FTC: Imposter scams, identity theft, and debt collection top consumer grumbles

ftc-imposter-scams-identity-theft-and-debt-collection-top-consumer-grumbles
Credit: Federal Trade Commission

The FTC fielded more than 3 million complaints in 2015

The Federal Trade Commission found few surprises in its annual summary of consumer complaints – offensive debt collection activities, identity theft, and imposter scams were the main offenders in 2015.

Imposter scams have been in the news of late because the Internal Revenue Service issued a report in January that said that aggressive and threatening phone calls by criminals impersonating IRS agents continues to plague taxpayers. The Treasury Inspector General for Tax Administration in January said it has received reports of roughly 896,000 contacts since October 2013 and have become aware of over 5,000 victims who have collectively paid over $26.5 million as a result of the scam. The IRS also noted recently that there has been a 400% surge in phishing and malware incidents in this tax season alone.

+More on Network World: IRS Scam: 5,000 victims cheated out of $26.5 million since 2013

The IRS has also been involved on one of the identity theft issues, saying recently that 700,000 taxpayers may have had their personal information stolen in a security breach last year.

The complaint categories making up the FTC top 10 are:

1. Debt Collection 

2. Identity Theft   

3. Imposter Scams        

4. Telephone and Mobile Services     

5. Prizes, Sweepstakes and Lotteries 

6. Banks and Lenders    

7. Shop-At-Home and Catalog Sales 

8. Auto-Related Complaints     

9. Television and Electronic Media     

10. Credit Bureaus, Information Furnishers and Report Users

+More on Network World: 26 of the craziest and scariest things the TSA has found on travelers+

Here a some details about the FTC complaint list:

Abusive debt collection was 29% of overall complaints. The FTC brought a record number of new cases, banned bad debt collectors, talked with industry, and found new ways to do outreach. While debt collection complaints rose to the top spot among complaint categories, the report notes that this was due in large part to a surge in complaints contributed by a data contributor who collects complaints via a mobile app. This change caused a spike in complaints related to unwanted debt collection mobile phone calls.

Throughout 2015, the FTC said it ramped up enforcement against companies violating laws protecting consumers from illegal debt collection practices. The agency coordinated the first federal-state-local initiative (Operation Collection Protection) to combat the problem, leading 70 partners to bring more than 130 actions. In 2015, the FTC also directly filed 12 actions against 52 defendants for illegal debt collection practices, permanently banned 30 companies and individuals from the industry and obtained nearly $94 million in judgments against debt collectors.

Identity Theft: Identity theft complaints were the second most reported, increasing more than 47 percent from 2014 on the back of a massive jump in complaints about tax identity theft from consumers. Identity theft complaints had been the top category for the previous 15 years. Tax- or wage-related fraud (45%) was the most common form of reported identity theft, followed by credit card fraud (16%), phone or utilities fraud (10%), and bank fraud (6%). Other significant categories of identity theft reported by victims were loan fraud (4%) and employment-related fraud(3%).

Thirty-seven percent of identity theft complainants reported they contacted law enforcement. Of those victims, 89% indicated a report was taken. Missouri is the state with the highest per capita rate of reported identity theft complaints, followed by Connecticut and Florida, the FTC stated

During 2015, the FTC launched a major advance to help identity theft victims: When you use IdentityTheft.gov, you'll get a personal recovery plan that walks you through each recovery step, tracks your progress and adapts to your changing situation, and pre-fills letters and forms for you.

Imposter scams: These are scams where con artists impersonate government officials or others remained the third-most common complaint in 2015. The FTC brought cases, shut down an operation that claimed to work for Medicare, issued dozens of blog posts, and partnered with consumer groups and other federal agencies to host webinars, town halls, and twitter chats, the FTC said.

States of confusion: The report includes some interesting state-by-state data. For example, Florida took the top spot, with Georgia and Michigan ranking second and third highest per capita rate of fraud and other types of complaints. The highest per capita rate of reported identity theft came from Missouri – giving a whole new meaning to “The Show Me State.” Next on the list were Connecticut and Florida. But here’s an important caveat: We’re talking about reported complaints, which means there’s no way to accurately differentiate between states with a high incidence of fraud and identity theft vs. states with savvy consumers who are more likely to file a complaint if they’ve been victimized, the FTC stated

Complaint Central: The FTC received more than 3 million complaints in 2015 -- up from 2.5 million in 2014. The Consumer Sentinel Network (CSN) which is the secure complaint database of the FTC contains almost 12 million complaints dating from calendar year 2011 through calendar year 2015. (In addition, the CSN contains over 16 million do-not-call complaints from this same time period.

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