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The �鶹��ý Trade Commission today released a statistical survey of fraud in the United States that shows that nearly 25 million adults – 11.2 percent of the adult population – were victims of fraud during the year studied. Certain racial and ethnic minorities were much more likely to be victims of fraud then non-Hispanic whites. American Indians and Alaska Natives were the ethnic group most likely to be victims: nearly 34 percent had experienced one or more frauds in the preceding year. Seventeen percent of African Americans were victims; over 14 percent of Hispanics were victims; and over 6 percent of Non-Hispanic whites were victims.

“We found that American Indians and Alaska Natives, African Americans, and Hispanics are more likely to be victims of fraud than non-Hispanic whites,” said Howard Beales, Director of the FTC Bureau of Consumer Protection. "These findings will help us fine-tune our Hispanic Law �鶹��ý and Outreach Initiative, and explore additional opportunities to target frauds aimed at communities which are at risk."

The survey of 2,500 randomly chosen consumers shows that consumers with high levels of debt were more likely to be victims of fraud. Three of the top four categories of fraud related to credit, including credit-repair scams often targeted at those carrying high debt loads or having bad credit.

The most frequently reported type of consumer fraud was advance-fee loan scams, in which consumers pay a fee for a “guaranteed” loan or credit card. Four and a half million consumers – 2.1 percent of the U.S. adult population – paid advance fees but did not receive the promised loan or card. In fact, some consumers reported that more than once during the last year they paid fees to get loans or credit cards they did not get.

Buyers’ club memberships or bills for unordered publications was the second most commonly reported fraud category in the survey. Some four million consumers – 1.9 percent of the U.S. adult population – were unwittingly billed for memberships they did not authorize or publications they did not order.

Credit card insurance scams and credit repair were the third and fourth most common frauds identified in the survey. While federal law limits consumers’ credit card fraud liability to $50, fraudsters sell credit card insurance by falsely claiming that card holders face significant financial risk if their credit cards are misused. An estimated 3.3 million consumers bought unnecessary insurance against the unauthorized use of their credit cards.

Some fraudsters convince consumers that they can help them remove truthful, negative information from their credit report, or establish a new credit record. They can’t, and credit repair schemes are illegal, but two million consumers paid for “credit repair” services the year prior to the survey.

“The results of our survey indicate that fraud in the U.S. is a serious problem,” said Beales. “We have brought many enforcement actions against these types of scams in the past, and we will bring more in the future.”

The survey reveals that 33 percent of fraud victims first learned about a fraudulent offer or product from print advertising in newspapers, magazines, direct mail, catalogs, or posters. Telemarketing was the first source of contact in 17 percent of the frauds. Only 14 percent of fraudulent offers were promoted using Internet and e-mail; television or radio advertising account for only 10.6 percent of fraudulent offers.

Women and younger consumers are more likely to complain if they have been victims of fraud, the survey found. An estimated 74.5 percent of female victims complained. For males, the complaint rate was 10 percentage points lower. Similarly, almost 75 percent of consumers under the age of 35 complained, compared to only 55.4 percent of consumers between 55 and 64.

According to the survey, consumers between the ages of 25 and 44 are most likely to be fraud victims. Eleven percent of them were victims, compared to 8.7 percent in the 45 to 54 year bracket, 6.1 percent of consumers aged 55 to 64, and only 4.7 of consumers 65 years and older.

The top 10 frauds listed in the report include:

• Advance-fee loan scams – 4.55 million victims;
• Buyers clubs – 4.05 million victims;
• Credit card insurance – 3.35 million victims;
• Credit repair – 2 million victims;
• Prize promotions – 1.8 million victims;
• Internet services – 1.75 million victims;
• Pyramid schemes – 1.55 million victims;
• Information services – .8 million victims;
• Government job offers – .65 million victims; and
• Business opportunities – .45 million victims.

In addition to the fraud categories, the survey found that an estimated 13.9 million consumers were victims of telephone “slamming” – unauthorized and illegal changes in long distance telephone service.

The Commission vote to release to survey was 4-0, with Commissioner Orson Swindle not participating.

The FTC has publications to help consumers spot and avoid scams. They include:
Just When You Thought It Was Safe ... Advance-Fee Loan “Sharks” Alert, Credit Card Loss Protection Offers: They’re the Real Steal, and, Credit Repair: How to Help Yourself.

Copies of the survey are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at . The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File. No. P01 4412)