MICHIGAN — A new report from the Consumer Federation of America reveals that Michigan residents lose an estimated $1.7 billion annually to online scams, while the nationwide cost has reached a staggering $119 billion each year. The study, released Wednesday, March 11, 2026, identifies Meta-owned platforms Facebook and Instagram as the sites most commonly associated with these fraudulent activities.
The “true” cost of online scams is estimated to be seven times higher than figures officially reported to the FBI. While Americans reported losing $16.6 billion to scams in 2024 — representing a 33% increase from the previous year — the Consumer Federation of America indicates the total economic impact is likely much higher due to widespread underreporting. Only 14% of financial fraud victims typically report these crimes to the authorities.
In Michigan, the average loss is approximately $170 per person, affecting both urban communities in Detroit and rural residents in the Upper Peninsula. The state’s economy is uniquely susceptible to certain types of fraud because of its manufacturing history. Researchers found that Michigan’s high population of auto industry retirees creates specific vulnerabilities to pension-related online fraud and employment scams. Sen. Mallory McMorrow, a Michigan senator, said the findings represent a grim picture of social media activity. “Michiganders are being robbed in plain daylight,” McMorrow said. “The true cost should be a wakeup call to elected leaders to hold tech companies accountable for reining in scammers.”
The Consumer Federation of America’s $119 billion estimate is based on underreporting patterns documented by the Bureau of Justice Statistics. Their research indicates that only 14% of financial fraud victims report these incidents to the authorities. Ben Winters, the director of AI and privacy at the Consumer Federation of America, said the scale of the problem requires immediate intervention. “These statistics show that action across the economy — increasing platform liability, shutting down data brokers, improving reporting mechanisms, regulating generative AI and beefing up consumer protection enforcement resources — are not only exciting ideas but mandates for a safe future,” Winters said.
The report identifies Meta-owned platforms as the most frequent sites for scam activity. Data from the Better Business Bureau shows Facebook is associated with 57% of reported scams, followed by Instagram at 22% and WhatsApp at 8%. Investigative reports cited by the Consumer Federation of America suggest these companies profit from the presence of fraudulent content. Internal Meta documents reported by Reuters projected that roughly 10% of the company’s 2024 revenue — about $16 billion — would come from advertisements promoting scams and banned goods. Additionally, The Wall Street Journal reported that Meta allows suspicious advertisers to reach up to 32 automated “strikes” for fraud before banning their accounts.
Criminals use a variety of methods to target victims, with investment scams accounting for the largest share of national losses at an estimated $46.6 billion. Other frequent categories include email targeting at $19.7 billion, tech support scams at $10.4 billion and romance scams at $4.7 billion. Government impersonation scams cost Americans an estimated $2.9 billion annually.
Older Americans are the group most frequently targeted by these operations, often losing retirement funds that are impossible to replace. Richard Fiesta, the executive director of the Alliance for Retired Americans, said policymakers and corporations must act with urgency to protect seniors. “Behind these staggering numbers are real people whose savings and retirement security are being stolen,” Fiesta said. “Without strong action, this cost will keep rising with new technologies.”
Anya Schiffrin, the co-director of technology policy at Columbia University’s School of International Public Affairs, noted that shame or embarrassment often prevents victims from reporting their losses. “Scam ads on Meta, in particular, play a huge role in luring and defrauding victims,” Schiffrin said. She noted that the new report helps quantify the “scam economy” by filling a critical gap in available crime data.
The Consumer Federation of America recommends that social media platforms implement safer design features to limit fraud. These suggestions include providing stronger default privacy settings, enhancing identity protection tools to detect fraudulent profiles and establishing more robust fraud reporting systems for users.