Top 10 Consumer Complaint Categories

 Source: FTC.  The Federal Trade Commission (FTC) has released its top 10 consumer complaint categories for 2012. For the first time ever, the agency received more than two million complaints. Of the two million complaints, 18 percent were related to identity theft. Of those 18 percent, almost half were related to tax or wage fraud.

The list of the top 10 complaint categories:

  1. Identity Theft – 369,132 complaints
  2. Debt collection – 199,721 complaints
  3. Banks and Lenders – 132,340 complaints
  4. Shop-at-Home and Catalog Sales – 115,184 complaints
  5. Prizes, Sweepstakes and Lotteries – 98,479 complaints
  6. Impostor Scams – 98,479 complaints
  7. Internet Services – 81,438 complaints
  8. Auto-Related Complaints – 78,062 complaints
  9. Telephone and Mobile Services – 76,783 complaints
  10. Credit Cards – 51,550 complaints

The FTC uses the Consumer Sentinel Network to record complaints throughout the year. The database is available to more than 2,000 civil and criminal law enforcement agencies across the country and helps agencies research cases and track targets.

Among the federal and state law enforcement agencies contributing to Consumer Sentinel are the Consumer Financial Protection Bureau, the U.S. Postal Inspection Service, the Federal Bureau of Investigation’s Internet Crime Complaint Center and the offices of 14 state attorneys general. Private-sector organizations contributing data include all Better Business Bureaus in the U.S. and Canada, PrivacyStar, Publishers Clearing House and others.

State regulators handle most insurance complaints and the FTC report does not track insurance as a category. However, in the identity theft statistics, 0.3 percent of complaints involved misuse of information for insurance purposes.


Over one million complaints were fraud-related. Consumers reported paying over $1.4 billion in those fraud complaints; the median amount paid was $535. Fifty-nine percent of the consumers who reported a fraud-related complaint also reported an amount paid.

Fifty-seven percent of all fraud-related complaints reported the method of initial contact. Of those complaints, 38 percent said email, while another 34 percent said the telephone. Only 9 percent of those consumers reported mail as the initial point of contact.

Florida is the state with the highest per capita rate of reported fraud and other types of complaints, followed by Georgia and Maryland.

Identity Theft

Government documents/benefits fraud (46 percent) was the most common form of reported identity theft, followed by credit card fraud (13 percent), phone or utilities fraud (10 percent), and bank fraud (6 percent).

Other significant categories of identity theft reported by victims were employment-related fraud (5 percent) and loan fraud (2 percent).

Complaints about government documents/benefits fraud increased 27 percentage points since calendar year 2010; tax or wage-related fraud accounted for the growth in this area, with 43.4 percent of identity theft victims reporting this problem in 2012. Employment-related fraud complaints, in contrast, have declined 6 percentage points since calendar year 2010.

Forty-two percent of identity theft complainants reported whether they contacted law enforcement. Of those victims, 68 percent notified a police department. Fifty-four percent of these indicated a report was taken.

Florida is the state with the highest per capita rate of reported identity theft complaints, followed by Georgia and California.

If you have any questions about your insurance and coverage for fraud, contact ACBI at 203-259-7580.

What You Need to Know About Tax-Related Identity Theft

Many victims of tax-related identity theft uncover the fraud after they have filed their returns, leading to delayed refunds and additional problems with the IRS and Social Security Administration.

“One way to stay ahead of the bad guys is to file your taxes early,” said Vicki Volkert, an IDentity Theft 911 fraud investigator, who has helped many customers resolve their tax fraud woes.

Here are some additional FAQs about tax-related identity theft from our experts:

Q: Why should I care about tax-related identity theft? I’m not a victim.
A: Tax-related identity theft is a growing problem that affects everyone—taxpayers, the U.S. government and, of course, victims themselves. The number of known incidents has increased more than twelvefold since 2008, according to a recent study from the U.S. Government Accountability Office. More than $5.2 billion of taxpayer money went to fraudsters who filed fake returns in 2011, the Wall Street Journal reported, and a watchdog agency claims that number is expected to reach $21 billion in the next five years. The costs are huge. And though you may not be personally affected yet, it could happen to you or someone you know.

