All About Scams

About Scams in General

Here are some statistics about scams in the United States:

• 38% of Americans are scammed at some point during their life and 62% of those lost money from the scam.
• 57% of Americans do not report when they are scammed.
  • They didn't feel like enough was lost to warrant a report.
  • They weren't sure how to.
  • They didn't want to (probably due to shame or embarrassment).
• On average, Americans have lost $2,647 to scams in their lifetimes.
• More than 1 in 10 have shared personal or financial information online with someone who turned out to be a scammer.
• In 2023,
  • $10 billion was lost to scams, the most ever reported to the FTC, a 14% increase over 2022.
  • It is $1 billion more than 2022 with a similar number of fraud reports.
  • $4.6 billion of that 10 billion was lost to investment scams, a 21% increase over 2022 (3.8 billion) and an almost 271% increase over 2021 (1.7 billion).
  • 2.6 million people filed scam reports with the FTC (Federal Trade Commission)
  • More money was lost to investment scams—more than $4.6 billion—than any other category.
  • more money was lost to bank transfers and cryptocurrency than all other methods combined.
  • Victims in the U.S. were the hardest hit, losing on average $3520 per victim.
  • 15% in U.S. say they or a household member was scammed in the past year
  • Lower-income and less-educated adults afflicted most .
  • Scams aimed at people 60 and older caused over $3.4 billion in losses - an increase of approximately 11% from the year prior.

 You can report fraud, scams, and bad business practices to the Federal Trade Commission (.gov) at ReportFraud.ftc.gov. or let us do it more thoroughly for you.

What is a SCAM?
A Scam is a dishonest scheme; a fraud; a plan to rob you.
Fraud is the wrongful or criminal deception intended to result in financial or personal gain for the person committing the fraud.
Extortion is the practice of obtaining something, especially money, through force or threats and is the basic tool of a scammer.

How SCAMs work

1. The scammer offers an outstanding ROI for a small investment

2. The fraud is in saying there are no withdrawal requirements once the investment period is over and then presenting them to block withdrawal. 

3. Extortion occurs when the threat is the possibility of loss of all funds unless the undisclosed requirements are met (more money is paid).

Why SCAMs work
The scam works because once the scammer has the victim's money the scammer uses the threat of the inability to collect the ROI or original investment to manipulate the victim to pay more. The victim is too afraid of losing their original investment and ROI to argue, the extortion amount is a fraction of what they have invested, and they do not know how or where to sue the investment company for their deception. So they pay the demand not realizing it can be repeated as often as the scammer wants.

Many people who satisfy the demands and get paid, and they will swear the website is legitimate but that doesn’t make this less of a crime to the people who refuse to or cannot match those demands.

Why It is Fraud

It is illegal:
- change an agreement's terms without consent from both parties

- to affirmatively make a false representation ("simple fraud.”)

- to withhold information essential to the decision making process (fraud by non-disclosure)

- to hide any part of the terms of an agreement from one of the parties

THE TWO TYPES OF FRAUD

Distinction between “Fraud” and “Fraud by Non-Disclosure”

Act of Commission vs. Act of Omission:

A wrongdoer (i.e., defendant) can commit a “fraud” by affirmatively making a false representation – sometimes referred to as a “simple fraud.” Simple fraud is saying that a person can get the ROI in the timeframe described and then blocking or denying the withdrawal when the timeframe ends

on new terms never originally disclosed .

Fraud is also committed by failing to make a statement — fraud by non-disclosure. The defendant MAY NOT remain silent about facts important to related to the decision to enter the subject contract. The fraud here is not disclosing there are additional monetary requirements in order to withdraw.

“Fraud by Non-Disclosure”

A person who enters a contract gives up something (e.g., cash, property, etc.) in exchange for something else (ROI). A “Fraud by Non-Disclosure” tends to occur prior to the execution of a contract – i.e., during the negotiation of the contract. The victim often finds himself or herself saying: “I would not have entered the contract (i.e., given-up something) had I known x, y or z.”

If you can say:
I would not have entered into the investment agreement had I known there would be additional requirements that for any reason would prevent me from withdrawing. (And now that I have invested there are withdrawal requirements). That is fraud by non-disclosure.

Proving Fraud by Non-Disclosure:

If you can say yes or True to the following statement, fraud by nondisclosure has been committed against  you.

1. Defendant concealed from or failed to disclose certain facts to the plaintiff.

2. Defendant had a duty to disclose the facts to the plaintiff (e.g., defendant created a false impression or defendant was a fiduciary).

3. Facts were material (i.e., important).

4. Defendant knew: (1) the plaintiff was ignorant of the facts, and (2) the plaintiff did not have an equal opportunity to discover the facts.

5. Defendant was deliberately silent when it had a duty to speak.

6. Defendant intended to induce the plaintiff to take some action or refrain from acting by failing to disclose the facts.

7. Plaintiff relied on the defendant’s nondisclosure.

8. Plaintiff was injured as a result of acting without the knowledge of the undisclosed facts.