative work.
- Comprehensive Support Network: Offers extensive support through a dedicated team, always available via phone, live chat, and email. Additionally, it provides training and resources to maximize the effectiveness of fraud investigations.
Moreover, it offers a 100% accurate system designed to precisely handle bank statements, credit card transactions, and even handwritten checks. It’s the all-in-one investigation tool kit, trusted by federal agencies and known for its user-friendly interface.
So, if you’re ready to tackle fraud head-on, contact ScanWriter and try out the free demo today!
FAQs
1. What are the types of fraud in the US?
The most common types of fraud in the USA include:
- Identity Theft
- Imposter Scams
- Credit Bureaus, Info, Furnishers, and Report Users
- Online Shopping and Negative Reviews
- Banks and Lenders
- Auto Related
- Prizes, Sweepstakes and Lotteries
- Internet Services
- Debt Collection
- Healthcare
2. Which fraud category has the biggest financial impact?
Investment frauds are rare, but they can cause enormous financial losses. According to an FTC report, each fraud case has an average loss of $7,768. In 2023, people lost more than $4.6 B due to investment fraud.
3. What are the top fraud cities in the US?
According to Al.com news, Atlanta, Tuscaloosa, Miami, Sumter, S.C., and Sebastian, Fla are the top fraud cities in the US between 2019-2023.