Fraudsters prey on Americans. They succeed in one of two ways. Either Americans do not protect their own interests, or the government does not do enough to prevent fraud and identify theft.
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Clever criminals have ways to stay ahead of their victims' defenses. The computer has become one of the main means of fraud against consumers. Without computer-driven fraud, companies like McAfee and Symantec that distribute online protection software would not get any businesses. It also provides a basis for consumer activists to complain about the unwillingness of social media sites like Facebook and Twitter to carefully guard the identity of their users.
We reviewed fraud and identify theft data published by the Federal Trade Commission in the Consumer Sentinel Network Data Book. According to the CSN, more than 1.3 million consumer fraud claims were filed in 2010. Of the 27 categories, fraud related to identity theft, debt collection, Internet services, and lotteries were the most prevalent. Consumers reported losing more than $1.7 billion in those complaints. The average amount lost was $594. "Eighty-six percent of the consumers who reported a fraud-related complaint also reported an amount paid," according to the report. In other words, the other 14% of Americans victimized were not sure what it cost them.
Consumer complaints vary widely by state. We picked the ten states with the largest percentage of total complaints per 100,000 people. States with large retirement populations were high on the list, although the government does not acknowledge this or provide any explanation for it.
We also analyzed what type of fraud was most prevalent in the most fraud-ridden states. Some areas have disproportionate trouble with lotteries. Others have problems with fraud related to personal government documents and debt collection. The government does not fully explain the differences in these trends from state-to-state either.