Consumers should take greater care when conducting transactions online. According to the 2018 BBB Scam Tracker Risk Report, consumers are more likely to lose money to scammers when they are approached online.

Scammers Take Advantage of Online Technologies

Technology continues to be exploited by scammers. As more consumers and businesses conduct transactions online, many individuals have begun to trust online communications—leaving them vulnerable to spoofed and impostered companies, and threats from seemingly legitimate sources. For the first time, websites eclipsed phone as the top means of contact for scams reporting a monetary loss in 2018. The second most common contact method of scams reporting a loss was via social media at 20 percent. This is significantly higher than reports from 2017, when only 13 percent of scams with a loss were perpetrated through social media channels. Email is also a common way for scammers to reach their victims.

Susceptibility is Rising Overall

Although the amount of money consumers lost to scams dropped again in 2018 (down from $228 to $152), consumers reported being more likely to lose money when exposed to a scam. This is known as susceptibility—and it rose from 15.8% of consumers reporting a loss in 2017 to 29.5% in 2018. That 87% increase is both dramatic and alarming. The combination of higher susceptibility and lower dollars lost is consistent with the increase of what we call online purchase scams. Online purchase scams are scams involving the purchase and sale of items either through illegitimate online retailers (that never intend to provide the goods purchased) or through direct seller-to-buyer sites. While online purchase scams are just one of many scams perpetrated using online communications and platforms, they are the number one most common kind of scam reported in 2018 at a whopping 20.6% of all BBB Scam Tracker reports.

 When Contacted Online, Consumers Are More Likely to Lose Money to Scammers

BBB Institute looks at a number of factors when analyzing the risk of scams so we can best tailor our consumer education and outreach to what’s currently happening in the marketplace. Because of the overwhelming increase of scams reporting a loss in 2018, we decided to compare loss by contact method—lumping all online contact methods together, as well as all phone-based contact methods and in-person contact methods. The result is the bar chart shown below. This definitively shows that while scams perpetrated by phone are still the most common (it’s hard to forget all the robocalls we receive daily), people are more likely to lose money when they are contacted online than by phone or in-person.

We Can Protect Consumers and Business Owners with Education

BBB Institute partners with a number of government agencies and other nonprofit organizations to help fight back against scammers and provide meaningful educational resources to communities in need. We believe a trusted marketplace depends on the successful, satisfying exchange of goods and services between reputable businesses and their customers. If you would like to join us in preventing consumers and small businesses from fraud—keeping more money in the pockets of consumers and trustworthy businesses—please visit https://www.bbbmarketplacetrust.org/get-involved or contact Institute@IABBB.org.