Scammers Caused a Lot of Grief in 2009
FTC initiative will crack down on one portion of it
A lot of people raised their voices about scams that they got caught up in last year.
Between January and December 2009, the Consumer Sentinel Network—an online database of consumer complaints available only to law enforcement—received more than 1.3 million complaints. The Federal Trade Commission (FTC), one of seven organizations that received the complaints, released a report by the network listing the year’s top offenders.
Overall, fraud accounted for 54% of all complaints, costing consumers more than $1.7 billion. Of those who reported the method of initial contact with the perpetrator, 48% said it was by email, 12% by Internet Web site, and 10% by phone. Nevada had the highest per capita rate of fraud-related reports, followed by Colorado and New Hampshire.
In the specific categories, identity theft was number one, with 21% of complaints, which actually declined five percentage points from 2008. The more common forms of identity theft were credit card fraud (17%), government documents/benefits fraud (16%), phone or utilities fraud (15%), employment fraud (13%), bank fraud (10%), and loan fraud (4%). Florida had the highest per capita rate of reported identity theft complaints, followed by Arizona and Texas.
The 101-page Consumer Sentinel Network Data Book (PDF) also breaks out complaint data on a state-by-state basis. The top complaints by numbers and percentages were as follows:
- Identity theft: 278,078 (21%)
- Third-party and creditor debt collection: 119,549 (9%)
- Internet services: 83,067 (6%)
- Shop-at-home and catalog sales: 74,581 (6%)
- Foreign money offers and counterfeit check scams: 61,736 (5%)
- Internet auctions: 57,821 (4%)
- Credit cards: 45,203 (3%)
- Prizes, sweepstakes, and lotteries: 41,763 (3%)
- Advance-fee loans and credit protection/repair: 41,448 (3%)
- Banks and lenders: 32,443 (2%)
Weighing in at number 14 were complaints involving phony business opportunities, employment agencies, and work-at-home plans. There were 22,896 (2%) of those. In February, the FTC announced a new initiative to deal with these con artists more aggressively: Operation Bottom Dollar. It will crack down on those preying on unemployed Americans with the promise of jobs that aren’t real. The FTC has partnered with the online job placement service Monster.com, the search engine Bing, and Craigslist to help job seekers recognize job scams so they can avoid being victimized.
In conjunction with the announcement, the FTC said it had filed seven new cases against individuals and businesses that allegedly tricked people into paying money for jobs or other chances to earn income. One scam victimized more than 100,000 people.
By the way, March 7-13 is National Consumer Protection Week. This year’s theme is “Dollars and Sense: Rated ‘A’ for All Ages,” emphasizing the importance of financial literacy at every stage of life. You can watch videos on different types of frauds and scams at the campaign’s site.
Published March 9, 2010