Fraud and Prevention
Fraud is a growing concern and fear for
the modern American consumer. We are constantly bombarded
with reports and stories from countless victims of fraud.
But is this an actual issue we should be worried about
or just another over paranoia of our society? Judging
from the results of a recent survey by the Federal Trade
Commission (FTC), there is no over exaggeration. Twenty
five million American citizens, or 11.2 percent of the
adult population, fell victim to fraud in a one year
period. Surprisingly the report states that minorities
are more likely to be susceptible to consumer fraud.
American Indians and Alaska Natives had the highest
fraud victim rate at thirty four percent. Seventeen
percent of African Americans and fourteen percent of
Hispanics reported one or more counts of fraud. Leaving
the nations majority, Non-Hispanic whites, only reporting
six percent. Consumers with higher debts are also more
likely to be victims of fraud.
The (FTC) survey showed that three of
the top four categories of fraud related to credit.
This included advance-fee loan scams that claim victims
trying to get out of debt. These scams require advance
fees for loans or credit cards to be delivered after
the fee is processed. Soon after getting the consumers
payment and information the fraudulent company seems
to vanish, leaving the customer even more in debt then
before. Advance-fee scams are the most frequently reported
type of consumer fraud, claiming four and a half million
victims in the United States on a yearly average.
The second highest victim totals came
from club membership buyers or bills for unordered publications.
This is where consumers are unaware they are being billed
for memberships they did not authorize and publications
they did not sign up for. This happened to a reportedly
four million people in a one year period.
Credit card insurance operations claimed
over three million victims to fraud, making it the third
highest fraud scam. This is where consumers are persuaded
to purchase credit card insurance after being told that
they will face highly significant charges if their card
is illegally used. Federal law mandates consumer liability
in case of credit fraud to fifty dollars, making the
insurance purchases totally unnecessary and ill-advised.
Lastly, two million consumers were reportedly
victimized by credit repair scams. In these cases fraudulent
institutions and companies promised the consumers that
they had the ability to remove negative information
from credit reports. If this were true, these companies
would have the power to remove truthful credit information
and or establish a new credit report for the consumer.
Their promises are totally bogus, they do not have the
capabilities to erase and change parts of anyone’s
The survey reports that most of consumers
learn of the companies offering false deals through
news ads, internet and posters. These methods contributed
to thirty three percent of overall victims. Telemarketing
was the first method of contact in seventeen percent
of consumer fraud advertisement tactics. Fourteen percent
of reports were from email and internet, while television
and radio claimed a little over ten percent of the victims.
As far as sex and age demographics, women
and younger consumers between the age group of 25-44
are most susceptible to be taken as victims. Seventy
four percent of females complained of fraud according
to the survey. Meanwhile, males only had a sixty plus
percentage of fraud complaints. Younger consumers had
over a seventy percent complaint statistic where Americans
over the age of 55 had a complaint percentage in the
In addition to the four fraud categories,
almost fourteen million consumers were victims to illegal
telephone slamming. These are cases where the consumer
is unlawfully billed for long distance and other charges
that they are not responsible for.
Taking all of these statistics into mind,
all consumers should be cautious with financial matters.
Be sure to research all companies and decisions before
taking any actions. If you have any questions about
a institutions legitimacy, have complaints, or just
simply need more information on this consumer fraud
visit the Federal Trade Commission web sire at http://www.ftc.gov
or call 1-877-382-4357.