Common fraud victimizes state
Despite widespread attention to the problem of identify theft, most Washington consumers are falling victim to garden-variety forms of fraud, a federal official said in Spokane Tuesday.
About two-thirds of all consumer complaints fielded by the Federal Trade Commission involve “traditional” fraud, such as telemarketing scams and bogus sweepstakes prizes, said Charles Harwood, regional director of the FTC, based in Seattle.
About a third of 2005’s complaints handled by the FTC were due to identity theft, Harwood said during a press conference to mark National Consumer Protection Week. And only one of every two identity theft cases involved an online scam.
More and more of the scams taking place start on the Internet but then rely on tried-and-true mail or check-fraud scams that have been used for decades, said Gerry Neff, technical services manager for Spokane-based Numerica Credit Union.
Last year, for example, a Tri-Cities woman in her 20s posted her resume on job site Monster.com. A while later she received an e-mail asking if she wanted a job as a secret shopper.
She agreed and soon received in the mail a check for $2,800. Neff said she was told to deposit the money in her credit union and summarize how well Numerica handled the transaction.
She was then told to withdraw $2,500 in cash and go to a Tri-Cities Wal-Mart. There, she asked the store to draft a money order for $2,500 and mailed it to the company that “hired” her, which was based in eastern Canada. The remaining $300 in her account was her compensation for the work, she was told.
When Numerica discovered the original $2,800 check was bogus, the woman tried to track down the scam artist, without success. Since she didn’t have $2,500 in funds to cover the withdrawal, Numerica lost that amount, Neff said.
Neff said the example shows how people with a trusting nature can be victimized and overlook the common-sense reality that no company hands out $300 for very little work.
According to Harwood’s 2005 data, Washington state ranked second in the nation in per-capita reports of consumer fraud. Washington state residents last year reported losses from consumer fraud of $11 million. The actual amount is larger because not all victims report their losses, Harwood added.
Alaska had the nation’s highest per-capita number of consumer fraud cases, said Harwood. Idaho ranked 20th.
Mary Ann Cross, a technical services representative at Numerica, said that of all consumer fraud problems reported to the credit union, “phishing” is the most common.
Phishing is an online attempt to obtain a person’s financial account information in order to make purchases or transfer funds.
The second most common Numerica complaint is “skimming,” the illegal swiping of a person’s credit card by a clerk who then hands the personal information to someone else.
“We had a member who just discovered a series of credit card purchases in Florida” that had to come from skimming, said Cross.
The third most frequent problem she sees is garden-variety fraud — someone finding out a credit card number and racking up bills, either online or in a retail store.