A rather stunning statistic from a recent segment of Planet Money’s The Indicator podcast caught my attention.
The presenter cited a new report from the Federal Trade Commission saying that Americans lost $12.5 billion to fraud last year. “And that’s a 25% increase from the previous year.”
Other sources say that number is likely low since “a lot of victims of fraud don’t file a report with an agency like the FTC”.
I found the story interesting because I’ve noticed a big upswing in attempted scams that have arrived by email and text over the past year or so. Stuff like…
EZPass, the company that collects tolls for riding in the local Lexus Lanes, claims I owe them money and will lose my license (or worse) if I don’t pay up.
DHL/UPS/FedEx/the Post Office has a package they can’t deliver for some reason, and they just need more information.
My credit card or other financial account is about to be canceled by Bank of America (mostly but not exclusively) and they might be forced to send a collector to my house.
It’s been a long time since I’ve seen any of the Nigerian prince schemes but I’d bet that classic is still out there. Maybe my chance to make millions is in the spam folder.
Anyway, this increase in fraud is likely connected to the steep decline in trusted referees that Michael Lewis detailed in the first season of his podcast Against the Rules.1
Many of those referees, both government agencies and industry organizations, are no longer the neutral arbiters people think they are. Instead we have the people who stand to profit the most writing regulations and making decisions tipping the scales heavily in favor of the corporations.
After a major crash, like the mess that came out of the 2008 financial crisis, there’s lot of high-minded talk about fixing things and making the system fairer. Minor tweaks get made but, for the most part, the frauds, legal and otherwise, only continue.
So, what will happen to the remaining, relatively weak, regulatory guardrails as a result of the current chaos? An easy prediction is that the trend towards letting everyone fend for themselves accelerates.
Let’s be careful out there.
At the top, Sgt. Phil Esterhaus’ closing instructions from at the start of each episode of the excellent 80’s cop show “Hill Street Blues”.
1. Specific episodes of this or most podcasts are easiest to find and listen to using a good podcast app. Overcast is my favorite (iOS only) but there are many others for both platforms.