FTC Pleased by Growth of Complaint Database

Share this content:
Consumer Sentinel, the Federal Trade Commission's nationwide database of consumer fraud complaints, grew from 220,000 complaints in 2001 to 380,000 in 2002, and that's a good thing, the FTC's Howard Beales said yesterday.


The database's growth might not reflect a rise in fraud activity, but rather an increase in the rate at which consumers report fraud, said Beales, who directs the FTC's consumer protection bureau. Another factor is the success of FTC efforts to develop partnerships with outside law enforcement agencies that can contribute data to Consumer Sentinel.


Consumers are growing more aware of how to report incidents of fraud, Beales said. Their willingness to provide information helps law enforcement combat fraudulent marketing activity.


"The increase in complaints means that Consumer Sentinel is a richer resource for law enforcement," Beales said. "That's good news for consumers."


Losses reported by consumers in 2002 totaled $343 million, up from $160 million the previous year. For the second year in a row, identity theft topped the FTC's list of consumer fraud, accounting for 43 percent of complaints in 2002. The FTC's list of top consumer complaints in 2002 includes:


· Internet auctions, 13 percent.


· Internet services and computer complaints, 6 percent.


· Advance-fee loans and credit protection, 5 percent.


· Shop-at-home/catalog sales, 5 percent.


· Foreign money offers, 4 percent.


· Prize/sweepstakes and lotteries, 4 percent.


· Business opportunity and work-at-home plans, 3 percent.


· Telephone services, 2 percent.


· Healthcare, 2 percent.


· Magazines and buyers clubs, 2 percent.


About 29 percent of consumers reporting complaints were first reached via a Web site, Beales said. Another 25 percent were first contacted via unsolicited commercial e-mail or spam, more than those who were first contacted by telephone.


Fraudulent marketers often targeted vulnerable consumers, particularly those with financial difficulties who were susceptible to advance-fee credit and work-at-home offers, Beales said. Often, consumers took too-good-to-be-true offers at face value.


"Sometimes, it's just greed on the part of the person trying to make all these millions from Nigeria," he said.


close

Next Article in Marketing Strategy

Sign up to our newsletters

Company of the Week

Brightcove is the world's leading video platform. The most innovative and respected brands confidently rely on Brightcove to solve their most demanding communication challenges because of the unmatched performance and flexibility of our platform, our global scale and reliability, and our award-winning service. With thousands of customers and an industry-leading suite of cloud video products, Brightcove enables customers to drive compelling business results.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above