A Rising Threat: Tips for Staying Safe From Online Fraud

Last year, 515 Chicago residents with low or moderate incomes used our CivicSpace Financial Security Survey to tell us what issues of economic well-being mattered most to them. While the survey reconfirmed that problems like access to affordable healthcare and decent jobs with benefits were priorities, it also revealed that another subject was a top concern: protection from online fraud.

Protection from online fraud was considered important across all demographic groups and political orientations, with roughly 90 percent of respondents rating it as “important” or “very important.” These surprising results prompted us to dig deeper into the issue to better understand not only its scope but also what we can do to support members of our community.

As a first step in our work, we wanted to provide information gathered from expert sources on how to identify, avoid, and respond to fraud. Of course, educational resources alone are not enough to stop scammers from stealing people’s money and personal information. Tackling this issue effectively requires broad, multisector work to strengthen the infrastructure for preventing and recovering from fraud. At the same time, knowing more about fraud can empower people to take steps to avoid or lessen the financial and emotional damage it can cause.

The question about “online fraud” in our survey likely captured concerns over many different types of fraud. In their open-ended responses, survey takers described general worries about scammers attempting to rob people of their money or sensitive information.

There is a range of fraudulent activities–illegally opening accounts in someone else’s name, not delivering a product after payment, falsely posing as a bill collector or government official, etc.–that fit under this umbrella. Fraud tactics have also become more complex with time, as advances in artificial intelligence (AI) and other technologies provide scammers with more tools to deceive their targets.

The Federal Trade Commission (FTC), one of the main federal agencies responsible for upholding consumer protection laws, received 2.6 million individual reports of fraud in 2024, amounting to roughly $12.5 billion in total losses. More than 186,000 fraud and other reports and 43,000 identity theft reports were filed in Illinois alone, making the state tenth in the nation for fraud-related reports and ninth for identity theft reports. According to the Federal Bureau of Investigation’s Internet Crime Complaint Center (IC3), which focuses primarily on cyber-facilitated criminal activity, consumers and businesses lost $13.7 billion to online fraud last year. Many victims of scams also do not report their experiences to law enforcement for a variety of reasons, meaning that these figures understate the true level of fraud activity in the US.

Embedded within these data are broad patterns in exposure to fraud as well as individual stories of loss. For example, young adults under age 30 report losing money to fraud more often than older adults, but older adults that do report losing money tend to suffer larger losses than younger adults. Having money or information stolen can cause feelings of anger, shame, and frustration among victims, and many people report feeling judged by others after experiencing a scam. Research on fraud also reveals that people who recently went through a stressful life event or that feel socially isolated more often experience fraud. In addition, personal testimonies from victims highlight the severe consequences scams can have for people–especially those with limited means to recover.

Taken together, the evidence on fraud in the US makes clear that regardless of education, occupation, age, or background, anyone can get scammed.

One essential way of reducing the risk of fraud and identity theft is to understand common themes across different types of scams:

Pressure to Act Quickly 

Scammers often use various tactics to make targets feel a sense of urgency in order to pressure them into sending money. For instance, some might promise a prize only available for a limited time or threaten legal consequences for ignoring their calls or emails. Others might claim that their target will owe more money if they do not immediately pay a fake overdue bill. Regardless of the tactic, the goal is to prevent people from pausing before acting. Scammers know that their lies often unravel when people take time to stop and try to verify their claims.

Emotional Manipulation and Rapport-building

Interviews with victims of fraud, consumer advocates, and people who themselves have committed fraud have shown that emotional manipulation is a common feature of many scams. Scammers often try to provoke strong positive or negative emotions in their targets as a way to suspend their judgement. For example, they may pretend to be a relative, friend, or romantic interest in need to get their target to send money. These and other kinds of imposter scams were the third most common category of fraud reported to the FTC last year.

Requests for Specific Kinds of Payment 

Many scammers ask targets to send them money through payment methods that are hard to retract once they are sent. They may request payment through gift or prepaid debt cards, wire transfers, peer-to-peer payment systems (e.g., Cash App, Venmo, Zelle, etc.), or cryptocurrency. An unexpected request to send money using any of these kinds of payment methods is one of many common signs of a scam.

Requests for Personal Information

Scammers may ask for sensitive personal information such as social security numbers or online passwords. Once they have this information, they can gain access to major accounts or open new ones to make purchases in another person’s name.

As mentioned, fraud tactics have also shifted over time, especially as technology continues to advance. Certain AI tools can allow more scammers to impersonate family members, law enforcement officials, celebrities, and other people to get their targets to send them money. Some scammers may make fake social media accounts pretending to be friends of loved ones in order to advertise sham products or investments. Job opportunity scams, where people post fake job listings or contact others with false recruitment offers, have also risen dramatically in recent years. These advancements make it all the more important to stay informed about the latest scams and ways to avoid them.

