NEW MEXICO (KRQE) – Throughout the pandemic, business closures and lockdowns pushed shoppers online. But the number of shady online retailers and online fraud rose in 2020, along with an increase in the average amount of money lost to fraud schemes, according to a national analysis from the Better Business Bureau (BBB).
New Mexicans, of course, were not immune to the dangers of online fraud. A KRQE analysis of data from the BBB reveals that the number of online fraud reported in the state rose in April and May of 2020. The number of online fraud generally remained elevated during the pandemic and peaked in April 2021, according to BBB data.
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The number of victim-reported online fraud in New Mexico rose during the pandemic. Line graph on bottom of chart shows reports over time. Data from BBB.
Many of the victims of online fraud in New Mexico were elderly. KRQE news 13 recently reported on Federal Bureau of Investigation (FBI) estimates that New Mexico’s elderly lost more than $7 million to online fraud.
“Last year, 837 New Mexicans over the age of 60 lost more than $7 million in online scams and frauds. More than half of those losses — $3.9 million — was due to romance scams,” explains Frank Fisher, a public affairs officer for the Albuquerque division of the FBI.
“Romance scams are when you go online and you meet somebody in cyberspace who wants to develop a relationship with you,” he says. “This can be as benign as just winning your confidence, to become your friend, so you can share things with that person.” But in the end, they can end up stealing a victim’s personal information or money.
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“Last year — and into this year — was very difficult for a lot of people, with COVID-19 and some of the physical restrictions. So, a lot of people went online to meet people and to develop those relationships,” Fisher adds. “We’ve seen that this romance scam, unfortunately, works for a lot of people, particularly some of our older New Mexicans who might be alone, who might be lonely, who might be looking for companionship.”
Data from the Better Business Bureau’s Scam Tracker reveals that from January 3, 2018, to May 5, 2021, New Mexicans of all ages lost a reported $15,000 to romance schemes, a small amount compared to the roughly $71,000 lost to online purchase fraud in that time. Still, the average loss in a romance scheme — $7,500 — was far greater than the average reported loss of $261 for online purchases.
The BBB data suggests that the COVID-19 pandemic changed fraud patterns in New Mexico. In 2019 and 2020, before the pandemic, counterfeit product reports to the BBB amounted to a little over $20,000 lost. During the pandemic, over the same number of days, only about $500 was reportedly lost to counterfeit product fraud. The amount lost to online purchase fraud, on the other hand, rose by more than 500% and accounted for about $56,000 lost during the pandemic.
Despite the rise in online fraud in New Mexico during the pandemic, the data shows that New Mexico was in the middle of the pack in terms of the total number of online purchase schemes per capita from 2019 to April 28, 2021. Colorado had more reports per person than New Mexico. Texas had a few less per person than New Mexico.
As of April 4, 2021, Alaska had the most online purchase fraud reported per capita, at 185 reports per person, according to data from the BBB. The data doesn’t explain why some states saw more fraud reports. Perhaps there was more fraudulent activity per person in states like Alaska, or maybe people in Alaska were more comfortable reporting their losses. And while online fraud rose across the country, the pandemic also brought a change in who was falling victim.
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New Mexico found itself near the middle of the pack in terms of total online purchase fraud reports from the beginning of 2019 to April 28, 2021. Data from BBB and US Census.
“Over the past few years, we’ve actually seen that younger consumers are becoming more susceptible to scams,” says Victoria Carreon, the marketing coordinator for the New Mexico and Colorado area Better Business Bureau. “We actually saw that last year, during the pandemic, they were as susceptible to scams as consumers 65 years and older, and their median dollar loss was the same amount.”
The trend also appears in FBI data. In 2019, almost 80% of the victims of all fraud types in New Mexico — including both online and offline fraud — were over the age of 60. In 2020, only about 45% of the victims were over 60 years old, according to data from the Internet Crime Complaint Center. Victims under the age of 20 in New Mexico lost $162,106 to fraud in 2020, nearly a 700% rise from 2019, according to the FBI data.
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In 2020, younger people were victimized more frequently than in 2019. Data from FBI IC3.
Younger people are more susceptible to certain online schemes, such as fake employment postings or fraud spread via social media, says Carreon from the BBB. One of the most common types of schemes last year was dubious online pet sales, she adds.
Jennifer Thomas and her 22-year-old daughter from Pensacola, Florida, told KRQE how they fell victim to one of these pet schemes: “This website pops up and it was, you know, it looked legit, completely legit. There were no flags at all whatsoever.” So, Thomas and her daughter decided to buy a “maltipoo” puppy from them.
The people supposedly selling the puppy told Thomas and her daughter to send a $500 deposit. They sent it via Apple Pay, but the salespeople claimed the money never went through, Thomas says.
“So they’re like, ‘Call the bank. Call your bank and cancel it. And then just do it [through] Venmo’,” Thomas recalls. So Thomas and her daughter tried to cancel the initial payment, but it turns out it had already gone through, Thomas says.
In the end, Thomas and her daughter ended up waiting at the airport for their puppy to arrive. But it never did, they say. And while they were able to get half of the money back from their bank, they say they lost the other half — $500 total.
Thomas and her daughter, of course, aren’t alone in falling victim to these kinds of schemes. A December 8, 2020 report to the BBB describes similar fraud in Albuquerque as reported by someone who was trying to adopt a kitten.
“This breeder used a shady transporter not listed on the BBB website that wanted a lot of ‘refundable’ money for insurance to transport at the last minute,” the report says. In addition, there was “no proof there was ever a kitten.” In the end, the victim reportedly lost $350.
In Sandoval County, a couple reportedly lost $500 trying to order a sphynx cat online: “My husband is very privy to the plethora of scams when it comes to buying an animal, so he wasn’t one hundred percent comfortable with buying an animal online,” the victim said in the report. “We did it anyways.”
As with the others, the couple ordering the cat claims that there were dubious shipping charges. The seller “asked that we pay $880 for a shipping crate to keep the cat and staff safe from COVID-19.” In the end, the couple reportedly lost $500.
With the rise in online fraud, Frank Fisher says the FBI is cracking down on internet perpetrators. “If you’re an online scammer and you want to perpetuate a fraud, you better be looking over your shoulder, because the federal government, state, local governments, and our international partners, have had enough, and we’re going to come looking for you,” he says.
Meanwhile, Carreon with the BBB says that New Mexicans can do things to protect themselves: “Make sure that the information is matching up,” she says. With all online sellers, “check their social media. Check reviews. Look on BBB.org — our reviews are verified.”
Still, even with due diligence, it can be easy to fall victim, Carreon says. After all, “the internet is a bit like the wild west,” with new fraud popping up all the time. As pandemic-related travel restrictions end, online fraud is likely to continue, but travel-related schemes are the next big thing, she adds.