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The $12.5 Billion Lie: Inside the Expanding Fraud Economy

  • Writer: Get Grifters
    Get Grifters
  • Oct 8
  • 7 min read

How digital scams quietly siphoned more from Americans in 2024 than ever and why trade bans, tariffs, and enforcement postures may impact the next wave.


A dramatic, hand-drawn cinematic illustration: a dark digital landscape where giant dollar signs drip through screens, hands reaching for money, binary code raining.

I. The Unseen Surge

Relatively few headlines spotlight the latest FTC data — but the numbers demand attention. In 2024, Americans reported losing more than $12.5 billion to fraud, a 25 percent jump over 2023 levels.¹ This leap is not primarily because more people reported fraud (reports held roughly even), but because a significantly larger share of those who did report actually lost money.²


Of those who filed fraud complaints, only 38 % reported a monetary loss, up from 27 % the prior year.³Investment scams alone accounted for $5.7 billion in losses, the single largest category.⁴ Imposter scams followed at $2.95 billion.⁵ In the same year, the FTC’s Sentinel network received about 6.5 million reports of fraud, identity theft, and other consumer-protection issues, a figure up ~20 % from the prior year.⁶ Roughly 2.6 million of those were fraud-oriented reports.⁷


These figures are more than alarming, they reveal a shift in the shape of consumer risk. The playing field has changed.


II. Anatomy of a Scam

To grasp how fraud has scaled so fast, we need to look past the big dollar amounts and into the structure of scams:


Payment methods: bank transfers & crypto

The largest losses are tied to bank transfers / online payments, totaling $2.09 billion in 2024.⁸ Cryptocurrencies followed at $1.42 billion.⁹ Why? Because once money leaves your control, recovery becomes extremely difficult.


Channels: social media, phone, text

Scams initiated via social media led to $1.9 billion in losses, the highest among contact methods.¹⁰ Meanwhile, text-based scams caused $470 million in losses, a fivefold increase from previous benchmarks.¹¹ Scammers have weaponized every medium: calls, emails, DMs, even QR-codes in posts.


Demographics & age

Younger Americans (ages 20–29) report fraud more often — 44 % of their reports involve monetary loss, but their median loss is often lower (≈ $417).¹² Older adults report fewer incidents but when they lose, their median losses are greater: those aged 70–79 report a median loss of $1,000; 80+ report $1,650.¹³ In total, older adults (70+) reportedly lost $2.3 billion in 2024 alone.¹⁴


State & regional variations

Fraud reports per capita vary by region. Florida, Georgia, Delaware, Nevada, and Maryland top the list for fraud incidents per 100,000 population.¹⁵ Identity theft also shows stark geographic patterns.¹⁶


Taken together, the data show that fraud has moved from individual opportunism to systematic predation: cross-border operations, automated triggers, and AI tools.


III. The Political Crosswinds: Tariffs, Enforcement & Trade Fraud

While consumer fraud and scams occupy the foreground, another layer of risk lurks behind the scenes: trade fraud, tariff evasion, and cross-border deception. In a climate of high tension, geopolitical maneuvering, and shifting trade policies, fraud isn’t just about tricking individuals, it’s about eroding national revenue and economic fairness.


A new Enforcement Age

In 2025, the U.S. DOJ and Department of Homeland Security announced a Trade Fraud Task Force with sweeping authority to enforce tariffs and customs rules more aggressively.¹⁷ Their powers include civil actions under the Tariff Act, criminal prosecutions, and use of the False Claims Act (FCA) to penalize misreporting or deception.¹⁸


Under the current administration, the DOJ has elevated tariff evasion as a top priority.¹⁹ The Criminal Division has restructured to absorb personnel from consumer protection to focus on trade fraud.²⁰ In one example, a plastics importer in 2025 settled for $6.8 million under FCA claims for underpaying customs duties.²¹


Why it matters

Tariff evasion isn’t just bookkeeping: it distorts competition, undermines domestic producers, and shifts the tax burden onto compliant businesses and consumers. In effect, illicit trade becomes a hidden tax on the economy.


This also creates opportunity for cross-border fraud networks. Scammers can exploit loopholes, misclassify goods, or disguise channels to evade scrutiny all while funneling funds across jurisdictions. The same networks that commit B2C scams can dip into B2B trade fraud.


Given this overlap, enforcing consumer fraud isn’t enough, regulators must bridge across customs, commerce, and law enforcement domains.


IV. The Mechanics of Deception in the Fraud Economy

What allows fraud to scale so dramatically? Three structural accelerants:


1. AI & Algorithmic Leverage

Fraudsters now deploy chatbots, deepfake audio, automated call systems, and generative text to mimic human voices and behaviors. The deception becomes more believable, scalable, and personalized.


An academic paper on digital deception argues that modern fraud is less about the tools themselves and more about patterns of exploitation — data-tracking, micro-targeting vulnerable populations, and exploiting regulatory gaps.²² The tools evolve, but the structural advantage remains with those who can misuse data at scale.


2. Underreporting & the Shadow Economy

The $12.5 billion figure is only what gets reported. We know that most fraud goes unreported. Analysts estimate that actual losses may be 10 to 15 times higher.²³ The differences in recovery, shame, or disbelief mean many victims never tell.


3. Layered & Multi-Step Scams

Modern scams often aren’t one-shot. They unfold in stages: initial trust → incremental asks → cross-scam layering. A consumer is first contacted via social media, then asked to move the conversation to text, then persuaded to pay via crypto, then ghosted. Each step compounds difficulty in tracking or reversing the fraud.


Surreal hand-drawn digital artwork showing a lone silhouette watching an endless conveyor belt of glowing AI-generated screens, symbolizing algorithmic deception and data overload.
The machinery of modern fraud: synthetic content multiplying faster than human oversight.

V. Human Costs & Cultural Impact

Numbers alone don’t capture the pain. The psychological burden of fraud is profound: shame, distrust, anxiety, and isolation. Many victims never admit to family or friends. Some are left financially devastated, credit-scarred, or emotionally wary of future transactions.


Scams also fracture trust in institutions. When consumers feel powerless, public responses often blame “user error”, even though the power imbalance is structural. Scammers thrive in the gray space between regulation and enforcement.


There’s a generational betrayal, too: young adults raised in a digital era now find themselves constantly guarding against deception, rather than benefitting from connectivity. Meanwhile, older adults bear disproportionate financial harm.


VI. The Ban Paradox: How Tariffs & Border Policy Could Become Fraud Shields

Here’s where the political dimension becomes tactical: When a country enacts bans or sanctions on imports/exports, the enforcement burden shifts to compliance and deception becomes more lucrative.


  • Ban circumvention: Goods prohibited from one country may be routed via third nations or mis-declared to dodge the ban.

  • Tariff misclassification: Luxury goods, electronics, or materials may be deliberately mislabeled to avoid steep import duties.

  • Customs fraud networks: Smuggling, ghost shipments, and falsified invoices become critical tools in gray trade.


Under high-tariff regimes, the incentive to cheat skyrockets. The more pressure applied to formal channels, the more rent-seeking arises in illicit corridors. In extreme cases, ban-driven evasion becomes indistinguishable from state-level corruption or shadow trade.


Thus, in a world where America bans or heavily taxes goods from rival nations, the fraud economy bleeds into trade policy. The new battleground isn’t just between countries, it’s between legal lines and illicit subversion.


VII. Paths Forward: Enforcement, Policy, & Public Defense

The crisis demands multi-tiered strategies:


1. Integrated regulatory approach

Consumer protection agencies, customs divisions, commerce departments, and financial regulators must break silos. Fraud is no longer neatly confined to email or phone—it flows across jurisdictional lines.


2. Whistleblower incentives & FCA usage

The expansion of the False Claims Act in trade fraud gives private actors leverage to bring cases on behalf of the government. Incentivizing whistleblowers can shine light into opaque supply chains.


3. AI surveillance & defense tools

Just as fraudsters use AI, defenders must deploy AI for anomaly detection, pattern recognition, and real-time alerts. Public-private collaboration is key — banks, telecoms, and platforms should share telemetry.


4. Public education & reporting ease

Many victims don’t report due to doubt, shame, or complexity. Making reporting easier and offering clear recourse (for instance, with FTC or state agencies) can shrink the shadow economy.


5. Trade compliance reform

Tariff rules, classification systems, customs audits, and supply-chain transparency must be strengthened. Countries should adopt blockchain-like tracking or mandatory digital traceability to reduce fraud arbitrage.


VIII. What Comes Next

  • The reported $12.5 billion is a signal, not a ceiling.

  • As enforcement and trade policies tighten, fraud will follow the path of least resistance into zones regulators neglect.

  • The dividing line between “consumer fraud” and “trade fraud” is dissolving.

  • We are witnessing the emergence of a cross-domain “fraud economy” that spans individuals, corporations, and national borders.

“Scams don’t just take your money — they rearrange trust.”

In this new battlefield, the consumer is no longer isolated. They are part of a system of flows, data, capital, compliance all shifting at the edges of law and technology.


Key Takeaway

Fraud in America is no longer a crime of individual trickery. It’s a structural engine accelerated by AI, enabled by weak enforcement, and entangled with global trade dynamics. The $12.5 billion loss in officially reported fraud is a warning: the next frontier of theft will blur across consumer and trade systems, and the only responses worth scaling must be systemic.


Get Grifters tracks the brands and policies reshaping online trust. Subscribe for weekly investigations and exclusive analysis.


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