Is Your State a Hotspot…for Fraud?

Nevada, Rhode Island, California, Oregon Prone to Scams


Source: SEON

By Roy Urrico


Finopotamus aims to highlight white papers, surveys, analyses and reports that provide a glimpse as to what is taking place and/or impacting credit unions and other organizations in the financial services industry — either directly or indirectly.


Here we have a pair of reports that offer insight into U.S. locations prone to scams and fraud. Is your credit union operating in one of them?


Business Fraud Hotspots


Research, undertaken by London-based anti-fraud experts SEON, revealed the states with the highest rates of business fraud per 100,000 people in 2021. (The study, “UK and US Business Fraud Hotspots in 2021,” also looked at UK flashpoints but we only focused on the U.S. here.)


The study extracted data from the Federal Trade Commission and recorded both the total number of fraud reports in each state, as well as the total number of business or corporate fraud cases. It then compared this information to population data from Census.gov for the U.S. This gave SEON the relative rates of fraud and business fraud in each geographical area, allowing it to compare statistics while taking into account differences in population size. SEON also looked at the average cost of fraud and business fraud per head using the same sources.


“Thankfully, there are many things you can do to protect yourself and your business from criminal intentions,” said Gergo Varga, SEON's senior content manager. “From virus protection and anti-ransomware tools to specialist fraud prevention systems, there is a digital security option for every business scenario as the technology continues to become more flexible and more affordable.”


  • U.S. Business Fraud Hotspots

These are the states with the highest rates of business fraud compared to their populations. SEON calculated the rate per 100,000 people in order to compare states of considerably different sizes against one another.


Nevada is the nation’s biggest business fraud hotspot, with 18.94 reports of business fraud per 100,000 people. This is more than 2.5 times the rate in the country’s best-performing state, Nebraska, where there were only 7.24 reports per 100,000 people. Not far behind Nevada is SEON’s second-place hotspot, Maryland. “Despite having almost double the number of business fraud incidents than Nevada, Maryland’s large population puts it in second place overall,” the research revealed. Arkansas, in third place, posted a low total number of business fraud reports, but showed a much higher than average rate of business fraud when looked at on a “per head” basis.


Source: SEON

The States with the Most Overall Fraud Per Head

These figures take into account cases of fraud committed against individuals and consumers, as well as businesses, indicating a need for personal protection against online threats.


Rhode Island has the highest number of fraud reports per 100,000 people in the country, at 1,017. “The Ocean State has a rate so high it is more than double that of every other state apart from the runner-up, making it an extremely risky place for fraud,” according to SEON. Next came Alaska with a fraud rate of 608 cases per 100,000 people, and Colorado, with 507 cases per 100,000 people.


Source: SEON
  • Highest Average Loss Per Fraud

SEON found these states as the worst places for fraud victims as they exhibited highest average monetary loss per reported fraud case.


Topping the list is California with the highest average loss per fraud report at $2,525. “As one of the planet’s biggest economies and home to the tech giants that have dominated the business world, California has become a prime target for fraudsters looking for high-value scores,” the SEON report disclosed.


In contrast to California, Wyoming has one of the smaller total numbers of fraud reports. However, the average cost of fraud incidents in Wyoming is as much as $2,245, the second-highest in the country. North Dakota claims third place with average losses per reported case of fraud standing at $2,050. However, median losses in North Dakota come up significantly lower than other states high up this category, suggesting to SEON that a few particularly costly fraud incidents may have skewed the data.

 
Source: Payback Ltd.

The States of Scam


Research conducted by Israel-based chargeback firm and online trading scam specialists Payback Ltd. analyzed data compiled from Google across the United States over a 12-month period in 2021 for a variety of scam and fraud-related keywords.


Assessing trends for 30-plus popular search keywords such as “scam call,” “social security fraud” and “identity theft,” the study sought to identify the U.S. state with the highest number of collective negative search terms against the number of positive and preemptive terms such as “prevent scams” and “fraud protection.”


Addressing the study’s findings, a Payback Ltd. spokesperson said, “Oregon’s increased tendencies to Google terms relating to scams and fraud indicates that such activities – and the need for advice on how to overcome them - are a more prevalent problem for the state in comparison to others. It is vital that we practice vigilance and protect both our personal and financial information when dealing with any potentially unknown or untrusted persons.”


The research revealed Oregon as the biggest hotspot for scams and fraudsters with the highest number of negative terms relating to scams and fraud, against low scores for positive and preventative terms. Alabama ranked second highest in the overall list as the most “at-risk” state, with Utah ranking third.


While the overall index took multiple search terms into account, Oregon also revealed itself to have the highest overall figures for Google searches of the term “online scam,” followed by Louisiana and Minnesota.


At the other end of the scale, Wyoming, South Dakota and Vermont rank as the three states with the lowest volume of searches for terms relating to scams and fraud – indicating that the resident population of these states experiences less fraudulent activity, and therefore have less need to head to Google to seek advice.


The index also analyzed search terms including brands and organizations such as Amazon, PayPal, CashApp and eBay. “Once again, Oregon registered the highest volume of searches for eBay scams, while Utah was shown to have the highest searches for scams relating to Amazon,” the study reported. Virginia registered the highest CashApp searches, and West Virginia topped the list of searches for PayPal scams.


Addressing the study’s findings, a Payback Ltd. spokesperson said, “Oregon’s increased tendencies to Google terms relating to scams and fraud indicates that such activities – and the need for advice on how to overcome them - are a more prevalent problem for the state in comparison to others. It is vital that we practice vigilance and protect both our personal and financial information when dealing with any potentially unknown or untrusted persons.”

Source Payback Ltd.

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