Know about consumer fraud

Consumer fraud is when the general public is intentionally deceived by a group of companies. It can also be deceived by an individual or by a single company. There has been an increase in the numbers of consumer fraud which is largely due to the growth of the Internet. Identity theft is the one which is most widely recognized these days. This type of fraud involves bank employment, phone fraud, credit card and utilities fraud. The victims of identity theft were around 10 million Americans in 2004 which resulted in people losing almost $5 billion. There are some other consumer fraud categories which are very common and they are: auctions for the Internet, services of Internet and computers, catalog sales or shop at home, offers for foreign money, prizes and lotteries, fee loans in advance, opportunities to work from home and telephone services.

The Rise of Consumer Fraud

There are many forms in which fraud can take place. When someone deceives another for the sake of personal gain, it is called fraud. Some synonyms for fraud are swindle, cheat and trick. Most of the times money is involved but not always as some people do it for personal recognition. When a group of companies, an individual or a single company intentionally deceives the general public, it is called Consumer Fraud.

Fraud has grown a lot in the recent days as a criminal activity. The growth of international commerce and the Internet facilitates it. For people who have been using the Internet for E-mail purposes know the variety of scams that seem so fraudulent in the first look. These numbers are increasing and it is being said that in future it will continue to grow.

It usually takes two in a successful fraud just like other human activities. The fraudsters are very skilled in their area of expertise which is deception and they play with the victim’s naivety. Many a times, the victims do not even report it to the police or file a report as they are too ashamed of it. Loss of huge amounts of money and international intrigue has been featured in some high profile cases by the victims. “if it seems to good to be true, it probably is”, would help many people in saving money but unfortunately fraud is rising a lot.

The theft on the identity of an individual or “Id Theft” is a type of fraud which is very often on the national news. In this case the repercussions are very grave and it can also take months and years to get solved. The number of people who are victims of identity theft per year is almost 10 million and it costs $5 billion to the consumers and $48 billion to the businesses. This information is given by the Federal Trade Commission (FTC). An average of 81 hours is spent by the victims trying to clear their names, according to a survey. But a third of those people surveyed have been unable to repair the damage.

Consumer complaints regarding identity theft are detailed by the Federal Trade Commission Annual Report in 2004. Also, the fraud related complaints of the top ten categories were filed with the FTC in 2004. Since five years, identity theft has been on the top of the list of complaints and it accounted for 39% of the 635 and 173 consumer fraud complaints were filed with the agency last year.

The top categories for 2004 of consumer frauds are:

• Internet auctions constitute 16%

• Shop-at-home/Catalog sales constitute 8%

• Consumer complaints and Internet services constitute 6%

• Foreign money offers constitute 6%

• Prizes/sweepstakes and lotteries constitute 5%

• Credit protection and advance fee loans constitute 3%

• Work-at-home and business opportunities constitute 2%

• Telephone services constitute 2%

• Miscellaneous services constitute 12%

The report contained other findings:

• 53% of all the complaints reported due to fraud were related to Internet-related complaints

• Washington, DC;, CA; and Las Vegas-Paradise, NV ,San Jose -Sunnyvale-Santa Clara were the major metropolitan areas which had the highest per-capita rates of complaints which were concerning Consumer Fraud

• The most common type of reported theft of identity was the Credit Card Fraud which was followed by bank fraud, phone or utilities fraud and employment fraud

• Phoenix-Mesa-Scottsdale, AZ; CA; and Las Vegas-Paradise, Riverside-San Bernardino-Ontario NV were the metropolitan areas which had the highest per-capita rates of reported identity theft

Millions of consumers are helped each day by the FDC to battle identity theft. The steps which the commission recommends to the people who think that their identities might have been stolen are:

• A fraud alert should be put on your credit file by contacting any one out of the three major credit bureaus

• The accounts you know or believe are tampered with or opened fraudulently should be closed

• A police report should be filed and if necessary one should contact legal assistance

• A complaint with the FTC should be filed. An ID theft/fraud database is maintained by the commission that helps the law enforcement to initiate and built identity theft cases

FTC has some other steps also which the consumers should follow for other frauds and it also recommends legal assistance.