Coloradans are a prime target for fraudsters

Higher incomes and credit scores make state residents a rich target, Lending Tree says

Colorado has one of the most educated populations in the country, second only to Massachusetts for the share of residents holding a college degree.

But the state also ranks seventh in terms of how much money people are losing to scams, according to a Lendingtree analysis of fraud data from the Federal Trade Commission.

The financial success of Colorado’s population because of its education is a primary reason it is a prime target for fraudsters.

In the first nine months of 2023, Colorado residents filed 46,410 fraud reports listing losses of $114.5 million, or an average of $2,468 per person reporting a loss.

That works out to a loss of $19.85 per Colorado resident, which ranked seventh highest after Nevada, California, Arizona, Washington, Florida and Hawaii. The states with the lowest per capita losses were Maine, Kentucky, Mississippi, Wisconsin and Nebraska. Missouri, the “Show Me State”, ranked 37th.

A high ranking for fraud losses doesn’t necessarily mean residents of a state are more gullible or simply unable to spot bad actors. As Washington Post columnist Michelle Singletary warned on Thursday, nobody is too clever to be scammed.

Fraudsters tend to be opportunistic, going where the money is, and in Colorado, they are looking to mine a different kind of gold, said Matt Shulz, a chief credit analyst with Lendingtree, an online lending marketplace based in Charlotte, N.C.

“Colorado is a really enticing target for fraudsters because its residents have high incomes and high credit scores relative to the rest of the country,” he said.

Bank accounts have more dollars to drain, credit cards have higher spending limits and credit applications using a stolen identity are more likely to get approved.

But Colorado’s high ranking could be a sign that residents know where to file a report and aren’t afraid to speak out when something goes wrong, Shulz

said. They are less willing to be passive victims.

“It’s a good thing to have people report these incidents when they happen because it can help authorities learn more about what is happening with fraud overall,” he said.

Nationally, consumers filed 1.8 million fraud reports listing losses of $7 billion in the first nine months of 2023, according to the FTC. About 26.7% of those who filed a report said they lost money, with the average loss at $3,902.

That is up from a 25.3% loss rate and an average loss of $1,291 in 2019, the first year the FTC began publishing data.

Colorado Attorney General Phil Weiser said his department has seen an increase in complaints from consumers regarding online scams, in particular imposter scams.

Fraudsters call, text or email a target pretending to be someone in a position of authority and asking them to divulge financial or personal information or to hand over money.

Imposter scams accounted for a third of fraud reports filed nationwide with $2 billion in reported losses. But only a fifth of those filing a complaint reported losing money, and their average loss was $828, below several other categories.

Investment scams accounted for only 4.2% of complaints but resulted in the highest average loss at $7,000 per victim. About three out of four of those filing a complaint reported a loss.

Emails remain the most common way fraudsters reach victims, followed by phone calls and texts. Social media ranked fifth, but it is gaining ground rapidly as a tool of deception and generating higher losses than any other communication tool.

“Anyone can be prey for a fraudster’s scheme. It is our job at the Department of Law to protect Colorado consumers and hold scammers and other bad actors accountable,” Weiser said in an email.

Consumer complaints are critical to understanding trends and the harm consumers experience in the marketplace, Weiser said. He encouraged consumers to help both themselves and others by filing complaints at stopfraudcolorado.gov.

“The website also has useful educational materials to help consumers detect scams and avoid becoming a victim of fraud,” he said.