There are a few important ways people can help reduce the risk of them and their loved ones getting harmed by scammers:

• Do not share sensitive personal information, such as account passwords or Social Security numbers. Verify that any organization asking for information or money is actually who they say they are.
• Take steps to secure accounts and personal information. Set up multi-factor authentication. Make sure devices are up-to-date with the latest security updates.
• Do not click on links or scan QR codes from unknown sources. They could give scammers access to personal information or the device itself.
• Pause before acting. If a job opportunity or request for information or money seems suspicious, talk to a trusted friend, colleague, or loved one about it. Also, consider whether the person or organization is trying to provoke an emotional response or immediate action. These are common tactics used among scammers.
• Stay informed about the latest scams. Consumer protection organizations like the FTC and AARP regularly publish information to alert people about recent fraud activity reported to them.
• Sign up for the national Do Not Call Registry. This can decrease the number of unwanted calls and texts from telemarketers.

Anyone can get scammed–no matter their age, level of education, or occupation. If someone suspects they or a loved one has lost money to a scam, there are several actions they can take to respond.

Document and Report It

Regardless of whether money or information was lost to a scammer, one crucial step after the scam encounter is to document and report it.

Consumer protection agencies often recommend reporting the crime to the FTC and local law enforcement. The FTC provides two resources to report consumer fraud and identity theft: Reportfraud.ftc.gov and IdentityTheft.gov. Reports are then shared through its Consumer Sentinel Network, a network of roughly 2,800 law enforcement offices working to address fraud in their areas.

If someone suspects they encountered a scammer, it is also helpful to report the crime to other public and private consumer protection organizations listed below. These organizations typically use the reports submitted to them to warn the public about scams, support law enforcement agencies investigating fraud, and develop information about critical ways for people to stay safe.

Consumers can often report several different kinds of scams to the same organization, but some, like IC3, focus on specific categories of criminal activity, such as fraud committed online or by businesses. USAGov, a federal program responsible for providing information about available government services, offers a user-friendly tool to help people find out where they should report different types of fraud.

Take Steps to Prevent Further Damage

Losing money or personal information to fraud can cause lasting financial and emotional harm for victims, especially if they are already struggling to make ends meet.

People who sent money to scammers should immediately reach out to the company or service (e.g., bank, credit card company, post office, money transfer company, etc.) they used and report that the transaction was fraud. Although unfortunately it is often difficult for people to get money back once they send it, they should still ask the company to reverse or cancel the transaction.

Additionally, there are a few other steps people should take to protect against further damage and get on a path toward recovery:

• Change account login information. Changing the passwords to major accounts (e.g., banking and credit accounts, online retail accounts, emails, social media, etc.) can help prevent scammers from accessing them going forward.
• Close new accounts. Shutting down any accounts that scammers opened can reduce the risk of greater financial harm.
• Talk about it. Discussing experiences of fraud may help victims process the impact of the fraud as well as inform other community members.

For people whose personal information was stolen, they should also:

• Set up a fraud alert. Victims of identity theft should place a fraud alert on their credit report with one of the three credit reporting companies (Equifax, Experian, and Transunion). That company then notifies the other two about the alert. After the alert is placed, creditors must take steps to verify the identity of the person with the fraud alert before opening new accounts or issuing credit.
• Freeze their credit record. Consumers can also freeze their credit record to prevent any new accounts from opening while the freeze is in place. The three reporting companies must be contacted individually to place a freeze with each one.
• Monitor credit reports. AnnualCreditReport.com is authorized to provide people copies of their credit reports once a week for free.
• Develop a recovery plan at IdentityTheft.gov. Victims can learn about more steps they can take to recover by using the FTC’s main educational resource on identity theft, IdentityTheft.gov.

At a time when fraud reports rise each year and scammers’ tactics are becoming more sophisticated, it is especially important to share resources that can help people keep their personal information and money safe. Our goal was to summarize some of the key pieces of advice that speak to the concerns community members voiced in our survey last year. The information we provide here draws on publicly-available guidance from major consumer protection organizations across the public and private sectors.

As experts have pointed out, fighting consumer fraud demands more than just educating the public about scams. It also involves strengthening consumer protection infrastructure as well as pushing back against efforts to dismantle existing protections. Equally important, it requires more research on the experiences of fraud victims and the barriers to stopping scammers before they target people.

Work must also be done to eliminate stigma against victims of fraud. Eliminating stigma could lead more people to report their experiences and improve the quality of information that authorities have to investigate fraud. Additionally, it could help lessen feelings of shame and isolation that victims often experience.

These and other efforts are crucial for creating more effective safeguards against all kinds of scams and identity theft. Along with this work, information on identifying, avoiding, and responding to fraud can help support people as they work to protect themselves and their loved ones.