Consumers Report: The FTC Fraud Survey

The FTC provides useful information to consumers, and consumers provide useful information right back through periodic surveys that ask them to share the important details about their recent marketplace experiences. Last year, we asked people about their experiences with 17 types of fraud, and learned that nearly 11 percent of U.S. adults, or an estimated 25.6 million people, had paid for fraudulent products and services in 2011. Here’s what our researchers found:

• An estimated 5 million U.S. adults reported experiencing fraud related to weight loss claims. In these cases, although sellers said their products would help people lose a substantial amount of weight or lose weight without diet or exercise, the nonprescription drugs, dietary supplements, skin patches, creams and other products they bought didn’t work as promised.
• About 2.4 million people spent money on a fraudulent prize promotion. They were told they’d won a prize, lottery, money, or a free vacation, but they had to spend money or attend a sales presentation to get their winnings. They followed through as they were told, but they never got the prizes they were promised.
• Based on survey responses, an estimated 4 million U.S. adults were billed for services they hadn’t agreed to buy. About half were billed for a buyers’ club membership; the other half were billed by a company they’d never done business with — and never agreed to do business with — for internet-related services including internet access, website hosting, or website development.
• An estimated 1.8 million people paid for programs that made earnings claims for home-based businesses, but the work-at-home programs produced less than half the earnings promised. Because many buyers tried more than one program, work-at-home businesses accounted for an estimated 2.8 million incidents of fraud.
• The internet was the most-reported source of promotions of fraudulent products, followed by print ads, television and radio, and telemarketing calls.

For more details on how you can avoid fraud, read 10 Ways to Avoid Fraud and Common Online Scams. For more details on people’s experiences with fraud, read the FTC Fraud Survey.