State of Internet Scams 2023

10. 20 Most Scammed Countries: The United States Ranks #1

The United States led the world with 466,501 online scam victims in 2022.  The United Kingdom, Canada, India, and Australia round out the top five.

Why Stolen Funds Largely Cannot be Recovered: Domestic vs. International Law Enforcement Jurisdiction

Last year, the FBI IC3 was only able to recover $433 million of the total $10.3 billion lost to online scams. In 2018, the FBI launched the IC3 Recovery Asset Team (RAT) to streamline communication with financial institutions and assist FBI field offices with the freezing of funds for victims who made transfers to domestic accounts under fraudulent pretenses. 

RAT only has jurisdiction over scammers operating inside America. In that respect, RAT recovered $433 million of the $590 million stolen domestically.

The rest of the $10.3 billion was stolen by scammers living internationally.  The majority of online scams emanate from Nigeria where scamming is a full blown business sector in a country where many citizens lack financial opportunity. 

Reasons Recovering funds is challenging for banks and governments: 

1. Jurisdictional issues: Online scammers can operate from anywhere in the world, making it difficult to determine their actual location and hold them accountable. They often hide behind anonymous identities or use techniques like IP spoofing to obfuscate their true origins. This jurisdictional complexity makes it hard for authorities to pursue legal action and recover funds.
2. Encryption and anonymization: Scammers often use encryption and anonymization tools to conceal their activities and protect their identities. This makes it challenging for law enforcement agencies and financial institutions to trace transactions and identify the individuals behind the scams.
3. International cooperation: Coordinating efforts among different countries and their respective law enforcement agencies can be complex and time-consuming. It requires cooperation and information sharing between jurisdictions, which may face legal, bureaucratic, or logistical challenges.
4. Rapid movement of funds: Scammers are adept at swiftly moving funds through various accounts and financial channels, making it difficult to trace and freeze the money before it is withdrawn or transferred to other jurisdictions.
5. Lack of victim reporting: Not all victims of online scams report their losses to banks or authorities. Some may feel embarrassed, blame themselves, or believe that reporting won’t make a difference. Without sufficient reporting, it becomes harder to gather comprehensive data and take appropriate actions.
6. Limited resources: Banks and government agencies have limited resources and priorities. Investigating and recovering funds lost to online scams often requires significant resources, including specialized cybercrime units, trained personnel, and advanced technologies. Allocating these resources can be challenging due to competing priorities.

While recovering funds lost to online scams can be difficult, banks and governments have taken steps to improve security measures, educate the public about scams, and enhance cooperation between different stakeholders. However, prevention, awareness, and personal diligence remain crucial in avoiding online scams and protecting oneself from financial losses.

Where Do Online Scams Originate From?

Online scams can originate from various parts of the world, and it’s challenging to pinpoint a specific geographical location as the sole source of most scams. Scammers can operate from any country and target victims globally due to the nature of the internet and its borderless nature. However, certain regions have been known to have a higher concentration of online scam activities. These regions include:

1. West Africa, particularly Nigeria: Nigeria has gained notoriety for being associated with various types of online scams, most notable romance scams. 
2. Eastern Europe, including Russia and Ukraine: This region has been associated with cybercriminal activities, including the development and distribution of malware, hacking, and financial frauds such as phishing and identity theft. Romania and Bulgaria have also been linked to various forms of online scams, including phishing, card skimming, and online auction fraud.
3. Southeast Asia: Countries in Southeast Asia, such as the Philippines, Indonesia, and Malaysia, have seen an increase in online scams. Some of the common scams originating from this region include online romance scams, job scams, and lottery scams.

It’s important to note that these regions should not be seen as the exclusive sources of online scams. Scammers can operate from anywhere in the world, and their tactics and techniques continue to evolve. It’s crucial for individuals to remain vigilant and practice online security measures regardless of the origin of the scams.

Why are America and Other Developed Nations Targeted the Most?  

1. Economic Factors: Countries with strong economies and high levels of financial activity may attract scammers who seek to exploit potential victims for monetary gain. Scammers often target regions where people have disposable income and financial resources. 
2. Technological Advancements: Countries with advanced technological infrastructure and widespread internet access give scammers more opportunities to exploit and penetrate sophisticated online systems. 
3. Global Connectivity: Countries that have significant international connections, including trade and travel, are more susceptible to online scams. Scammers will have more opportunities to target individuals from different countries. The countries you mentioned are major players in global trade and have extensive connections with other nations, making them potential targets for scams.
4. Popularity and Awareness: It’s also worth noting that the inclusion of specific countries on these lists could be influenced by the level of awareness and reporting of scams in those regions. Countries with higher levels of awareness and reporting mechanisms may have more documented cases of scams, leading to a perception that scams frequently originate from those locations.

