Rise in Consumer Losses Due to Impersonation Scams: FTC Warns of Growing Threats

Mobile Wallets Fuel Surge in Payment Fraud, Leaving Consumers Vulnerable

NEW YORK – A concerning trend is emerging in the landscape of digital payments: fraudsters are increasingly exploiting mobile wallets to launder stolen funds, leaving consumers exposed to meaningful financial losses. While law enforcement appears to be focusing elsewhere,experts say banks and tech companies bear a growing responsibility for bolstering security measures and preventing these scams.Recent reports indicate a elegant operation where criminals are utilizing mobile wallets on smartphones to quickly move illicitly obtained funds into other accounts,effectively washing the money and making it harder to trace. This tactic is contributing to a broader surge in scams targeting individuals, particularly older Americans.

The federal trade Commission (FTC) revealed last week a dramatic rise in impersonation scams preying on seniors. Losses exceeding $10,000 have quadrupled between 2020 and 2024,with losses surpassing $100,000 jumping an alarming eightfold in the same period. these scams typically involve fraudsters posing as government agencies or businesses, fabricating emergencies to pressure victims into transferring funds under the guise of “protecting” their accounts or identities.

“The scale of these losses is deeply troubling,” says security analyst Elias Vance. “The speed and convenience of mobile wallets, while beneficial for legitimate users, are also being exploited by criminals to rapidly move stolen money before it can be recovered.”

The Rising Tide of Scams: A Broader Perspective

This isn’t an isolated incident. PYMNTS Intelligence research shows that approximately 30% of Americans – roughly 77 million people – have fallen victim to a scam in the past five years. The financial impact is significant, with most victims losing over $500, and many experiencing losses in the thousands of dollars.

The shift in the fraud landscape is also noteworthy. Scams now account for 27% of all fraud losses reported by U.S. financial institutions in 2024, a significant jump from 12% in 2023. This indicates a deliberate and accomplished strategy by fraudsters to exploit vulnerabilities in consumer trust and digital payment systems.

Why Mobile Wallets Are Attractive to Scammers

Several factors contribute to the appeal of mobile wallets for fraudulent activity:

Speed and Accessibility: Funds can be transferred almost instantly, making it challenging to intercept transactions.
Anonymity: While not entirely anonymous, mobile wallets can offer a layer of obfuscation, hindering investigations.
Widespread Adoption: The increasing popularity of mobile wallets provides a larger pool of potential victims.
Limited Oversight: Current regulations and security protocols haven’t fully kept pace with the evolving tactics of fraudsters.

Protecting Yourself in a Digital World

Experts recommend the following steps to mitigate the risk of falling victim to these scams:

Be Wary of Unsolicited Contact: Never provide personal or financial details in response to unexpected calls,emails,or texts.
Verify Identities: Independently verify the legitimacy of any organization requesting funds or information.Contact the organization directly using a known phone number or website.
Enable Multi-Factor Authentication: Add an extra layer of security to your mobile wallet and other financial accounts.
Monitor Your Accounts Regularly: Check your bank and mobile wallet statements frequently for any unauthorized activity.
* Educate Yourself and Loved Ones: Stay informed about the latest scam tactics and share this information with family and friends, especially older adults.

The Road Ahead: Industry Responsibility and Enhanced security

While individual vigilance is crucial,experts emphasize the need for greater responsibility from banks and tech companies. Implementing more robust fraud detection systems, enhancing user authentication protocols, and collaborating with law enforcement are essential steps to combat this growing threat. The future of digital payments depends on building a secure and trustworthy ecosystem for all users.

What steps can consumers take to enhance teh security of their online accounts and mitigate the risk of falling victim to impersonation scams?

Understanding Impersonation Scams & Their Increasing Prevalence

Impersonation scams are rapidly becoming one of the most significant threats to consumers’ financial security. The Federal Trade Commission (FTC) has issued repeated warnings about the escalating losses reported, highlighting a concerning trend of elegant tactics employed by fraudsters. These scams involve criminals pretending to be someone you trust – a government official, a family member, a representative from a well-known company, or even a romantic partner – to trick you into sending them money or revealing personal details.

