Fraud Complaints Rise, Led by Angst over Banks and Government Benefits

Tuesday, March 05, 2013

 

If complaint tallies are any indication, Californians are troubled a little more by identity theft than they used to be, but are bothered a lot more by just about every other kind of fraud.

The Consumer Sentinel Network (CSN), an online database of complaints gleaned from hundreds of local, state, federal and foreign sources, ranked California third in identity theft complaints per capita, behind Florida and Georgia, in 2012. That’s about a 5.4% rate increase over 2011, although the state’s rank didn’t change.

But fraud and other complaints in California jumped 17.6%, catapulting the state from 20th place to 11th. Overall, Californians complained of being defrauded out of $201.7 million last year, and that’s with only 57% reporting a loss number.

Out of 233,928 California complaints in 2012, 80% were “fraud and other categories.” Among them, debt collection was No. 1 at 13%, followed by banks and lenders (9%), shop-at-home and catalog sales (6%), internet services (5%), impostor scams (5%), telephone and mobile services (4%), auto-related complaints (4%), credit cards (3%), foreign money offers and counterfeit check scams (3%), and prizes, sweepstakes and lotteries (3%).

The other 20% of complaints were about identity theft. The most common form involved government documents or benefits fraud (33%), followed by credit card fraud (19%), phone or utilities fraud (10%), employment-related fraud (8%), bank fraud (8%) and loan fraud (3%).

While most categories showed some kind of increase between 2011 and 2012, California complaints about identity theft related to government documents or benefits fraud virtually doubled to 15,250. Complaints about banks and lenders increased 74%, to 17,243.

The database providing this information, run by the Federal Trade Commission (FTC), logged 2 million new entries last year and keeps 8 million archived for use by law enforcement and consumer groups. Network members who contribute data include the FTC, the FBI, the U.S. Postal Service, hundreds of state law enforcement agencies and the Financial Services Commission of Saskatchewan, Canada.

The FTC annual report on the database noted that half the complaints nationally came from victims who had made their initial contacts online, 38% via email solicitations and 12% on fraudulent websites. 

The database was begun in 1997 primarily to collect data on fraud and identity theft, but it also gathers complaints about credit reports, mortgages, debt collection, lending and other subjects. Fifty-two percent of complaints conveyed to the database last year were about fraud; 18% were identity theft; and 30% had a range of subject matter.

–Ken Broder

 

To Learn More:

New FTC Report Highlights Top 10 Consumer Complaints for 2012 (California Public Interest Research Group)

2012 Consumer Sentinel Network Data Book (Federal Trade Commission) (pdf)

2011 Consumer Sentinel Network Data Book (Federal Trade Commission) (pdf)

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