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Mar 07

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FTC Releases Annual Report of Consumer Complaints

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.

About the author

Anand Khemlani

I am a founding member of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA), Accredited in Business Valuation (ABV), a Certified Fraud Examiner (CFE) and am a licensed Real Estate Broker. I regularly serve as an expert witness involving results of my forensic accounting assignments and damage analyses. My resume is available on Fulcrum's website

Permanent link to this article: http://betweenthenumbers.net/2012/03/ftc-releases-annual-report-of-consumer-complaints/

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