Consumer Fraud in the United States, 2011: The Third FTC Survey

Title: Consumer Fraud in the United States, 2011: The Third FTC Survey

Author: Anderson, Keith B.

Publication:  Staff Report of the Bureaus of Economics and Consumer Protection, Federal Trade Commission

Year: 2013

Focus Area: Prevalence, Victim Profiling, Fraud Surveys

Relevance: Surveys of fraud prevalence in the United States help define the scope of the problem and allow enforcement agencies to tailor their prevention and education efforts. The FTC Survey is one of the most comprehensive surveys of fraud-related information.

Summary: This report details the findings from the third survey commissioned by the Federal Trade Commission to examine consumer fraud in the United States. The survey was conducted from late 2011 to early 2012.

Consumers were asked questions designed to learn whether they had been victims of specific types of fraudulent transactions.  The survey also provides information about the mechanism through which the fraudulent transaction occurred.  Finally, the survey investigated the relationship between certain demographic characteristics and the likelihood of fraud victimization.

Key findings include:

  • During 2011, an estimated 25.6 million adults (10.8 percent of the adult population) were victimized by fraud.
  • The top 5 fraud categories were:
  1. Weight-loss Products (estimated 5.1 million victims)
  2. Prize Promotions (estimated  2.4 million)
  3. Unauthorized Billing for Buyer’s Club Memberships (estimated  1.9 million)
  4. Unauthorized Billing for Internet Services (estimated  1.9 million)
  5. Work-at-Home Programs (estimated  1.8 million)
  • The Internet was the most common way victims first learned about offers that turned out to be fraudulent and the most common way orders were placed.
  • High school graduates were the least likely to have been victimized by fraud.
  • Survey respondents who were more willing to take risks, who recently experienced a negative life event, and who had more debt than they could handle were more likely to have been victimized by fraud.
  • In general, consumers age 45-54 were the most likely to have been victimized by fraud. Those under age 45 were somewhat less likely to have been victimized than those 45-54, and those 55 and over were the least likely to have experience fraud.  However, those between 55 and 74 had the greatest chance of being victims of fraudulent prize promotions.

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