Fraud…Once Again the Number One Consumer Complaint – Part 1 of 2

Top 2011 Consumer Complaints Reported to CSN database – Part 1

Consumer complaints received by the Federal Trade Commission, state organizations, Federal agencies (including the U.S. Postal Inspection Service and the FBI’s Internet Crime Complaint Center), and Better Business Bureaus (BBB) are secured on an online data base only available to law enforcement called the Consumer Sentinel Network (CSN).  This data has existed since 1997 and has a retention policy of five years; so there is data since 2007.

Consumer complaints totaled 1,813,080 in 2011, 1,460,368 in 2010 and 1,419,030 in 2009; which were increases of 24 and 29 percent respectively. The complaints were broken down into three main categories: fraud (55 percent), identity theft (15 percent) and other (30 percent).Part 1 discusses the fraud highlights and Part 2 will discuss identity theft.

Fraud Highlights

A total of 990,242 or 55 percent of complaints were related to fraud and consumers paid over $1.5 billion to fraudsters. The average amount paid was $2267 in 2011, compared to $2662 in 2010.  Approximately 68 percent of those reporting a complaint also reported the amount paid, which was much lower than the 81 percent in 2010.

The largest proportion (51 percent) of fraud complaints were from those who didn’t pay anything to fraudsters. The next highest group represented 14 percent of fraud complaints paid between $1,001 and $5,000 to fraudsters.  The third represented 8 percent and paid between $101 and 250.

Payments methods were broken down by wire transfer (50 percent), credit cards (16 percent), bank account debit (13 percent), cash and cash advance (7 percent), check (7 percent), money order (6 percent) and telephone bill (1 percent).

Sixty percent of fraud complaints gave the method of initial contact. Of this group, 43 percent were by email, 13 percent via an Internet website and 7 percent by mail.

The fraud complaints were segmented by age, and most were from ages 20 to 69, with fewer from the “19 and below” and the “70 and above” age groups. The group with the highest number of complaints was from the 50 to 59 age group (23 percent), followed by the 40 to 59 age group (20 percent); the lowest number was from the 19 year old and below age group.

Fraud complaints by age:

19 years and below 2 %

20 to 29 years 15%

30 to 39 years 17%

40 to 59 years 20%

50 to 59 years 23%

60 to 69 years 15%

70 years and above 7%

The states with the highest per capita rate of reported fraud and other complaints were Colorado, Delaware and Maryland.

Credit Expert Witness, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Civil Penalty, Credit Cards, Credit Report, Identity Theft, Money & Identity

This post was written by John Ulzheimer