Think You Can Identify Scams? Most Cannot!

71% of consumers are confident they can identify scams, but 67% fell for a scam last year.

According to a study by ScamAdviser, of 4,300+ consumers, scammers reach nearly everybody. 62% of the survey participants are certain that they have been exposed to a scam in the last year. 20% think they may have. Only 12% are certain that they have not been approached.

There is a huge gap between how good consumers think they are at identifying scams and the reality. 67% of the respondents who had been targeted by a scam said they had fallen for it. However, in-spite of this high level of victimization, 71% of the respondents believe they are (very) confident identifying a scam!

Figure 1: The extent to which consumers are confident to identify a scam if they came across one

42% approached more often by scammers

The general perception is that the number of scams is increasing. 42% stated being approached (far) more often. Only 27% felt that they were exposed to less scams in the past year. Phishing (35%) is still the most reported ‘popular’ scam. But fraudulent (cryptocurrency) investment schemes (25%), unexpected wealth scams (24%), the non-delivery of a products ordered online and the delivery of fake or inferior goods sold online (both 21%) are gaining more and more ground.

Greed is not the most common cause

Consumers get scammed for different reasons. 45% of the victims of scams do not identify the scam until it is too late. Another 24% state a lack of knowledge to identify the scam as primary reason for having fallen for it. Greed and “taking a gamble” are named by 31% of the users as primary reasons for becoming a victim.

There are several reasons why consumers keep falling for scams. Many of the respondents check for scams using unsafe methods. Specifically, 41% of the consumers check reviews on other websites, which are increasingly fake. 19% checked for a website’s SSL certificate which gives no information on the trustworthiness of a website at all. Finally, 10% stated that they never check the website’s legitimacy at all.

Investment scams are on the rise

Most consumers who fell for a scam lost money (56%). 16% lost personal data, 6% were extorted, whilst 3% ended up participating in an illegal activity like money mulling. The amount reportedly lost differs from $1.59 to nearly $700,000. The median amount lost was $400. In line with the rise of cryptocurrency scams, more victims report their losses in bitcoins and not their national currency.

Scammers are safe as consumers fail to report

Only 44% of the users report a scam when they are confronted by it. They primarily report the scam to review websites (21%), followed by the local police and the website’s hosting company and consumer protection authorities (each 14%). The national police is the least popular reporting channel (6%).

Of the 46% who claimed not to report a scam, 23% do not know to whom to report the scam to. 15% claim that reporting a scam is too complicated whilst 11% believe that reporting a scam would not make a difference.

Figure 2: Methods consumers use to check if a website is legitimate or a scam

Finally, the participants state that law enforcement agencies and governments are not doing enough to fight scams. 65% of our respondents perceived their police and governments efforts as (very) poor.

From this survey, ScamAdviser draws two key challenges that require addressing urgently. Firstly, consumers are either using outdated information or are simply not checking whether websites are fraudulent. Secondly, more must be done by law enforcement to improve public perception around fighting scams and to reassure the public that reporting a scam is important.