The Scam Economy: $5.8 Billion in Consumer Losses

Tech advances help scammers evade enforcement

Andy Spears

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Photo by Ales Nesetril on Unsplash

The Washington Post reports on the harms to consumers of the “scam economy,” largely based in the world of robocalls and email scams.

We mostly think about scam calls and texts in terms of their financial costs to the people who fall for them. Consumers reported $5.8 billion in fraud to the Federal Trade Commission last year, a 70 percent increase from 2020. Falling for or engaging with one scam can lead to an increase in attempts. According to RoboKiller, an app for screening robocalls on phones, an average smartphone owner in the United States will get an estimated 42 spam texts and 28 spam calls a month. Once a number or email address spreads into more spammer databases, it can be bought and sold by the companies involved in the booming scam industry.

Robocalls take a financial and emotional toll on consumers. Although in most cases, such calls are illegal, the techniques used to evade regulation are ever evolving. Plus, most consumers lack the time, energy, or resources to undergo the type of legal action necessary to actually stop the calls or secure a fine.

Consumer advocates continue to pressure federal regulators to take action against these nefarious actors.

The National Consumer Law Center (NCLC) has made specific recommendations that they say would help protect consumers and hold bad actors accountable. These include:

  • Make all substantiated tracebacks public. Publication of the records of tracebacks will mean that the FCC, state attorneys general, and private litigants will all be able to identify those providers who facilitate the entry of these calls into the U.S. telecommunications system, as well as…

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .