Scam City

Texas Ranks No. 2 for Financial Scams in the Nation—How to Spot Them

A recent study has shown Houston to have the second highest rate of scam victims in the country.

By Claire Anderson September 13, 2022

 

Texas ranks no. 2 in the nation for financial scams. 

Houston is a city of achievements—we’re the home of the best college investment in Texas, one of the top locales for digital nomads, and our medical center is recognized across the world. But now there’s a new ranking to add to the books, and it’s not worth bragging over. 

A recent study conducted by Social Catfish, a company that aids citizens in avoiding online scams, found that the Lone Star State ranked second highest in the nation for the total number of scam victims in 2021, totaling 41,148 people who lost an average of $14,732. Overall, Texas lost $606,179,646, trailing California’s no.1 spot, which saw 67,095 victims lose $1.2 billion to financial scams. 

The study, utilized data from recent reports made by the FBI’s Internet Crime Complaint Center and the Federal Trade Commission to analyze the different and most common methods of scammers, general demographics of scam victims, and how social and political factors have affected the trends and general increase of online scams over the last several years.

As a result, online scams are on the rise as a result of the COVID-19 pandemic and the increase of digital resources people have utilized more frequently since it began: online shopping, social media and dating apps, and digital banking.

Most Common Types of Scams

Cryptocurrency and investment scams saw the largest annual increase between 2020-2021, while identity theft and imposter scams were reported most frequently across the country last year. According to the Federal Trade Commission’s Consumer Sentinel Network Data Book 2021, Texas suffered the most from identity theft, phishing and imposter scams. The Better Business Bureau’s Scam Tracker reported several hundred scams in the Greater Houston area since the beginning of 2022, most commonly utility, online purchase, employment, and advance fee loan scams. 

Throughout 2022, the Houston Association of Realtors and Crime Stoppers of Houston is working to mitigate the rise of rental scams, where landlords who may not own the properties up for sale are asking for security deposits or first month’s rent before the renter is shown the listing in person.

Texas at a Glance

Scams involving fraudulent credit bureaus and information data made up 15 percent of scams reported in Texas in 2021, with 13 percent of reported scams falling under the “imposter” category. Other scams reported in Texas last year included mortgage, loan and bank scams, lottery and sweepstakes scams, and scams relating to false job opportunities and multi-level marketing schemes.

Another report conducted by First Orion found that multiple Texas cities rank in the top 10 cities for financial scams. At no.1 was San Antonio; Dallas, Fort Worth, Lubbock and Tyler followed, respectively.

Who Gets Scammed the Most? 

Children and teens under 20 have seen the highest increase of money lost to online scams over the last five years, totaling $101.4 million last year, while elderly (60 or older) victims lost the most money to scams out of all age groups studied in 2021, a record $1.7 billion. Although children and the elderly are seen as high-risk demographics for scams, the numbers of reported scams as well as money lost to scams remain fairly consistent across adult demographics 20-59. 

How to Stay Vigilant

The Social Catfish study also lists several tips for citizens to stay vigilant from potential scams, including not giving out money or personal information to people you have never met in person, regulating your children’s online activities, paying attention to poor grammar and unfamiliar links in emails and texts claiming to be from official organizations, and performing reverse searches on phone numbers, email addresses, and photographs of people you are receiving suspicious content from. 

If you suspect you have been the victim of a scam of any kind, Social Catfish says to please report it immediately to the FTC, IC3, FBI and your financial institution. For Houston-area scams, report to local law enforcement and the Better Business Bureau, or file a complaint with the Office of the Attorney General of Texas.

Social Catfish as well as the FBI also suggest that the public educate themselves more on the nature of scams to better protect themselves from the financial, professional and personal losses that falling victim to a scam might bring them by studying the results of the studies mentioned in this article (linked throughout), as well as staying up to date with scam data and trends through websites such as Social Catfish and the Internet Crime Complaint Center, both of which offer resources for victims and potential victims of scams. 

Learn more about the methodology behind the study at Social Catfish. 

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