US scam victims lose billions, then face taxes, debt and blame

Scam losses in the United States have hit a record high, but for many victims, the financial pain does not end with the fraud itself. New reporting shows that those targeted often face additional tax bills, loan repayments, and blame from their own banks, leaving them worse off than before.

One widower, identified only as Simon, lost $800,000 to a woman he met online while grieving his wife of 43 years. The scammer, who used a fake identity, convinced him to send money over several months. Simon was then left to repay $185,000 he had borrowed and owed tens of thousands in taxes on the withdrawn funds. His reports to local police and the FBI led nowhere, and he was later contacted by another fraudster offering false help.

Americans reported $15.9 billion in losses to the Federal Trade Commission last year, a 25% jump from 2024. The real figure is likely far higher, as many victims do not come forward. The FTC estimates actual losses in 2024 may have approached $200 billion.

Interviews with nearly five dozen victims across the country found a common pattern: after the scam, they faced ridicule from family, pressure from lenders, and a lack of support from authorities. Several said they considered suicide, and two attempted it.

Tax rules add to the burden. Money withdrawn from retirement accounts is often taxable, even if it was stolen. A provision in the Tax Cuts and Jobs Act, made permanent in 2025, eliminated deductions for personal losses from most scams. Retired nurse Susan Bivins lost over $200,000 to a fake federal agent and then received an $80,000 tax bill. She sold her home and now lives in a small apartment, still paying off the debt.

Banks rarely reimburse customers for authorized transactions, even when fraud is involved. Some victims report having accounts frozen or being threatened with legal fees. One Colorado woman, Debra Fox, lost $58,000 in a romance scam and was told by her bank she would be held responsible for any related costs.

A proposed law before Congress, the Tax Relief for Fraud Victims Act, would allow victims to deduct their losses. Advocacy groups argue that current policies effectively punish people who have already been victimized.

Tracking the stolen money often leads overseas. In Simon's case, investigators traced his funds to a scam compound in Myanmar, which has since been destroyed. The operators, however, simply moved to new locations, and Simon has not recovered any money. He said police told him to say goodbye to his savings. "Already I experienced something very bad," he said, "and now I have to pay for the consequences on top of it."