The FBI’s Internet Crime Complaint Center (IC3) released the 2020 Internet Crimes Report, showing a sharp increase in cyber-enabled crime, business email compromise, and phishing scams. The report shows that cyber perpetrators found new opportunities to exploit people’s data during the social disruption caused by COVID-19 in 2020. Below you will find a summary of the most important findings and trends from the IC3 report and a list of strategies to protect yourself and your customers from fraud. We also include details on how to recover funds if you or someone you know gets defrauded.
IC3 Report Summary
In total, the IC3 received 791,790 total complaints in 2020, a 69% increase from the year before. That’s an average of over 2,000 complaints per day or one every 43 seconds.
Reported losses due to internet crime totaled $4.2B last year, a 20% increase from 2019. Of that amount, $1.8 billion, or 43% of all reported loss, was attributable to Business Email Compromise (BEC).
In looking at BEC’s average loss per reported crime, there was a 29% increase from 2019. This number takes into account the number of victims and the amount lost. It is alarming to see that BEC’s reported loss continues to increase in addition to the average loss per reported crime.
Phishing-related scams increased a staggering 110% from the year before as cyber fraudsters exploited the social and workplace impact of COVID-19.
Take away: Cyber perpetrators continue to adapt their strategies to take advantage of changes in the lives of people and business operations. As cybercrime continues to increase, social engineering, BEC, and higher value targets summarize that 2020 was the worst year on record.
Who’s At-Risk for Fraud?
While all age categories reported cybercrime losses, 45% came from individuals under 50. Proving that even younger, tech-savvy generations are not immune to the risk posed by the sophistication of today’s cybercriminals. Here is a breakdown of losses by age:
- Under 20: 23,186 complaints and $70,980,763 in losses.
- 20-29: 70,791 complaints and $197,402,240 in losses.
- 30-39: 88,364 complaints and $492,176,845 in losses.
- 40-49: 91,568 complaints and $717,161,726 in losses.
- 50-59: 85,967 complaints and $847,948,101 in losses.
- Over 60: 105,301 complaints and $966,062,236 in losses.
What States Reported the Most Victim Losses?
The IC3 received reports of cybercrime from all fifty states but here’s the list of the top ten states where the highest amount of losses were reported:
- California: $621,452,320
- New York: $415,812,917
- Texas: $313,565,225
- Florida: $295,032,829
- Ohio: $170,171,951
- Illinois: $150,496,678
- Missouri: $115,913,584
- Pennsylvania: $108,506,204
- Virginia: $101,661,604
- Colorado: $100,663,897
Real Estate Fraud Losses
Real estate continues to be a top target for cyber scammers as they seek to divert incoming and outgoing wire transfers related to real estate transactions.
In 2020 there were over 13,638 victims of real estate related crimes. This is an increase from 11,677 victims in 2019 and 11,300 victims in 2018.
2020 reported real estate fraud losses totaled $213,196,082.
The dramatic shift to remote work environments and digital payments are being used by cybercriminals to socially engineer parties in a real estate transaction and trick them into sending funds to fraudulent bank accounts.
Recently, we sat down with Taylor, a victim of real estate wire fraud. As a CPA and second-time home buyer, he felt less likely to fall victim to fraud. And while he wired his earnest money deposit safely to his title company at the beginning of the transaction, he was defrauded for his life savings of nearly $80,000 when a fraudster spoofed his title company and convinced him to wire funds to a fraudulent account. CertifID was able to step in and help him recover his funds, but not everyone is that lucky. He shared his story and hopes real estate professionals will help better protect their clients from the same thing happening to them. Hear Taylor’s story on being a wire fraud victim.
How to Recover Stolen Funds
Since the beginning of 2021, CertifID has led sixteen successful funds recovery efforts returning over $3.9 million to consumers and title companies that were victims of wire fraud. Unfortunately, this year is off to a staggering start regarding BEC and real estate transactions with evidence of mortgage payoff and buyer cash to close wires at risk of being stolen.
Our founder and CEO, Thomas Cronkright, is a large title agency owner and a wire fraud victim himself. So he knows first hand what it is like to experience fraud at the hands of cybercriminals. While we hope it is never the case, we have created a complete guide on how to recover from wire fraud to help provide steps on what to do if you believe you’ve been a fraud victim.
If you or your customer suspects that funds have been stolen, here are the steps you need to take to recover:
- Step 1: Contact your bank and initiate a “SWIFT recall “on the wire transfer that left your account.
- Step 2: File a complaint with the FBI’s Internet Crime Complaint Center (IC3)
- Step 3: Contact your local FBI field office and provide the IC3 complaint number
- Step 4: Contact all banks that may have also received your funds
- Step 5: Contact local authorities and file a police report
- Final step: Contact your security team, IT department, or consultant and initiate “The Information Technology Kill Chain”
How to Protect You and Your Customers from Fraud
While there is no silver bullet to cybercrime prevention, there are three pillars that will lower the risk of being a victim – awareness, education, and communication.
Creating awareness around cybercrime and educating yourself and your customers is the first line of defense.
Social engineering, phishing, and other cyber-scam strategies are becoming more advanced, believable, and less noticeable.
Gone are the days when a scam could be automatically identified or appear completely obvious (remember the good old Nigerian prince scams?)
Nowadays, cybercriminals are becoming slick in their process; they’re building out advanced scams that can trick even the savviest internet users. Remember Taylor’s story?
No matter your age, occupation, or location, you could be at risk.
Another way to help protect yourself is education. Do your due diligence, research, stay up to date on cyber trends, refine your strategies and invest in solutions that keep you safe. Anytime you are making decisions involving large amounts of money, always take time to review everything and never do anything when you’re rushed.
The last way to help protect yourself is communication. Make sure everyone is aware of the risks associated with emails, wire transfers, and potential spoofed identities. Everyone needs to be on high alert. If anyone in the situation feels like something is off, they need to communicate that to everyone else. Even if it is a false alarm, it is better to be alarmed for a few minutes versus not thinking twice and losing a large amount of money to a cyber fraudster.
If you’re looking for additional information on fraud, make sure to check out our Resources page.