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Have you ever received a text or email from a Nigerian prince claiming to have millions of dollars trapped in a bank account and he wants to send it to you? Or how about a message supposedly from the IRS or some other government agency claiming you must pay them now or they will arrest you? Of course most people have experienced one or probably several attempts like these by scammers to steal money from unsuspecting victims.
Worse news may be that an estimated 10 to 20 percent of Americans have been victims of some sort of scam. Consumer privacy is a myth. Everyone’s information is available to the highest bidder.
The scammer industry is a hidden global business. In many parts of the world, scam operations have become full-scale companies, complete with managers, marketing research and human resource departments, and performance targets.
Many scam centers rely on technology to reach thousands of potential victims each day. Phone calls, emails, text messages, and social media are the most common tools. A scammer may pretend to be a bank employee, a government official, or a customer service representative from a well-known company. Others pose as romantic partners online, building trust over weeks or months before asking for money.
These scams are carefully designed using psychological tactics. Fear, urgency, and trust are the most common methods used to convince people to act without thinking.
In recent years, the scammer industry has become more sophisticated. Some groups use stolen personal data to make their stories more believable. Others use computer programs that automatically dial phone numbers or send thousands of messages at once.
Cryptocurrency has also made it easier for scammers to receive money without being traced. Because these crimes often cross international borders, it can be difficult for law enforcement agencies to track down the people responsible.
As with many things, Artificial Intelligence (AI) has made scammers more efficient. Being able to replicate the voice of a loved one and feign a kidnapping or some other situation is one of the tools scammers use. The good news is AI is also being used to investigate and stop scammers.
The Federal Trade Commission (FTC) collects data on scams of all types, and works with other government agencies to find and prosecute scammers. The scammers and the law enforcement agencies are in an arms race to keep up with the technology.
While it is difficult to measure due to lack of reporting by victims, it is estimated that in 2025 losses to scams in the US were between $31.3 billion and $195.9 billion. This is a 25 percent increase from 2024.
In addition to financial loss, psychologists say scams erode trust. They erode trust in legitimate communication, in systems that people need to rely on, and in other people.
One of the problems the FTC has in prosecuting scammers is that the vast majority of scams are perpetrated by transnational criminal organizations. They operate outside the US and the jurisdiction of the FTC.
Social media sites are also being encouraged by law enforcement to help catch scammers. Social media companies have the technical capacity to identify and flag scams. But for these tech companies scam ads are a significant source of income and they have been accused of dragging their feet when it comes to helping to stop scammers.
Despite the growth of the scammer industry, awareness is one of the best defenses. Banks, technology companies, and governments continue to warn people about common scams and encourage them to verify information before sending money. The more people understand how these operations work, the harder it becomes for scammers to succeed.
Perry Haan is a Watertown native. He is Professor of Marketing at Tiffin University in Ohio. He can be reached at [email protected].
