Last updated on August 1st, 2023 at 11:14 am
Last year, Americans lost more money to investment fraud than any other type of fraud. A total of $3.8 billion, according to the Federal Trade Commission, to be exact. A recent study conducted by Miami-based law firm Carson Law, which specializes in investment fraud, broke down just how big the issue is in each state.
While it may seem like the number of investment fraud cases is incredibly high, Wisconsin actually ranks near the bottom when it comes to how many of these incidents occurred in 2022. Wisconsin has the 44th highest rate of investment fraud with 3.3 complaints filed per 100,000 residents.
While the rate of investment fraud cases per 100,000 residents is on the lower end, the amount of money people lose to these scams is near the middle of the pack. Wisconsin ranks 18th with the average victim losing $123,688 per incident last year. In total, 198 victims lost a total of $24.4 million.
“The unprecedented rise in investment fraud is due to a combination of traditional and modern tactics, with the bulk of the increase coming from cryptocurrency-related scams,” according to the report. “In 2022, a record $2.57 billion was lost to crypto-investment scams. Traditional scams, including Ponzi schemes, pyramid scams, and real estate fraud, were also prevalent.”
There are also some new scams people should be aware of in 2023. Scammers are also leaning into the prevalence of artificial intelligence and creating deep fake videos and voice clones, according to the report. It pointed to one incident involving a woman searching online for investment opportunities. That woman lost $750,000 when fraudsters used a voice clone of Elon Musk, which directed her to a website where she thought she could buy shares of his company’s stock. Her money was stolen.
As for cryptocurrency scams, the report warns of initial coin offerings. ICOs are fundraising mechanisms for crypto startups. Scammers may create fake ICOs, websites and social media promotions to get people to invest.
“Investment fraud is currently the costliest type of fraud in America and the schemes are becoming increasingly complex as criminals fuse traditional tactics with online scams involving cryptocurrencies and artificial intelligence,” reads the report. “The best way to avoid investment fraud is to never send money or give personal information to any entity or individual unless you have thoroughly researched their background, met them in person, and consulted with a third-party expert.”