Americans lost $5.7 billion to investment scams in 2024, FTC says. Here's how to protect yourself

Consumers lost $5.7 billion to investment scams in 2024 — more than in any other type of fraud and up 24% from 2023, according to new data from the Federal Trade Commission.

Investment scams generally involve claims that a consumer will get big returns by investing in a hot new moneymaking scheme, according to the FTC.

Most people — 79% — who reported an investment scam to the FTC lost money, with the typical victim losing more than $9,000 on average, the agency said.

Since FTC data is based on consumer reports of fraud, the true scope of investment fraud is likely much higher after factoring in people who don't step forward.

"These scams are becoming a really huge problem for consumers," said John Breyault, the National Consumers League's vice president of public policy, telecommunications and fraud.

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Common investment frauds include "pig-butchering" scams, a name that references the practice of fattening a pig before slaughter.

The fraudsters often contact victims out of nowhere — perhaps via text, social media or a dating app — to try to develop relationships and gain trust before pitching investment opportunities that supposedly yield high returns, often in virtual assets such as cryptocurrency, experts said.

Though the investments may seem legitimate, criminals eventually disappear with the consumers' money.

It has gotten easier to commit these and other related frauds as artificial intelligence has helped make criminals more convincing, such as in using deepfakes, Breyault said. Deepfakes are manipulated videos or other images or sounds in which people can say and do things that seem real but are not.

Organized crime networks have also established scam operations centers across Southeast Asia, in countries including Cambodia, Laos and Myanmar, according to the Council on Foreign Relations. The centers are staffed by thousands of people, often illegally trafficked and forced to carry out these investment schemes globally, it said.

Criminal networks often use cryptocurrency to facilitate pig-butchering frauds because it lets them "move substantial funds easily, cheaply, and without much fear of detection," researchers at the University of Texas at Austin wrote in a recent research paper.

While there's no "silver bullet" to protect against fraud, there are ways consumers can reduce their risk, Breyault said. Here are three characteristics that run through many frauds, he said: