(The Center Square) – A new report warns Arizonans will lose more than $4 billion to financial fraud this year.
“The Impact of Financial Fraud in Arizona” is from Common Sense Institute, which reported Arizona had the nation’s 11th highest fraud rate with 1,459 cases per 100,000 residents. Florida had the highest amount of fraud of any state, followed, in order, by Georgia, Delaware, Nevada, Maryland, Texas, South Carolina, New Jersey, Louisiana and Illinois.
The fraud report is timely research amid the increasing digitization of the economy, said Zachary Milne, a senior economist and research analyst with the Institute.
“These sorts of crimes are increasing,” Milne told The Center Square.
Fraud is committed in many ways. For example, criminals might conduct a grandparent scam, where thieves concoct a story that asks grandparents to secretly send money to help their grandchildren get out of an unpleasant situation. Another fraud might be a romance scam where fraudsters build a phony relationship and persuade someone to send money or personal information that would allow crooks access to funds.
Other forms of fraud include gift card scams, fake distress and forgery.
Another kind of fraud, skimming, is the use of a device on ATMs or card readers to get someone’s credit or debit card information.
“About $521 million in financial fraud was committed in Arizona in 2024,” said Milne. “Based on reporting and some other estimates, only a small percentage of financial fraud is actually reported to authorities, I think the number is around 14%, so, if you take that into account, that $521 million turns into about a $4 billion direct loss from fraud in the Arizona economy.”
Milne noted you don’t have to be a direct victim of fraud to be affected by it. Governments and businesses lose out on money when someone loses money to fraud.
“The more crime, the more financial fraud there is. It sort of creates frictions in the economy,” said Milne. “People are less likely to engage in commerce in areas where fraud is very high. They may be very reluctant to buy from an online vendor if they know that fraud – internet fraud, for instance – is very high.”
Milne recommended Arizonans not only read the report but help older Americans who might be at higher risk of fraud.
“Some of the older generations are maybe not as tech savvy as some of the other generations,” said Milne. “So I think it’s important to talk to your parents and your grandparents and tell them if they’re getting suspicious texts or they get an email or they want to buy something online. Just show them how to verify that these are legit sources before they go giving out their credit card information.”