Online purchase scams are now the riskiest form of consumer fraud, according to a new report from the Better Business Bureau.
In 2017, consumers reported more than 47,000 scams to BBB Scam Tracker. BBB analyzed this information using its unique BBB Scam Risk Index to determine the riskiest scams based on exposure, susceptibility, and monetary loss.
The top ten riskiest scams in 2017 were:
- Online purchase scam (up from #4 in 2016)
- Investment scam (up from #6 in 2016)
- Employment scam (no change)
- Advance fee loan scam (up from #5 in 2016)
- Fake check scam (down from #2 in 2016)
- Home improvement scam (down from #1 in 2016)
- Tech support scam (up from #8 in 2016)
- Travel/vacation scam (new to top 10, #12 in 2016)
- Family/friend emergency scam (no change)
- Government grant scam (new to top 10, #11 in 2016)
The biggest changes compared to 2016 data is tax collection scams decreased 60 precent in volume of reports and home improvement scams dropped from first to sixth riskiest. Young people continue to be at higher risk for scams, and susceptibility decreases with age, although dollars lost increases when victims are older.
There was good news, however in that susceptibility was down.
“The percentage of those reporting who actually lost money to a scam fell from 18.8 percent in 2016 to 15.8 percent in 2017. We also saw a 17-percent decrease in the median monetary loss, down to $228,” said Melissa Trumpower, director of programs and operations with the BBB Institute and co-author of 2017 BBB Scam Tracker Annual Risk Report: New Trends in Scam Risk.
The most common online purchase scams in 2017 were related to pets, clothing, cosmetics, electronics, and automobiles. The offer of free trials was a common tactic for these online purchases: 67 percent of scams involving cosmetics and 60 percent involving nutrition products mentioned a free trial opportunity.
Another significant increase was in the category of investment scams, which tend to target older age groups and come with a higher average monetary loss. This scam type came in as the second riskiest in 2017.