Business & Finance
US scam losses hit record levels as victims face systemic barriers to restitution
An investigation shows surging cyber fraud leaves Americans with heavy financial burdens, unexpected tax bills, and little corporate or legal recourse.
The short version
- Americans reported $15.9 billion in fraud losses to the FTC last year, while total actual losses are estimated to reach up to $200 billion.
- Victims frequently face dismissive law enforcement, demands for bank fees, and unexpected IRS tax bills due to rules disallowing fraud loss deductions.
- Unlike the UK, EU, Australia, and Singapore, the US generally does not hold banks or tech platforms liable for authorized scam transactions.
- Federal lawmakers have proposed the Tax Relief for Fraud Victims Act to restore tax deductions, though corporate liability reforms remain limited.
Key facts
- Reported US scam losses to the Federal Trade Commission climbed 25% year-over-year to $15.9 billion, with real losses estimated at up to $200 billion due to significant underreporting.[Associated Press]
- According to an AP-NORC poll, 98% of Americans suspect they have been targeted by scammers, and 30% report having personally lost money or personal information.[Associated Press]
- Provisions from the Tax Cuts and Jobs Act made permanent in 2025 prevent taxpayers from deducting personal theft and scam losses, causing some victims to owe tens of thousands of dollars in taxes on withdrawn retirement savings.[Associated Press]
- The Tax Relief for Fraud Victims Act has been introduced in Congress to reinstate tax deductions for scam losses.[Associated Press]
- Jurisdictions such as the United Kingdom, European Union, Australia, and Singapore have enacted or initiated rules holding banks, telecommunications providers, or tech firms financially liable if they fail to implement mandated fraud safeguards.[Associated Press]
- Under current US law, financial institutions are rarely held liable for transactions authorized by account holders, though JPMorgan Chase settled an elder abuse lawsuit with an 83-year-old victim for an undisclosed amount.[Associated Press]
What remains uncertain
- The precise volume of total financial losses nationwide remains an estimate, as government regulators acknowledge widespread underreporting due to victim embarrassment or lack of reporting channels.[Associated Press]
- The legislative prospects of the Tax Relief for Fraud Victims Act and whether the US will adopt corporate liability frameworks similar to foreign models remain uncertain.[Associated Press]