A report by Global Anti-Scam Alliance (GASA), in collaboration with Feedzai, has revealed that scam victims worldwide have lost over $1.03 trillion in the past year.
This staggering amount surpasses the GDP of countries like Switzerland, Poland, and Taiwan, underlining the scale and severity of global financial fraud.
For context, only 19 countries globally have a nominal GDP exceeding $1 trillion, according to the International Monetary Fund (IMF).
According to the report, scam is most dire in Brazil, Hong Kong, and South Korea, where citizens encounter scams almost daily.
In the U.S., the average scam victim reported a loss of $3,520, the highest per capita loss, followed by Denmark and Switzerland.
Investment scam in Nigeria
Highlighting the different types of scams dominating each country, the report noted that shopping scams dominate in Kenya and Nigeria, while investment scams are rampant in Nigeria.
- In contrast, South Korea and Vietnam report the lowest levels of online shopping scams.
- Identity theft remains a significant concern in Australia and Mexico, with both countries showing a 25% victimization rate.
Commenting on the report, the Co-Founder, Chairman, and CEO of Feedzai, Nuno Sebastião, highlighted the role of financial institutions and technology in increasing consumer confidence.
“Consumers are becoming smarter at catching scams themselves. This year, 67% of respondents expressed confidence they could spot a scam.
“This strong display of confidence is a testament to banks’ and others’ efforts to educate consumers on the red flags to watch for that could be a scam,” he said.
Unreported losses and emotional impact
GASA’s data indicates that over two-thirds (70%) of scam victims do not report their financial losses to authorities, which compounds the difficulty of curbing such schemes.
“Beyond financial damage, scams have serious psychological effects on victims, including feelings of vulnerability, fear, and mistrust,” GASA commented, underscoring the need for holistic fraud prevention efforts that address mental well-being as well as monetary losses.
- Social media, text messages, and phone calls are the primary methods used by scammers, with platforms like WhatsApp, Instagram, and Gmail often serving as initial contact points.
- The rise of AI technology has also empowered fraudsters to create highly convincing fake images, videos, and voices, increasing the reach and effectiveness of their tactics.
- According to the report, scams represent a significant economic burden, equivalent to 3-4% of GDP in several developing countries, such as Pakistan, Kenya, and South Africa.
In more developed nations like Italy, France, and the Netherlands, the impact is lower but still noticeable, accounting for roughly 0.2% of GDP.
The 2024 Global State of Scams report, based on responses from 58,329 consumers, highlights that nearly half of the world’s population faces scam attempts at least once weekly.