The FTC’s latest data reveals a dramatic surge in reported losses, with billions of dollars stolen annually through these deceptive practices. This isn’t just about financial loss; it’s about the emotional distress and violation of trust these scams create. common types of impersonation scams include:

Government Impersonation: Scammers posing as IRS agents, Social Security Management officials, or law enforcement.

Tech Support Scams: Fraudsters claiming to be from tech companies like Microsoft or Apple, alleging your computer has a virus.

Family Emergency Scams: Criminals pretending to be a loved one in urgent need of funds.

Romance Scams: Building relationships online to gain trust and then requesting money.

Business/Company Impersonation: Scammers posing as representatives from legitimate businesses to request payment or personal details.

Key Statistics & Recent FTC Findings (2024-2025)

The FTC’s ongoing monitoring of fraud reports paints a stark picture. Here’s a breakdown of recent findings:

Record Losses: In 2024, reported losses to impersonation scams exceeded $6.1 billion, a significant increase from previous years. Early data from 2025 indicates this trend is continuing.

Top Reported Scams: Government impersonation and romance scams consistently rank among the most financially damaging.

Payment Methods: Scammers increasingly prefer payment methods that are difficult to trace, such as gift cards, wire transfers (like Western Union or MoneyGram), and cryptocurrency.

Demographic Targeting: While all demographics are vulnerable,seniors are disproportionately targeted due to perceived trust and potential financial resources. Though, younger adults are increasingly falling victim to romance and online shopping impersonation scams.

Social Media’s Role: Social media platforms are becoming major hubs for initiating impersonation scams, particularly romance and investment scams.

How Impersonation Scams Work: A Closer Look

Understanding the tactics scammers use is crucial for protecting yourself. Here’s a step-by-step breakdown of a typical impersonation scam:

1. Initial Contact: Scammers often initiate contact through phone calls, emails, text messages, or social media.
2. Building Trust (or Creating Urgency): Thay may attempt to build rapport by pretending to share common interests or create a sense of urgency by claiming an immediate problem needs to be resolved.
3. Request for Information or money: The scammer will eventually ask for sensitive information (Social Security number, bank account details, credit card numbers) or request money.
4. Pressure Tactics: They often use pressure tactics, threatening legal action, arrest, or negative consequences if you don’t comply.
5. Disappearance: once they’ve obtained what they want, scammers typically disappear, blocking your attempts to contact them.

Protecting Yourself: Practical Tips & Prevention Strategies

Staying vigilant and informed is your best defense against impersonation scams. Here are some actionable steps you can take:

verify Requests: Always independently verify any request for money or personal information, even if it appears to come from a trusted source. Contact the association directly using a known phone number or website.

Be Wary of Unsolicited Contact: Be suspicious of any unsolicited calls, emails, or messages, especially those requesting immediate action.

Never Pay with Untraceable Methods: Avoid using gift cards, wire transfers, or cryptocurrency to pay someone you don’t know or trust.

Protect Your Personal Information: Be cautious about sharing personal information online or over the phone.

Enable Two-Factor Authentication: Add an extra layer of security to your online accounts by enabling two-factor authentication.

report Suspicious Activity: Report any suspected scams to the FTC at ReportFraud.ftc.gov.

* Educate Your Family: Share this information with your family and friends, especially seniors, to help them stay safe.

Real-World Examples & Case Studies

The IRS Impersonation Scam: In 2023, the FTC received over 300,000 reports of IRS impersonation scams, resulting in millions of dollars in losses. Scammers frequently enough threaten arrest or legal action if victims don’t immediately pay a fabricated tax debt.

The Grandparent Scam: This classic scam involves a scammer calling a grandparent, pretending to be their grandchild in trouble and needing money for bail, medical expenses, or travel. A case in florida in early 2025 saw an elderly woman lose $10,000 to this type of scam.

Romance Scam Surge: The FTC has noted a significant increase in romance scams, particularly targeting individuals on dating apps and social media. Victims frequently enough send money to scammers they’ve never