The Technology Behind Scams

Online scammers employ various technologies to commit their fraudulent activities. Here are some common technologies used in online scams:

1. Phishing Tools and Kits: Phishing is a prevalent scamming technique where scammers impersonate legitimate organizations to deceive individuals into revealing sensitive information. Scammers use phishing toolkits and software to create convincing fake websites, emails, or messages that mimic reputable companies or services. These tools enable scammers to collect login credentials, financial details, or personal information from unsuspecting victims.
2. Botnets: Botnets are networks of compromised computers infected with malware and controlled by scammers. They can be used to carry out a range of malicious activities, including distributed denial-of-service (DDoS) attacks, spamming, or spreading malware. Botnets allow scammers to automate their operations, generate massive volumes of scam messages, or control multiple accounts to execute coordinated scams.
3. Voice Over Internet Protocol (VoIP): VoIP technology enables scammers to make phone calls over the internet instead of traditional telephone networks. They can use VoIP services to manipulate caller ID information, making it appear as if the call is coming from a different number or a legitimate organization. Scammers can utilize VoIP to conduct vishing (voice phishing) attacks, pretending to be representatives of banks, government agencies, or tech support to trick victims into revealing sensitive information.
4. Malware and Ransomware: Scammers deploy various forms of malware, such as viruses, worms, or Trojans, to infect victims’ devices. Malware can be distributed through malicious email attachments, infected websites, or software downloads. Once the malware infects a device, scammers can gain unauthorized access, steal personal information, or deploy ransomware that encrypts victims’ data and demands a ransom for its release.
5. Social Engineering Techniques: While not specific to technology, social engineering plays a significant role in online scams. Scammers use psychological manipulation and deception to exploit human vulnerabilities and persuade individuals to disclose sensitive information, make fraudulent transactions, or download malicious software. Social engineering techniques can include impersonation, creating a sense of urgency, building trust, or leveraging emotional appeals.

5 Most Common Crypto Scams

The unprecedented rise in investment scams in 2022 was largely due to crypto-investment scams which stole a record $2.57 billion last year. Here are three current

1. Fake ICOs (Initial Coin Offerings): Scammers create fraudulent ICOs to capitalize on the hype around new cryptocurrencies. To avoid fake ICOs, conduct thorough research on the project team, the technology, and the use case. Look for legitimate projects with transparent whitepapers and active communities.

2. Fake Exchanges and Wallets: Scammers set up fake exchanges or wallet services to steal users’ funds. To avoid fake platforms, only use reputable and well-known exchanges and wallets. Verify the website’s URL and look for security measures like 2FA and cold storage for funds.

3. Pump and Dump Schemes: Scammers artificially inflate the price of a low-cap cryptocurrency by spreading false information, then sell their holdings at the peak, causing a price crash. To avoid pump and dump schemes, be cautious of sudden price spikes based on unsubstantiated claims, and research before investing in lesser-known tokens.
   
4. Investment Clubs or Telegram Groups: Scammers create fake investment clubs or Telegram groups, enticing users to join and invest. To avoid such scams, be wary of joining groups that promise exclusive investment opportunities or demand upfront payments. Do your own research and make informed investment decisions.
   
5. Malware and Fake Apps: Scammers distribute malware or create fake cryptocurrency-related apps to steal private keys and sensitive information. To avoid these scams, only download apps from official app stores, use reputable antivirus software, and avoid clicking on suspicious links.

5 Most Common AI Deep Fake Video Scams

The use of AI deepfake videos and voice cloning in online scams is a growing concern. Scammers are leveraging these technologies to manipulate and deceive individuals for fraudulent purposes. 

