Identity theft is top consumer complaint

Identity theft was the No. 1 fraud complaint in a government-maintained database that keeps track of consumer gripes, according to a Federal Trade Commission.

In 2007, the database received more than 800,000 complaints, with 32% of those about identity theft and the rest, or 68%, pointing to various other types of fraud, according to FTC.

Overall, consumers reported fraud losses of more than $1.2 billion, with a median monetary loss per person of $349, according to the FTC report.

“This is the information that consumers have reported. It’s not every complaint that exists,” said John Krebs, an attorney in the FTC’s consumer protection bureau. Information about complaints is self-reported and unverified. The database, called “consumer sentinel,” collects information about fraud and identity theft from the FTC and other organizations.

Twenty-three percent of identity-theft complaints pointed to credit-card fraud, 18% cited phone or utilities fraud, 14% claimed employment fraud, and 13% cited bank fraud.

No identity theft ‘silver bullet’

There’s no “silver bullet” to prevent identity theft, said Susan Grant, consumer protection director with Consumer Federation of America. “One of the problems with identity theft is that in many cases consumers aren’t sure how it happened, which makes preventing it from happening difficult,” she said.

Sometimes consumers don’t realize their information has been improperly used until they apply for credit and it turns out that their good credit has turned bad, Grant said. “A lot of times people discover identity theft long after it actually happened, and they have no idea who has their information or how they got the information,” she said.

According to the Identity Theft Resource Center, about one-third of survey respondents spent four to six months dealing with their situation. “Even after the thief stops using the information, victims struggle with the impact of identity theft,” according to ITRC. “That might include increased insurance or credit-card fees, inability to find a job, higher interest rates and battling collection agencies and issuers who refuse to clear records despite substantiating evidence of the crime. This ‘tail’ may continue for more than 10 years after the crime was first discovered.” Visit the ITRC site.

Report details

Fraud-related complaints totaled 68% of 2007’s database. Fraud related to shop-at-home/catalog sales was the leading complaint category, with 8% of overall complaints.

Internet services accounted for 5% of complaints, followed by foreign money offers with 4% and prizes/sweepstakes and lotteries with 4%. Some other fraud complaint categories were computer equipment and software, Internet auctions and health care.

Among fraud complaints for which consumers reported the method of payment, 33% cited credit cards, 28% reported wire transfer, and 17% reported bank account debit. Checks, cash/cash advance, money order and telephone bill were also cited.

Internet solicitations were cited the most frequently among fraud complaints for which a company’s method of initial contact was reported. Just under half of these complaints said email was the contact method, while another 15% cited other Internet contact methods. For the rest, 14% cited mail, 11% cited phone and 11% cited other methods.

Recover from identity theft

For identity-theft victims, the FTC recommends taking these steps:
  • Place a fraud alert on credit reports and review credit reports. Contact any of the three consumer reporting companies to place the fraud alert.
  • Close accounts believed or known to have been tampered with. Follow up in writing, and include copies, rather than originals, of documents.
  • File a complaint with the FTC, which can refer complaints to other agencies and companies for further action, and investigate companies for violations.
  • File a report with local police or law enforcement in the area where the identity theft took place.

One Response to “Identity theft is top consumer complaint”

  1. I am not sure I totally agree with y theft is top consumer complaint | Identity Theft Stories

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