Consumer Protection
Like most Americans, Virginians are facing growing threats from fraud and identity theft.
Why is This Important?
Consumer fraud and identity theft are growing problems across America. However, it is difficult to compare consumer protection statistics across states, as there is great variation in relevant state laws, definitions, standards of evidence and record keeping. The Consumer Sentinel, a database set up by the Federal Trade Commission, provides a limited view of consumer protection issues and trends, with a strong focus on fraud perpetrated via the Internet and telemarketing. In 2007 alone, the Consumer Sentinel received over 1.2 million consumer fraud, identity theft, and other complaints. Consumers reported losses of more than $1.8 billion.
How is Virginia Doing?
Of the complaints made to the Consumer Sentinel in 2008, Virginia had the 7th highest rate of consumer fraud and other complaints at 318 per 100,000 population and the 22nd highest identity theft rate at 82 per 100,000 population. Mirroring national trends, the rate of identity theft complaints increased markedly in 2008 from the year before.
Consumer Fraud
The
national consumer fraud
and other complaint average was 264.2 and
the national identification theft average
was 99.2 in 2008 (both per 100,000 population).
Virginians reported a total of 24,695 fraud
and other cases in 2008. The top fraud categories
reported by Virginians,
regardless of where the perpetrators were
located, were:
- Third party and creditor debt collection
- Internet services
- Shop-at-home / catalog sales
- Foreign money offers and counterfeit check scams
- Prizes / sweepstakes and lotteries
- Telecom equipment and mobile services
Nationally, the lowest rate of fraud and other complaints in 2008 was in Mississippi at 153.1 per 100,000 population. Tennessee's rate of consumer fraud complaints stood at 255.7; Maryland's was 347.6 and North Carolina had 250.8 complaints per 100,000 population.
Identity Theft
In 2008, 6,349, Virginians reported some form of identity theft. The top types of identity theft include:
- Credit card fraud
- Phone or utilities fraud
- Government documents or benefits fraud
- Bank fraud
- Employee-related fraud
- Loan fraud
Tennessee's
rate of identity theft
was 80.2 per 100,000
population, Maryland's
was 96.1 and North Carolina's
was 82.5. South Dakota
had the lowest rate at
33.8. No major metropolitan
area in Virginia fell
within the top 50 areas
for identity theft complaints.
What Influences Consumer Protection?
Education and information, legislation and effective law enforcement all work together to reduce consumer fraud and identity theft.
What is the State's Role?
The state's role is to educate residents on how to protect themselves, to enact appropriate legislation and enforce regulations, and to investigate and prosecute offenders. Within Virginia, the Office of Consumer Affairs at the Virginia Department of Agriculture and Consumer Services provides protection to consumers against fraudulent, deceptive and illegal practices in the marketplace. The Department of Health Professions issues licenses and regulates health care practitioners; the Department of Professional and Occupational Regulation regulates more than 30 occupations and professions; and the Department of Labor and Industry and the Department of Mines, Minerals and Energy enforce workforce safety.
In addition, various other agencies provide consumer information, including the Department for the Aging, the Department of Professional and Occupational Regulation and the State Corporation Commission. In terms of law enforcement, the Investigations Unit at the Office of Consumer Affairs handles consumer complaints that involve violations of the Virginia Consumer Protection Act. This unit works closely with the Office of Attorney General and local Commonwealth's Attorneys to stop illegal activities, and to pursue civil and criminal prosecutions.
Data Definitions and Sources
Federal Trade Commission, Consumer Sentinel, "Consumer
Sentinel Network Data Book” (2008) and “Fraud
and Identity Theft Complaint Data" (2004,
2005, 2006, 2007).
www.ftc.gov/sentinel/reports.shtml (updated
annually in February)
Note: In 2008, the Federal Trade Commission expanded the types of consumer complaints that it tracks to include complaints filed about debt collection, credit issues, and financial matters. In addition, state level reporting included a new category “fraud and other complaints” which consists of complaints about consumer fraud, complaints about financial products, and other complaints alleging misleading and deceptive practices, fake merchandise, and defective products. For these reasons, consumer fraud complaints reported in previous years are not directly comparable to those reported as “consumer fraud and other” here.
See the Data Sources and Updates Calendar for a detailed list of the data resources used for indicator measures on Virginia Performs.
