Authors: Anderson, Keith B.
Publication: Staff Report of the Bureaus of Economics and Consumer Protection, Federal Trade Commission
Year: 2007
Focus Area: Related survey
Relevance: Understanding the prevalence and impact of fraud and developing suitable prevention strategies depends upon an accurate, comprehensive knowledge of fraud: its rates, victims, and costs. The FTC Survey is one of the most comprehensive compendiums of fraud-related information.
Summary: This article discusses the second FTC Fraud Survey, conducted in 2005. Contacting 3,888 total adults by phone, the study collected information on consumer experience involving fraud.
- An estimated 13.5% of U.S. adults – 30.2 million consumers – were victims of one or more types of fraud in the year prior to the survey.
- There were an estimated 48.7 million incidents of fraud during this one year period.
- More consumers were victims of fraudulent weight-loss products (~4.8 million adults) than of any of the other specific frauds covered by the survey (followed by foreign lotteries and billing for buyers’ clubs, at ~3.2 million adults each).
- Victim likelihood varied by: age, education, and comfort with the amount of debt one has.
- Those with more debt, or those who indicated being uncomfortable with their level of debt, were more likely to be victims of fraud (including unrelated fraud, such as weight-loss scams).
- Older consumers (65+) were significantly less likely to indicate being victims of fraud than younger adults (35-44).
- Means of communicating fraud was fairly evenly distributed among print (27%), internet (22%), and television/radio (21%) mediums, with an additional 8.4% by telemarketers.
- The median amount reported lost was $60. Work-at-home frauds seem to have the greatest cost, averaging at $200 per incident.
Author Abstract: In 2003, the Federal Trade Commission commissioned a survey of consumer experiences involving fraud to learn more about the types and extent of fraud perpetrated on U.S. consumers. The results of that survey are discussed in Consumer Fraud in the United States: An FTC Survey, which was published in August of 2004 (“FTC 2004”). In late 2005, the Commission conducted a second survey of consumer fraud. This report details the results of the 2005 survey. The survey and this report will help the FTC better serve fraud victims through targeted law enforcement and education.
