2020 was a record year for investment and cryptocurrency scams. Almost 26,500 cases were reported to the government — and those cases resulted in a loss of $419 million. 2021 is on pace to exceed those numbers.
The Motley Fool wanted to dig deeper into the rise of investment and cryptocurrency scams to understand how they happen, who they target, and how investors can better avoid them.
To that end, we surveyed American adults who had been targeted by an investment or cryptocurrency scam and dug into data gathered by the Federal Trade Commission (FTC).
We found that the use of cryptocurrency and social media by scammers has skyrocketed, many people don’t report when they’re targeted by a scam, and almost 75% of people targeted by fraud or a scam are less likely to invest in the future.
- 2021 will be a record year for investment fraud: 14,079 investment scams were reported to the FTC in the first quarter of 2021, and victims lost $215 million in this quarter alone. Reports, the percentage of reports that reported a loss, median losses, and total losses are on pace to exceed those reported in 2020, which significantly surpassed 2019 numbers.
- People under 40 are most likely to be targeted: People aged 30–39 are most likely to be targeted by scammers. The 20–29 age group reported the second-most cases. Those aged 40–69 reported higher losses from fewer cases.
- Fraud and scam education needs to improve: 45%…