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EcommerceBytes-NewsFlash, Number 945 - February 02, 2005 - ISSN 1539-5065    3 of 5

Internet Auction Fraud Among FTC's Top 10 Consumer Complaints for 2004

By Ina Steiner
February 02, 2005

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Reports of Internet auction fraud and identity theft grew in 2004. The Federal Trade Commission (FTC) released its annual report detailing consumer complaints about identity theft and listing the top 10 categories of fraud-related complaints filed with the FTC in 2004. For the fifth year in a row, identity theft topped the list of complaints, accounting for 39 percent of the 635,173 consumer fraud complaints filed with the agency last year.

Internet auction fraud was the top category of consumer fraud complaints for 2004, and made up 48% of the top products/services for Internet-related fraud complaints last year. Complaints in the Internet Auction category grew from 51,003 in 2002 to 83,161 in 2003 to 98,653 in 2004.

The FTC enters consumer complaints and complaints from other law enforcement and consumer protection agencies in its Consumer Sentinel database. The data is accessible to more than 1,200 law enforcement agencies across the country and in Canada and Australia to help law enforcers coordinate actions, avoid duplication, spot trends, and leverage law enforcement assets.

The top categories of consumer fraud complaints for 2004 include:

  • Internet Auctions - 16 percent
  • Shop-at-Home/Catalog Sales - 8 percent
  • Internet Services and Computer Complaints - 6 percent
  • Foreign Money Offers - 6 percent
  • Prizes/Sweepstakes and Lotteries - 5 percent
  • Advance-Fee Loans and Credit Protection - 3 percent
  • Business Opportunities and Work-at-Home - 2 percent
  • Telephone Services - 2 percent
  • Other (miscellaneous) - 12 percent

Other findings from the report include:

  • Of the 635,173 complaints received in 2004, 246,570 were identity theft reports and 388,603 were fraud complaints.
  • Internet-related complaints accounted for 53 percent of all reported fraud complaints.
  • The major metropolitan areas with the highest per-capita rates of complaints concerning consumer fraud were Washington, DC; San Jose-Sunnyvale-Santa Clara, CA; and Las Vegas-Paradise, NV.
  • Credit card fraud was the most common form of reported identity theft, followed by phone or utilities fraud, bank fraud, and employment fraud.
  • The major metropolitan areas with the highest per-capita rates of reported identity theft were Phoenix-Mesa-Scottsdale, AZ; Riverside-San Bernardino-Ontario, CA; and Las Vegas-Paradise, NV.

Copies of the report, "National and State Trends in Fraud and Identity Theft," are available in PDF format at http://www.consumer.gov/sentinel/pubs/Top10Fraud2004.pdf

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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