FTC says ID theft tops consumer complaints

By Christopher S. Rugaber

Associated Press

WASHINGTON — Consumers reported more than 670,000 cases of fraud and identity theft in 2006 that cost them $1.2 billion in losses, the Federal Trade Commission said in its annual report this week.

For the seventh straight year, ID theft was the most common complaint, the FTC said, accounting for 36 percent, or 246,035, of the complaints.

ID theft complaints have leveled off after a steep increase earlier this decade. The number of ID theft complaints jumped from almost 162,000 in 2002 to a record 246,882 in 2004, slightly higher than last year’s number, the agency said.


Credit card fraud was the most common form of identity theft, the FTC said, making up 25 percent of the complaints, followed by phone or utilities fraud and bank fraud.

At least some of the credit card fraud came from data breaches at companies that track consumer information. ChoicePoint Inc., for example, which provides credit information and other consumer data to insurance and finance companies, agreed in January 2006 to pay the FTC a $15 million penalty to settle charges that its security procedures violated consumers’ privacy rights after thieves infiltrated the company’s massive database.

And TJX Cos., the parent company of retailers T.J. Maxx, Marshalls, and other stores, said Jan. 17 that hackers had broken into a computer system that handles its credit and debit card transactions. Credit card companies have told customers to watch for suspicious activity in the wake of the breach.

After identity theft, shop-at-home and catalog frauds were the second-leading cause of complaint, accounting for 7 percent or almost 47,000 complaints in 2006, followed by fraud in prizes, sweepstakes and lotteries, which made up 7 percent of complaints.

The next most common were Internet services and computer complaints, which accounted for 6 percent of the total, and 5 percent of complaints came from frauds at Internet auction Web sites, such as the popular one run by eBay Inc.

The amount lost in consumer frauds has increased steeply in recent years, jumping from $569 million in 2004 to $1.2 billion in 2006, the agency said.

The average loss reported was $3,257, the report said. And 184 consumers reported losing $1 million or more in 2006, the agency said.

The metropolitan areas with the highest rates of consumer fraud complaints in 2006 are Greeley, Colo.; Albany-Lebanon, Ore; and Napa, Calif.


Napa also experienced the highest rate of identity theft, the report said, followed by Madera Calif., and McAllen-Edinburg-Mission, Texas.

The FTC said it received 5,860 fraud complaints and 2,872 identity theft complaints from Minnesota consumers last year, ranking the state 33rd in ID-theft complaints per 100,000 people. The top fraud complaints for Minnesota involved prizes, sweepstakes and lotteries, which accounted for 12 percent of the state’s total, followed by shop-at-home and catalog frauds at 10 percent, Internet services and computer complaints at 9 percent, Internet auctions at 9 percent and foreign money offers at 5 percent.

The annual report is based on data collected by the FTC and over 115 other organizations, including law enforcement agencies, such as the FBI, and private groups such as the Better Business Bureau.

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