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Ryan Gregory, CFE

The Federal Trade Commission (FTC) is a U.S. federal agency charged with protecting consumers from unfair, deceptive and fraudulent practices in the marketplace, and ensuring competition by enforcing antitrust laws. In addition, the FTC also collects consumer complaints around data security, deceptive advertising and Do Not Call Violations, which are then made available to law enforcement agencies around the world.

On January 23, 2020, the FTC announced access to data showing insights into their refund program. This data is presented online in an interactive dashboard which details consumer refunds, “state by state and case by case” the press release states.

The FTC has also posted dashboards that include consumer reported fraud trends, case details and complaint information for past and current years that are beneficial to our community of risk and compliance professionals.

Data highlights

The 2019 data shared publicly by the FTC is available on Tableau Public and currently has 12 interactive data visualization dashboards, as well as a Data Guide. In 2019 the FTC received more than 1.7 million reports of fraud and more than 650,000 reports of identity theft. The imposter scam, with a nearly 50% increase from 2018, was the No. 1 reported type of fraud with a median loss of $666. Credit card fraud was most the reported type of identity theft with nearly 272,000 reports submitted. The metropolitan area of Homosassa Springs, Florida had the highest number of per capita reported fraud complaints — 1,140 per 100K population. This was followed by Las Vegas-Henderson-Paradise, Nevada with 912 reports per 100K population. Credit card fraud and identity theft have seen the most significant increase in the amount of reports submitted to the FTC from late 2018 into 2019.

This data collected by the FTC shows that the government imposter scam has been the top fraud since 2014 with losses occurring by wire or gift card. In 2019, there were 389,892 cases reported of fraudsters posing as agents from the Social Security Administration, Health/Human Services (Medicare), Internal Revenue Service (IRS) or law enforcement officers.

In the provided refund dashboard on Tableau, we can explore detailed refunds issued to consumers and their case details. The FTC reports that $136 million in refunds were issued in 2019 directly from the FTC to consumers. The case details provide great insight and examples that can be used by UDAAP (Unfair, Deceptive, or Abusive Acts or Practices) Compliance professionals in job training and case examples. There are currently 69 cases in this dashboard. Here are two examples of the available information.

Mobile money code

In the case of Mobile Money Code, the refund dashboard shows that after a settlement was reached, $645,000 worth of refunds have been mailed to more than 12,000 recipients.* The FTC alleges that several individuals and their related companies duped consumers by advertising secret codes that could be used online in order to make consumers substantial incomes. The FTC findings show that instead of secret codes, the consumers were given generic software that assisted in building mobile-friendly websites. Consumers were then contacted with spam emails sent by affiliated marketers. The promises of high earnings and lack of clarity in the emails sent to consumers led to allegations by the FTC of deceptive practices and violating the CAN-SPAM Act.

Uber

In a judgement against Uber, 88,799 recipients are being mailed a median refund amount of $218.00 due to alleged misrepresentations of driver’s earnings and auto finance lease terms by the FTC.* The FTC alleges that Uber claimed on its website that annual median earnings by drivers was misrepresented and that the FTC could only find that 10% of drivers earned the claimed income amounts. In the auto finance lease terms findings, FTC alleges that drivers received worse rates on average than those advertised, and the unlimited mileage advertised in leases were untrue as the lease itself came with mileage limits. As part of the judgement, a stipulated order states that Uber is prohibited from misrepresenting driver earnings and auto and finance lease terms.

This cyber tool is used by law enforcement around United States and select international law enforcement agencies. The data contributors to this network include task forces, nonprofits, financial institutions and consumer protection divisions. The culmination of this data through the FTC’s Consumer Sentinel Network provides another tool in assisting compliance and risk professionals who wish to incorporate consumer complaint data into risk solutions and training programs.

*Refund amounts and case details may have been updated since the writing of this article.

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