The Federal Trades Commission (FTC) released its annual report of consumer complaints (See entire report here). The study indicated that more than 1.8 million complaints were received in 2011, which was a 24 percent increase from 2010. The following are the top 10 types of complaints received by the FTC in 2011:
|
Rank |
Category |
No. of Complaints |
Percentage of Total Complaints |
|
1 |
Identity Theft |
279,156 |
15% |
|
2 |
Debt Collection |
180,928 |
10% |
|
3 |
Prizes, Sweepstakes, and Lotteries |
100,208 |
6% |
|
4 |
Shop-at-Home and Catalog Sales |
98,306 |
5% |
|
5 |
Banks and Lenders |
89,341 |
5% |
|
6 |
Internet Services |
81,805 |
5% |
|
7 |
Auto Related Complaints |
77,435 |
4% |
|
8 |
Imposter Scams |
73,281 |
4% |
|
9 |
Telephone and Mobile Services |
70,024 |
4% |
|
10 |
Advance-Fee Loans and Credit Protection/Repair |
47,414 |
3% |
The Center for Retirement Research at Boston College published a recent report explaining the increase in fraud (See entire report here). One explanation for the increase in the number of incidences of fraud is that people are feeling the effects of the recent financial turmoil our country has been facing. These types of factors make people more susceptible to “get-rich-quick-schemes”.
The report provided “Fraud’s Red Flags” to consider before entering into any deal:
- Looks too good to be true
- Offers a very high or “guaranteed” return at “no risk” to the investor
- Requires an urgent response or cash payment
- Charges a steep upfront fee in return for making more money on an unspecified date
- Suggests recipients do not tell family members or friends about the offer
- Lures prospective investors with a “free lunch”
- Comes unsolicited over the Internet, is of unknown origin, or comes from overseas
- Instills fear that a failure to act would be very costly
- Cannot be questioned, inspected, or checked out further
- Is so complex that it is difficult or impossible to understand
The main message of these reports discussed above is for all of us to be vigilant about our financial dealings.
