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EcommerceBytes-NewsFlash, Number 245 - January 23, 2002 - ISSN 1539-5065    1 of 2

FTC Says Internet Auction Fraud Is #2 Complaint

By Ina Steiner
January 24, 2002

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Internet Auctions accounted for 10% of the consumer-fraud complaints in 2001, following behind Identity Theft, which accounted for 42% of complaints. The data comes from the Consumer Sentinel database, a central database that collects complaints from more than 50 law enforcement and private sector partners. Leading data contributors include the National Fraud Information Center, Canada's Phonebusters, the Internet Fraud Complaint Center, and numerous local Better Business Bureaus.

The top 10 list of consumer fraud complaints from the Consumer Sentinel database are:

  1. Identity Theft (42%)
  2. Internet Auctions (10%)
  3. Internet Services and Computer Complaints (7%)
  4. Shop-at-Home and Catalog Offers (6%)
  5. Advance Fee Loans and Credit Protection (5%)
  6. Prizes/Sweepstakes/Gifts (4%)
  7. Business Opportunities and Work at Home Plans (4%)
  8. Foreign Money Offers (4%)
  9. Magazines and Buyers Clubs (3%)
  10. Telephone Pay-Per-Call/Information Services (2%)

"Consumers who report their complaints to the FTC are helping law enforcement find and stop rip-off artists," said Howard Beales, Director of the FTC's Bureau of Consumer Protection. "The complaints in the Consumer Sentinel database are a valuable tool for state and federal consumer protection agencies that investigate and prosecute fraud."

The FTC has tips to help consumers who want to protect themselves from fraud and deception:

  • Protect your personal information. It's a valuable commodity. Only share your credit card or other personal information when you're buying from a company you know and trust.
  • Know who you're dealing with. Walk away from any company that doesn't clearly state its name, physical address and telephone number. A Web site alone or a mail box drop should raise suspicions.
  • Don't rely on oral promises. Get all promises in writing and review them carefully before you make any payments or sign any contracts. Read and understand the fine print in any written agreement.
  • Don't pay "up-front" for a loan or credit. Remember that legitimate lenders never "guarantee" a loan or a credit card before you apply, especially if you have bad credit, no credit, or a bankruptcy.

Consumers can file a fraud complaint with the FTC by calling toll-free 1-877-FTC-HELP (1-877-382-4357) or online at http://www.ftc.gov. Consumers can file identity theft reports by calling 1-877-ID THEFT (1-877-438-4338).

For more information on the Consumer Sentinel database and a list of the top fraud categories by state, visit http://www.consumer.gov/sentinel.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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