1. Impersonation Scams: Scammers can use AI deepfake technology to create videos or audio recordings that mimic the voices and appearances of trusted individuals, such as family members, friends, or authority figures. They may impersonate someone close to the victim and request financial assistance or sensitive information, leading to financial loss or identity theft.
2. CEO Fraud and Business Scams: AI deepfake videos or voice cloning can be used to impersonate high-ranking executives within organizations. Scammers can manipulate videos or audio recordings to mimic the CEO’s voice and appearance, then use these to deceive employees into making unauthorized financial transactions or sharing confidential company information.
3. Romance Scams: In romance scams, scammers create fake personas and develop relationships with unsuspecting individuals online. AI deepfake videos or voice cloning can be employed to simulate video calls or voice conversations, making the scam appear more authentic and convincing. The scammers can further manipulate the multimedia content to deceive victims emotionally and financially.
4. Face Swapping: Deepfake technology can be used to swap the faces of individuals in videos, making it appear as if someone else is speaking or acting. For example, there have been deepfake videos that replace the faces of celebrities with other famous individuals, creating the illusion that they are performing in a movie or TV show.
5. Revenge Porn: Deepfake videos have been a cause for concern in the context of revenge porn, where someone’s face is superimposed onto explicit content without their consent. This has serious implications for privacy, consent, and the potential harm it can cause to individuals involved.

How to Avoid AI Deep Fake and AI Voice Cloning Scams

• Be cautious of unsolicited requests: If you receive a phone call or message from someone requesting personal information or financial transactions, be skeptical, especially if it seems out of the ordinary. Verify the identity of the person through other means before sharing sensitive information.
• Secure your personal information: Be mindful of the information you share online, especially on social media platforms. Limit the amount of personal information publicly available, as scammers can use it to create more convincing scams.
• Enable two-factor authentication (2FA): Enable 2FA for your online accounts whenever possible. This adds an extra layer of security by requiring a secondary verification method, such as a unique code sent to your phone, in addition to your password.
• Stay informed about AI scams: Stay updated on the latest AI scam techniques and trends. Awareness can help you identify potential scams and avoid falling victim to them. Follow reliable news sources and organizations that specialize in cybersecurity for the latest information.
• Verify the source of information: If you come across a video or audio clip that seems suspicious or too good to be true, take the time to verify its authenticity. Cross-reference the information with trusted sources or contact the individual or organization directly to confirm its legitimacy.
• Be critical of media content: Develop a critical eye when consuming media content, especially online. Look for signs of manipulation, such as unnatural facial movements, mismatched audio and video, or inconsistencies in the content. Use reputable fact-checking sources to verify the accuracy of information.
• Report suspicious activity: If you encounter a suspected voice cloning or deep fake scam, report it to the relevant authorities, such as law enforcement agencies, online platforms, or cybersecurity organizations. By reporting scams, you can help prevent others from becoming victims.

Online Scams and the 2024 Presidential Election

It is important to be aware that major events, such as presidential elections, can create opportunities for scammers to exploit the heightened attention and engagement of the public. In recent years, there have been instances of online scams and disinformation campaigns surrounding elections, including phishing attempts, fake news articles, and social media manipulation.

Scammers may attempt to capitalize on the political climate, voter engagement, and public interest to deceive individuals and steal personal information, spread misinformation, or exploit political affiliations. It’s crucial for individuals to remain vigilant and take steps to protect themselves from online scams during this time.

5 online scams related to political elections

1. Phishing Emails: Scammers send emails pretending to be from political campaigns or election officials, asking for personal information, donations, or urging you to click on malicious links. 
   
   Avoidance: Be cautious of unsolicited emails. Verify the sender’s email address and cross-check with official campaign websites or contact information. Never click on suspicious links or provide personal information through email. Instead, visit the official campaign website directly.

2. Fake Fundraising Campaigns: Scammers set up fake online fundraising campaigns claiming to support a candidate or cause, but they keep the collected funds for themselves. 
   
   Avoidance: Only donate to verified and reputable campaigns. Research the organization or candidate before making any donations. Use official campaign websites or trusted crowdfunding platforms to contribute. Be skeptical of unsolicited fundraising requests on social media.

3. Voter Registration Scams: Scammers create fake websites or send emails pretending to be voter registration platforms, tricking people into providing personal information for identity theft or fraudulent purposes. 
   
   Avoidance: Register to vote through official government websites or local election offices. Double-check the website’s URL to ensure it is legitimate. Avoid clicking on links in unsolicited emails. Be cautious of sharing sensitive personal information online.

4. Disinformation Campaigns: Scammers spread false information through social media, fake news articles, or manipulated images/videos to mislead voters and create divisions. 
   
   Avoidance: Verify information from multiple reliable sources before believing or sharing it. Fact-check news articles and use reputable fact-checking organizations. Be critical of sensationalized or extreme claims. Report false or misleading information on social media platforms.

