October 30, 2007
The latest Federal Trade Commission statistical survey of fraud in the United States 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.
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 blacks 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:
1) Fraudulent Weight-Loss Products (4.8 million victims)
2) Foreign Lottery Scams (3.2 million victims)
3) Unauthorized Billing - Buyers Clubs (3.2 million victims)
4) Prize Promotions (2.7 million victims)
5) Work-at-Home Programs (2.4 million victims)
6) Credit Card Insurance (2.1 million victims)
7) Unauthorized Billing - Internet Services (1.8 million victims)
8) Advance-Fee Loans (1.7 million victims)
9) Credit Repair Scams (1.2 million victims)
10) Business Opportunities (.8 million victims)
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:
Know with whom youre dealing: Do business only with companies that plainly provide their name, street address, and phone number.
Protect your personal information: Share credit card and other personal information only with companies you know and trust; never share it in email, regardless who is asking for it.
Take your time: Resist the urge to act now. Most any offer thats good today will be good tomorrow, too.
Read the small print: Get all promises in writing and read all paperwork before paying any money or signing any contracts.
Free means free: Throw out any offer that says you have to pay to get a gift or for something thats called free. If something is free or a gift, you shouldnt have to pay for it.
Report fraud: If you think youve been a victim of fraud, report it. Its one way to get even with a scam artist who cheated you. Complain online at www.ftc.gov or by phone at 1-877-FTC HELP.
The FTC uses a one-two punch to fight fraud, said Lydia Parnes, Director of the FTCs 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 www.ftc.gov -- not only to find out how to recognize a scam, but also to report it. Thats the best way to help end rip-offs of all kinds.