Rise in Fraud Reports is Unrelenting
A nearly three-fold increase over the past decade in the number of fraud and related complaints filed with the Federal Trade Commission has pushed the total to 1.7 million filings in 2015, according to the government’s consumer 2015 data book released this month.
As Squared Away reported recently, older Americans are often the most vulnerable, as their cognitive abilities decline or they become more socially isolated. Not surprisingly, the FTC said Florida had the highest rate of reported fraud per resident last year (followed by Georgia, Michigan, Texas, and Nevada).
One reason for the increase in complaints is that people are increasingly aware of fraud and more likely to report it. Another is that fraud-reporting agencies such as law enforcement and consumer groups are increasingly aware they can file complaints with the FTC. But 1.7 million allegations of fraud, identity thefts, and other scams is, by any yardstick, a lot of complaints.
The typical loss was $400 for an individual fraud complaint. There is evidence that more people are getting savvy: a smaller share of the people who filed 2015 complaints said they turned over any money to their scammers than in previous years.
Experts blame the Internet for the rising incidence of fraud attempts. But most fraud still comes over the telephone and even cell phones, often targeting the elderly. Popular at this time of year are scams in which imposters posing as IRS agents call up the elderly or immigrants, demanding immediate payment; legitimate IRS notifications are always sent by mail. Another example are calls from the 809 area code (the Dominican Republic) that routinely pop up on telephone calls – sometimes they call three times in a row – in a scam designed to induce people to run up large long-distance charges.
Judging by the FTC’s new fraud report, too many people are answering the phone.