5. Robocalls and Phone Scams: Scammers make automated phone calls pretending to be campaign representatives, pollsters, or election officials, aiming to collect personal information or intimidate voters. 
   
   Avoidance: Be cautious when receiving unsolicited calls. Hang up if the call seems suspicious. Do not provide personal information or financial details over the phone. Verify the identity of the caller by contacting the official campaign or election office through their verified contact information.

 Victims’ Psychological and Emotional Damage

Online scams can have significant psychological and emotional impacts on their victims:

1. Financial Stress and Loss: One of the primary consequences of falling victim to an online scam is the financial loss. Victims may experience extreme stress, anxiety, and worry due to the financial burden caused by the scam. They may face difficulties in recovering their lost funds, which can lead to long-term financial insecurity and hardship.
2. Trust Issues and Emotional Betrayal: Online scams often involve the manipulation of trust and the betrayal of victims’ expectations. Victims may feel a profound sense of betrayal, as scammers exploit their vulnerability and deceive them into believing false narratives or relationships. This can lead to a loss of trust in others, making it challenging for victims to form new relationships or trust online platforms in the future.
3. Shame, Embarrassment, and Self-Blame: Scam victims often experience feelings of shame, embarrassment, and self-blame. They may blame themselves for falling for the scam, feeling foolish or gullible. Victims might be hesitant to share their experience with others due to fear of judgment or stigmatization, which can further isolate them and hinder their emotional recovery.
4. Psychological Trauma: Being a victim of an online scam can result in psychological trauma. The experience of being deceived, manipulated, and financially harmed can have a profound impact on a person’s mental well-being. Victims may develop symptoms of anxiety, depression, post-traumatic stress disorder (PTSD), or other psychological conditions as a result of the scam.
5. Loss of Confidence and Increased Vulnerability: Online scams can erode victims’ confidence and self-esteem. They may question their judgment, decision-making abilities, and become more cautious or skeptical in their interactions. The loss of confidence can make individuals feel more vulnerable and hesitant to engage in online activities or trust others.
6. Social Isolation and Withdrawal: Scam victims might experience social isolation, withdrawal, or a reluctance to seek support. They may withdraw from social interactions, both online and offline, due to feelings of shame or a fear of being targeted again. This isolation can further exacerbate the emotional impact of the scam and impede the healing process.

Seeking Support and Recovery

Recovering from the psychological and emotional damages caused by online scams is essential. It’s important for victims to seek support from trusted friends, family members, or professional counselors who can provide understanding, empathy, and guidance. Reporting the scam to law enforcement authorities can also help in preventing similar scams and potentially recovering lost funds.

Victims should remember that they are not alone and that falling victim to a scam does not reflect personal shortcomings. Rebuilding trust, practicing self-care, and developing healthy skepticism when engaging in online activities can aid in the recovery process.

Where to go if you are an Online Scam Victim

If you have fallen victim to an online scam, it’s important to take immediate action to minimize the impact and report the incident to the appropriate authorities. Here are some authorities you can contact:

1. Local Law Enforcement: Start by contacting your local police department or law enforcement agency. They can document the incident, provide you with an official report or case number, and offer guidance on further steps to take.
2. Federal Trade Commission (FTC): The FTC is a government agency in the United States that handles consumer complaints and helps investigate and take action against fraudulent or deceptive practices. You can file a complaint with the FTC through their official website (www.ftc.gov) or by calling their toll-free hotline.
3. Internet Crime Complaint Center (IC3): The IC3 is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C). It accepts and analyzes complaints related to internet crimes and scams. You can file a complaint through their website (www.ic3.gov).
4. Your Financial Institution: If the scam involved financial transactions, such as unauthorized charges or fraudulent bank transfers, contact your bank, credit card company, or any other financial institution involved. They can guide you on how to report the fraud, dispute charges, and potentially recover lost funds.
5. Consumer Protection Agency: Depending on your country of residence, there may be specific consumer protection agencies or organizations that handle fraud and scams. Research and contact the appropriate agency in your country to report the scam and seek assistance.
6. Online Platforms: If the scam occurred on a specific online platform, such as a social media site, online marketplace, or dating app, report the incident to the platform’s customer support or abuse department. They may have specific procedures in place to address scams and take action against fraudulent accounts.

5 General Tips to Avoid Online Scams in 2023

1. Do not give money to anyone you have never met in person.

2. Do not give out personal information if you have never met in person