Introduction

Financial fraud is on the rise nationally. Across all 50 states and D.C., the Federal Bureau of Investigation’s (FBI) Internet Crime report tracked 859,532 fraud claims in 2024. These claims resulted in $16.6 billion in financial loss, up 33% from 2023. A separate source, the Federal Trade Commission’s (FTC) Consumer Sentinel Network, reported 2.6 million fraud cases in 2024, of which 38% involved losing money. According to this source, citizens reported losing $12 billion to fraud, up $2 billion over 2023. This study seeks to answer the pressing question: What is the extent of financial fraud in Iowa and its impact on the lives of everyday Iowans and the overall health of the state’s economy?

Thanks to mitigation efforts, Iowa has a better handle on fraud than most states. Based upon cyber-enabled crime statistics from the FBI, Iowa ranks 16^th best on total losses from cyber-enabled crime; 10^th best in cyber-enabled crime per 100,000 citizens; 15^th best for complaints filed by individuals 60+; and 10^th best for cryptocurrency losses by state.[1] The FTC Consumer Sentinel Network figures on fraud, identity theft, and telemarketing suggests Iowa is doing even better than the FBI’s statistics. Iowa has the third lowest rate of fraud and the 6^th lowest rate of identity theft by their metrics.[2] Iowa’s banking industry, law enforcement, state agencies, and others have worked hard to raise awareness to the risk of financial fraud. This ongoing effort has likely mitigated some of the potential consequences of fraud and is one of the reasons Iowa ranks so well among states when it comes to falling victim to financial fraud. Nonetheless, any amount of fraud has an impact on the state’s economy.

According to the Iowa Department of Public Safety, reported fraud cases are up 6% from 2022 through 2024.[3] Financial fraud is also costly, with the FTC reporting the total financial loss of financial fraud at $52 million statewide in 2024, up 204% since 2020.[4] The FBI reported $72 million in losses from cyber-enabled crime in Iowa, up 241% since 2020.[5] These are just the reported figures. Unreported loss from financial fraud is higher.

In Iowa and across the nation, fraudulent financial activity is becoming increasingly sophisticated, encompassing a broad array of schemes such as identity theft, phishing, wire fraud, investment scams, and elder financial abuse. As the digital economy expands and cybercriminal tactics evolve, Iowans face heightened risks from fraud schemes that attempt to exploit personal vulnerabilities, holes in financial systems, social media platforms, payment technologies, and personal data security. Fraudulent activities result not only in direct financial losses for individuals, businesses, and financial institutions, but they also have ripple effects throughout the state’s economy—affecting prices, consumer behavior, public safety expenditures, and overall economic productivity.

This report presents evidence of the economic consequences of financial fraud, covering both the direct and indirect costs of fraudulent activity by examining incident data, economic modeling, and a fraud case study. By analyzing trends in fraud—including the types, methods, and demographic factors associated with its presence—it aims to provide policymakers, businesses, and consumers with actionable insights into the economic stakes of financial fraud.

Key Findings

• For the state of Iowa, CSI projects losses from financial fraud in 2025 to include—
  • An estimated $93 million in direct, reported losses.
  • An estimated $93 million to $573 million in direct, unreported losses.
  • The financial fraud CSI estimates will occur in 2025 equals $57 to $205 per Iowan.
• The $666 million in combined reported and unreported losses would be enough to buy every Iowa resident a front-row ticket to a grandstand concert at the Iowa State Fair.
  • If all Iowans affected by the ~14,000 cases of reported financial fraud in 2024 gathered together, they would nearly fill the Iowa State Fair Grandstand (15,000 capacity).
  • The direct, reported losses from financial fraud in 2025 ($93 million) could have covered the cost of admission for all Iowa State Fair goers from 2015 through 2025 (approx. $90 million).
• CSI estimates reported fraud alone will have the following impact on Iowa’s economy in 2025:
  • A $225 million reduction in state GDP
  • A $200 million reduction in statewide personal income
  • A loss of approximately 1,500 jobs
• Estimates on the reporting of financial fraud suggest formal reporting of financial fraud may be quite low, with one estimate putting the figure at 14%.
• CSI estimates all financial fraud, reported and unreported, will have the following impact on Iowa’s economy in 2025:
  • Up to a $1.5 billion reduction in state GDP
  •  Up to a $1.0 billion reduction in statewide personal income
  • A loss of up to about 5,000 jobs
• The state’s General Fund will lose an estimated $46 million in tax revenue this year due to reported and unreported financial fraud.
•  Financial fraud has wide-ranging economic implications. The impact is felt across consumer spending, interest rates, available loanable funds, capital investment, government spending and taxing, profit, and community trust.
• Thanks to industry and state government efforts to raise awareness and mitigate fraud in Iowa, the state has the third lowest rate of financial fraud in the country at just 715 reported incidents per 100,000 residents, exceeding only North and South Dakota.

Background

Financial fraud comes in many shapes and sizes, but transactions have two main forms: verified (customer initiated and/or approved) and unverified (not initiated and/or confirmed by customer). Verified fraud typically involves deception or coercion that leads the customer to authorize the transaction, such as in scams or social engineering. Unverified fraud, on the other hand, involves unauthorized access, like stolen card or account credentials used without the customer's knowledge or consent. Specifically, financial fraud includes but is not limited to the following types:

Figure 1. iStockPhoto. Courtesy of BeeBright.

Grandparent Scam: Thieves create a story that compels grandparents to send money to help a grandchild out of a bad situation, often being told “please don’t tell mom.”

Romance Scams: Fraudsters build fake romantic relationships to emotionally manipulate victims into sending money or personal information.

Wire Transfer Fraud: Scammers trick victims into sending money via wire transfer, often by posing as a trusted contact or through scams like romance frauds.

Investment Fraud: Scammers lure victims with fake or misleading investment opportunities (e.g., crypto scams, Ponzi schemes, pump-and-dump stock schemes, real estate fraud, fake private placements, high-yield investment programs, etc.) promising high returns, then steal the money.

Gift Card Scams: Victims are tricked into buying and sending gift card details to scammers, who often pretend to be authority figures or loved ones.

Fake Prize Scams: Victims are told they've won a prize but must pay a fee or provide personal information to claim it — which the scammer uses for fraud.

Imposter Scams: Scammers impersonate government, business, and other officials or agencies (e.g., Internal Revenue Service or the Social Security Administration) to threaten or persuade victims into sending money or sensitive info.

Elder Financial Fraud: Targeted scams against older adults, often involving deception, coercion, or exploitation to steal money or assets.

Fake Distress: Fraudsters pretend to be a relative or friend in urgent need of money due to a false emergency.

Check Fraud: The use of fake, altered, or stolen checks to unlawfully spend from another person’s financial resources.

Identity Fraud: This type of fraud occurs when someone uses another person's personal identifying information (like name, Social Security number, or bank account information) to commit financial crimes.

Credit Card Fraud: Unauthorized use of someone’s credit card information to make purchases or withdraw funds. Credit card fraud can also include individuals who fraudulently report a transaction as fraud when they in fact did use their own card to make a transaction.

Debit Card Fraud: Illicit use of a person’s debit card or account number to withdraw money or make transactions without permission.

Loan Fraud: Fraudulently obtaining a loan through misrepresentation of personal, business, or financial information, dedicating loan proceeds in a fraudulent manner, or using stolen identities to secure loans.

Account Takeover Fraud: A type of identity fraud where a criminal gains unauthorized access to and control of a person’s financial account to steal money or personal data.

Figure 2. iStockPhoto. Courtesy of Alex Cristi.