The Federal Trade Commission today released a statistical survey of fraud in the United States that shows that 30.2 million adults – 13.5 percent of the adult population – were victims of fraud during the year studied. More people – an estimated 4.8 million U.S. consumers – were victims of fraudulent weight-loss products than any of the other frauds covered by the survey.
Fraudulent foreign lottery offers and buyers club memberships tied for second place in the survey. Lottery scams occur when consumers are told they have won a foreign lottery that they had not entered. Victims supplied either personal information such as their bank account numbers or paid money to receive their “winnings.” In the case of buyers clubs, victims are billed for a “membership” they had not agreed to buy. An estimated 3.2 million people were victims of these frauds during the period studied.
“The FTC uses a one-two punch to fight fraud,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “Our enforcement program stops the most widespread and egregious practices, and our education program helps alert consumers to the tricks of the fraud trade. We encourage everyone to click on our Web site – ftc.gov – not only to find out how to recognize a scam, but also to report it. That’s the best way to help end rip-offs of all kinds.”
Fraudulent prize promotion schemes ranked fourth in the fraud survey, with an estimated 2.7 million victims reporting making a purchase, a payment, or attending a sales presentation to receive a prize that either was never delivered or was not what the consumer expected.
Work-at-home programs, in which the purchaser earned less than half of the income the seller had promised, ranked fifth among the fraudulent schemes covered by the survey. An estimated 2.4 million individuals fell victim to these schemes, and many purchased more than one fraudulent work-at-home program.
Twenty percent of African Americans and 18 percent of Hispanics are estimated to have been victims, while the rate for non-Hispanic whites was 12 percent. In addition, the survey found that younger consumers, those who did not complete college, and those with high levels of debt were more likely to be victims of fraud. Consumers between 65 and 74 years of age were 32 percent less likely to report having experienced fraud than those between 35 and 44.
The top 10 frauds listed in the report include:
Consumers also reported falling victim to other specific scams, including pyramid schemes.
Print advertising – direct mail, including catalogs, newspaper and magazine advertising, and posters and flyers – was used to pitch fraudulent offers in 27 percent of reported incidents. The Internet, including Web sites, auction sites, and e-mail, was used to make 22 percent of the fraudulent pitches. Television or radio accounted for 21 percent of the pitches, and telemarketing accounted for nine percent.
The FTC offers these tips for consumers:
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.