Fraud Landscape and How Iowa Businesses are Taking Back Ground

August 24, 2023

The Federal Trade Commission recently released data from 2.4 million U.S. consumer fraud reports, offering insights into 2022’s national and state scams. While Iowa ranked 48th out of 50 states for number of reports filed, the state’s consumers still lost $30.5 million to scammers. Given that we are home to just over 3 million people, that’s quite a hefty sum.

Iowans can arm themselves with fraud trend knowledge to better protect themselves from becoming victims in 2023.

 

The National Numbers

The big news for 2022: There were a half million fewer reported scams nationwide than in 2021. However, total losses from those scams increased 30 percent. Fraudsters stole $8.8 billion from U.S. consumers, an increase of $2.6 billion in losses from the prior year.

Georgia had the highest number of fraud reports, followed by Delaware, Nevada, Florida, and Maryland. North Dakota recorded the lowest number of reports, followed by South Dakota, Iowa, Nebraska and Wyoming.

 

Keeping an Eye on Iowa

Mirroring national year-over-year trends, Iowa recorded fewer fraud reports in 2022, yet higher financial losses. Iowans filed 12,878 fraud reports (a 20-percent drop from 2021), with $30.5 million stolen (an almost 31-percent increase).

Iowa’s top five fraud types:

1.              Imposter scams

2.              Online shopping

3.              Prizes, sweepstakes and lotteries

4.              Internet services

5.              Telephone and mobile services

 

Data as of July 15, 2023.

Iowa’s incidences of imposter fraud outpaced other scam types by a wide margin, reflecting national trends. While there are many flavors of imposter scams (e.g., government, business, utility, tech support), they share common traits:

•               Perpetrator pretends to contact the victim on a trusted entity's behalf.

•               Scammer requests victim sends money or performs a valuable action.

•               Requests typically invoke urgency and fear.

 

Imposter fraud holds dual concerns for Iowa businesses:

1.              Customers could be duped by a scammer claiming to represent the business.

2.              Employees falling for an imposter fraud could divulge sensitive company information, leading to further scams against the company.

 

Iowa Businesses Ahead of the Curve

Overall, there was good news for Iowa businesses in 2022. Per the latest Bank Iowa Business Index , 42 percent of Iowa companies reported their business had increased from 2021. Iowa companies are proactive, with 83 percent of leaders planning to adjust their practices based on changes experienced in the last few years.

While fraud had less impact on our state than others, Iowa still recorded a median loss of $500 per victim to these crimes. The Bank Iowa Business Index revealed that 82 percent of Iowa business owners spent more on cybersecurity in 2022 than in the prior year. National data found only 72 percent of companies anticipated increasing their cybersecurity budgets over the next three years, showing Iowan businesses are ahead of the curve.

Dustin Caldwell, Bank Iowa Information Technology & Interim Operations Director, is encouraged by the increased cybersecurity spending. “The key will be layering training and education on top of the AI and tech solutions out there fighting fraud,” he said. “Particularly against the backdrop of social engineering, we need to be aware that there is no ‘patch’ for the human tendency to trust.”

 

For further information on the FTC’s data, see theConsumer Sentinel Network’s Data Book 2022 in pdf or interactive format.