Q: How does it work?
A: Tax-related identity theft usually takes one of three forms:

  • The identity thief uses a name and stolen Social Security number with bogus W-2 forms to collect a refund in the victim’s name.
  • The bad guy uses stolen information to get a job, which creates problems for the victim when the government wants taxes on income the victim never earned.
  • The fraudster creates a fake IRS or accounting website to con unsuspecting taxpayers into filing their returns — chock full of personal information — online.

Q: How can I tell if I’m a victim?
A: Knowing you’re at risk is key. Telltale signs that you may be a victim of tax-related identity theft include:

  • Notice from the IRS that more than one tax return was filed in your name.
  • Notice from the IRS that you’ve received wages from an unknown employer.
  • Email from the IRS requesting your personal information. Why? The IRS doesn’t initiate contact with taxpayers by email so such a communication is likely to be fake.

Q: How can I protect myself?
A: The best way to protect yourself is to file your taxes early. Beyond that, “it’s very difficult to protect yourself from this type of identity theft because there are no safeguards in place where they need to be, within the IRS,” said Raul Vargas, a fraud operations manager at IDentity Theft 911. Reduce your risk immediately by following these five basic best practices to safeguarding your personal information from identity thieves.

Q: How long will it take for me to get my refund?
A: A few years ago, IRS identity theft investigations used to take at least six months and, despite the headache, most victims eventually would end up with their rightful refund checks. Now IRS investigations are taking more than a year and require victims to go through a lot of red tape.

Q: Where can I get more information about the IRS and tax-related identity theft?
A: The IRS has a lot of online resources, including these identity protection tips, a taxpayer guide to identity theft, and information about how to report it to its Identity Protection Specialized Unit.

If you think you’ve been a victim of Identity Theft or if you have questions about your insurance coverage for such an event, call ACBI at 203-259-7580.

Reprinted from Chubb & Son, By Raul Vargas, Fraud Operations Manager, IDentity Theft 911

Identity Theft and Children: Unique Threats

Social Media and Identity Theft: What Parents Should Worry About

Social networking sites can present risks to children, but parents can help them make the right choices and protect their identity by following these five tips:

1. Keep the computer in plain sight. Make sure the family computer is placed in a public area, like the kitchen or family room, so children can’t hide what they’re doing. Parents should make it known to their children that they can check a child’s screen anytime, for any reason.
2. Children’s accounts should be an open book. Parents should make it known that a child needs parental permission to join social networking sites like Facebook or Twitter. They should then make it clear that as a requirement their children must hand over their login information and passwords. If parents think their children have set up “parent-friendly” accounts and are secretly using secondary accounts, parents can check a computer’s browser history to pinpoint what pages and profiles are getting the most use.
3. Instill the use of proper online etiquette. Parents should make it clear to their children that what a child posts online is visible to many people—including parents, relatives, friends, teachers, coaches, strangers, and people who have bad intentions. So children should be counseled not to post anything that’s inappropriate or damaging to their (or the family’s) reputation.
4. Enable social networking privacy settings. Privacy settings don’t guarantee that a child won’t post inappropriate things or that he or she is entirely protected, but they can limit the damage if an unfortunate comment or photo is posted.
5. Children should never post their locations or anything that can give away the family address. Parents should always make sure to disable geolocation settings on their children’s phones, as many phones and apps are factory-set to enable others to view locations. Parents also need to make sure their children know to never offer personal information to anyone online.

“Familiar Fraud”: An Identity Threat Unique to College Students (continued)

Here are five safety tips parents can share with their college-age children:

  1. Challenge Authority. Parents should encourage children to say “no” to requests for personal information, except when absolutely necessary.
  2. Monitor Your Credit Like Your Grades. As soon as students establish credit by getting student loans or credit cards, for example, they should start monitoring their credit. Students can go to annually for a free report.
  3. Avoid Sharing Technology. Students should be encouraged to update their computer security software and use strong alphanumeric passwords with combinations of special characters and capitalization for all of their online accounts and devices. If they really want to let someone else use their computer, have them set up a “guest” account.
  4. Use a Crosscut Shredder. Students should use it for all those preapproved credit offers. Dumpster-diving is epidemic on campus because thieves know most kids just throw them away unopened.
  5. Invest In a Document Safe. Students should lock up important papers such as student loan and enrollment documents, so they won’t be left lying around where anyone could nose through them.

If you have any questions or would like to be sure you have the proper coverage for Identity Theft, please contact ACBI at 203-259-7580.