Consumers Lost $5.8 Billion to Fraud in 2021, but This One Move Can Help Protect You

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It’s a simple step that could spare you a world of heartache.

Keypoints

• Consumers reported losing over $5.8 billion to fraud in 2021, a 70% surge over 2020.
• Regularly checking your credit report can help you catch suspicious activity early on.

You’d think the coronavirus outbreak would’ve curbed fraudulent activity for a period of time, but not so. If anything, consumer fraud has increased substantially since the start of the pandemic, to the point where last year’s statistics are downright shocking.

In 2021, consumers reported losing more than $5.8 billion to fraud, according to the Federal Trade Commission (FTC). That’s an increase of more than 70% compared to the $3.4 billion lost to fraud in 2020.

Meanwhile, last year, almost 2.8 million consumers filed a fraud report with the FTC. That’s the highest number since 2001. And roughly 25% of those reports told of financial scams that led to an average loss of $500 per consumer.

However, that doesn’t tell the whole story. Not everyone who falls victim to fraud files a report about it. And not everyone who falls victim to fraud actually knows about it. All told, the damage for 2021 is probably far more extensive than $5.8 billion in losses.

A good way to prevent fraud

Keeping personal financial information secure is perhaps your greatest weapon when it comes to fraud prevention. That means not sharing sensitive data with random callers (even if they sound sincere when they ask for it) and shredding documents with personal information, like your Social Security number, rather than simply tossing them in the recycling.

But while those measures will certainly help, there’s still the possibility a company might experience a data breach and expose some of your personal data in the process. Consider the Equifax data breach that happened a few years back. Some consumers may still be dealing with fallout in the wake of that situation.

What’s more, while the Equifax data breach was made public, not every data breach follows a similar pattern. It’s possible your personal information is compromised but you’re never informed about it.

That’s why it’s so important to keep tabs on your credit — namely, by checking your credit report every few months. You’re entitled to a free copy of your credit report once a year from each of three major reporting officesand it pays to take advantage of that option.

If you review your credit report and notice an open line of credit or credit card account you don’t recognize, you’ll know to investigate — and do what you can to avoid taking a financial hit in light of a criminal’s actions. If you don’t check your credit report, you may not realize you’ve become a fraud victim until more damage is done.

Be especially vigilant now

Clearly, 2021 was not a good year for consumer fraud. It pays to be exceptionally vigilant about checking your credit report now.

The good news is that credit reports are free on a weekly basis through April 2022. So if you pull your report soon and spot something that doesn’t look right, you’ll still have an opportunity to follow up. In light of recent fraud numbers, we could see free weekly credit reports extended beyond April, so it pays to keep tabs on that situation.

Either way, checking your credit report is a crucial step in protecting yourself from fraud and mitigating damage if fraud has already taken place. If you can’t remember the last time you accessed your credit report, carve out some time to review that information carefully.