FBI Report Reveals Over $12.5B Lost To Online Fraud In 2023

The Federal Bureau of Investigation (FBI) has disclosed a staggering increase in online fraud losses, raising alarms over the growing sophistication and prevalence of cybercrimes in the United States.

What Happened: The American public reported losses exceeding $12.5 billion due to online fraud in 2023, marking a 22% increase from the previous year, as per the FBI’s latest Internet Crime Report, The Record reported on Thursday.

The FBI’s Internet Crime Complaint Center (IC3) compiled the data, which showed a surge in fraud cases with over 880,000 complaints logged. The actual losses may be significantly higher as the report only accounts for reported incidents.

Investment fraud topped the list of digital crimes, soaring to $4.57 billion, which is a 38% hike from the prior year. Cryptocurrency investment fraud was particularly damaging, accounting for $3.94 billion of the total investment fraud losses.

The FBI highlighted the prevalence of sophisticated scams like “pig butchering,” where victims are lured into fraudulent cryptocurrency investments by criminals often operating out of Southeast Asia. These scams have contributed to the tripling of annual investment fraud losses since 2021.

According to the FBI, different age groups faced different types of cybercrimes, with those aged 30 to 49 being the most affected by investment fraud. Business email compromise (BEC) scams were the second most costly, resulting in $2.9 billion in losses.

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The FBI also noted an increase in scammers using cryptocurrency platforms and third-party payment processors to quickly disperse stolen funds, emphasizing the need for enhanced security measures like two-factor or multi-factor authentication.

Ransomware incidents also increased, with adjusted losses jumping 74% to nearly $60 million. Nearly 1,200 complaints came from critical infrastructure sectors, with the healthcare sector reporting 249 ransomware attacks.

Despite the grim statistics, the FBI’s Recovery Asset Team (RAT) managed to freeze over $538.39 million following fraud complaints. They successfully recovered more than 70% of funds in cases where they filed Financial Fraud Kill Chain (FFKC) requests to intercept large international wire transfers from U.S. accounts.

Why It Matters: The alarming rise in online fraud losses underscores the severity of cyber threats facing the nation. Federal Reserve Chair Jerome Powell recently emphasized the ongoing cyber threats to American banks, acknowledging that the battle against cyberattacks is a daily effort that requires massive resources, not only for banks but for all entities supporting the financial system.

This sentiment is echoed globally, as demonstrated by the historic cyberattack in France, where the personal data of over 33 million people was compromised in the country's largest data breach. The incident targeted French medical insurance service providers and involved using health professionals' logins to access the system.

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