Online Scams have Become a Global Epidemic

Updated: Nov 17

An estimated 293 million scam reports were filed and $55.3 billion was lost in scams in 2021 worldwide

Scammers Scam Everything

Scammers have proven more successful in 2021 than ever before. The number of scams reported increased with 10.2% from 266 in 2020 to 293 million reports in 2021. The amount of money lost in scams grew from with 15,7% from $47.8 billion in 2020 to $ 55.3 billion in 2021, mainly due to the rise in Investment Scams (also read: About the Data).

Figure 1: Money Lost and Number of Scams Reported Worldwide

Scammers are using any crises to scam people; moving from pre-ordering your Coronavirus vaccination in the beginning of 2021, to cheap flight tickets for Hajj pilgrims, “supporting” victims of the Australian bush fires, “helping” Ukrainian refugees and more recently, tickets to Queen Elizabeth’s funeral memorial and energy crisis government subsidies.

The Bloody Facts

With 4.72 billion internet users (60.1% of the global population) now spending nearly 7 hours every day online, the economy continues to digitalize at an increasing rate. Crime is following quickly. In most Western countries online scams are now the most reported type of crime.

Figure 2: Scams are in many countries now the most reported type of crime

According to the Australian Competition & Consumer Authority, 96% of Australians have been exposed to a scam in the last 5 years with half of these contacted weekly or daily by scammers. In France, 61% of the people have been exposed to “alternative” investment offers last year. In the United Kingdom, 50% of telephonic survey respondents reported receiving an email, text, or social media message that may have been phishing in one month.

No Longer a Western Disease

However, scams are no longer a “Western” disease. 53% of Filipinos stated they were targeted by fraudsters in 3 months time. 11% of the respondents said they ended up as victims. Likewise, other developing countries like Brazil, Ghana, Nigeria and Kenya are reporting huge increases in online scams, especially via mobile phones.

The introduction of a new, easy-to-use, mobile payment method called Pix in Brazil, led to an influx of scams. In Nigeria, the number of transactions via mobile channels increased by 164% in 2021. As a result, scams via mobile boomed as well. 62% of Saudi Arabian consumers received spam & scam messages, mainly on their mobiles. 14% admitted that they fell for the scam and lost money. In South Africa, two massive data breaches caused a tsunami of phishing attacks using highly personal data. Indonesia reports that 25% of their citizens has been a victim of an online fraud, making it the 2nd largest reported type of crime in the country.

Investment Scams Continue to Rise

The strong increase in scams is not only caused by the accelerated rate of digitalization but also by high inflation, quickly increasing cost of living, and, in some countries, high unemployment rates. This is forcing people to look for new ways to invest or simply make ends meet. Despair makes bad councel.

In 2020 we already saw a sharp increase in investment, mainly in cryptocurrency scams. The Turkish government felt forced to suspend a cryptocurrency exchange, freezing more than $2 billion in assets. Canada reports that investment scams were one of the fastest growing types of online fraud, from 501 reports and 16.5 million lost in 2020 to 3,442 reports and 164 million in 2021. The United States reports a loss of $575 million in investment scams. Singapore reports the largest amount taken in a single case: $6.4 million.

Scam Blurring

2021 introduced a blurring of investment with romance scams. Where victims of romance scams used to lose money to pay for hospital, travel or other urgent needs of their virtual lovers, these scammers are increasingly switching to making “joint” investments together. To make matters worse, scam victims are after the scam approached by “money recovery” firms. These often are the same scam group, promising to help the victim retrieve his loses, of course, after first paying an “administration” fee. The money is never actually recovered. As a result, in most countries researched, the number of scam reports has not only increased, but they report an ever-stronger growth in money lost.

One of newest types of scams are loan apps. Especially in developing countries like Brazil, Mexico, Nigeria, India and Tanzania, these kind off scams are on the rise. Here too scams are blurred, in some cases the loans start as advance fee scams, asking the victim to first pay money before the loan can be given (which in the end never happens). In other cases, an online loan is provided (often much less than applied for) with huge interests. If the victim cannot pay, the lender starts calling and messaging with threats until the victims pays a multitude of what was borrowed. Finally, loan apps are often misused to get the necessary data to apply for loans or credit cards elsewhere.

Figure 3: The number of scams reported and money lost differs strongly per country

Scams remain one of the most under reported types of crime

As scam victims often feel ashamed or, according to previous research, do not know where to report a scam, scam reporting remains low.

In nearly all countries, reporting scams remains fragmented across CERTs, consumer protection organizations, financial authorities, banks, telecom operators, local police offices, cybercrime teams, victim support organizations, private initiatives, review sites and social media. In several countries like Kenya and Pakistan, action from law enforcement is described as slow, fragmented and inconsistent. The process of reporting must often be done physically rather than digitally.

In Australia an estimated 13% of all scams are reported. Canada estimated only 5% of the cases reach law enforcement while Israel estimated this number to be 9% and the Dutch and French estimates range between 12%–17%.

Some countries are centralizing scam reporting and are investing in making reporting easier. France has launched a new online platform for reporting internet scams without having to go to a police station. Several countries like the Belgium, Poland, New Zealand and the United Kingdom, now offer citizens the option to forward dubious emails and text messages for further analysis and action.

Social Media Steppingstone for Scammers

In nearly all countries, social media are plagued by scammers trying to lure victims. According to Pakistani authorities, 23% of the reported online crimes, started on Facebook. Indonesia states that 51% of the scams start on social media. In the United States more than one in four people who reported losing money to fraud in 2021 said it started on social media with an ad, a post, or a message.

There seems to be a trend to make social media more accountable. The Australian Competition & Consumer Commission for example is taking legal action over alleged misleading conduct by Meta for publishing scam celebrity crypto ads on Facebook. On a positive note, in Malaysia, Meta is supporting an online scam awareness campaign.

Get Them while They are Young

Another scam trend several countries, like Brazil, China, Finland, the Netherlands, New Zealand and Thailand are reporting, is that young people are targeted more and also lose more frequently money then elderly. Seniors still lose the most money, especially to investment/crypto scams.

In Finland especially, students seem to be a targeted group. The worst-hit age group were individuals between 18 and 30 years old (23.3%), who were scammed 8% more compared to 2020. Likewise, the Dutch University of Twente found that young people are 21.5% more likely to be scammed than older people (13.1%). New Zealand reports that 55% of the people who report scams are now younger than 40 and a study from Thailand shows that Generation Y and Z are the most vulnerable to online scams due to the amount of time they spend online. Finally, a Chinese survey amongst college students reported that more than a tenth of the respondents had lost money to scammers. This has prompted the Chinese government to launch a new wave of education campaigns aimed at making young adults more wary.