Like most Americans, Virginians face growing threats from fraudulent, deceptive, and illegal practices.
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 2013 alone, the Consumer Sentinel received over 2.1 million consumer fraud, identity theft, and related complaints, with victims reporting losses of $1.6 billion. These figures represent a small increase over the previous year.
Virginia's Office of Attorney General (AG) tabulates complaints, law enforcement actions, and consumer protection actions (restitution, civil penalties, and attorney fees). In 2013, the AG's Office handled 28,276 telephone calls through its consumer hotline. This number is down slightly from the 30,163 calls it received in 2012.
The Federation of State Medical Boards (FSMB) tracks disciplinary actions taken against doctors -- revocations, surrenders, and probations / restrictions for medical licenses. During 2011, state medical boards took a total of 6,034 disciplinary actions against doctors nationwide, an increase of 382 actions from 2010.
How is Virginia Doing?
According to complaints made to the Consumer Sentinel in 2013, Virginia had the 11th highest rate of consumer fraud and other related problems: 497.5 per 100,000 population, and above the national average of 481.6. Virginians reported a total of 41,093 fraud and other cases in 2013, which ranked the Commonwealth 39th out of 50 states.
The top fraud categories, regardless of location, were:
- Banks and lenders
- Third party and creditor debt collection
- Impostor scams
- Auto-related complaints
- Telephone and mobile services
- Television and electronic media
Among peer states, North Carolina (423.0) and Tennessee (433.5) had lower consumer fraud rates than Virginia, while Maryland (572.2) was higher. Nationally, the lowest rate of fraud and other complaints in 2013 occurred in North Dakota, with 270.9 complaints per 100,000 population.
Virginia had the nation’s 16th highest identity theft rate in 2013 at 73.1 per 100,000 population. The national average for identity theft was 86.5. Tennessee's rate was 68.8 per 100,000 population, Maryland's was 95.5, and North Carolina's was 67.8. North Dakota had the lowest rate at 32.1.
In 2013, 6,037 Virginians reported some form of identity theft. The top types of identity theft include:
- Government documents or benefits fraud
- Phone or utilities fraud
- Credit card fraud
- Bank fraud
- Loan fraud
- Employment-related fraud
Data on the number of serious disciplinary actions taken by state medical boards against physicians shows that Virginia's rate in 2011 -- 3.11 per 1,000 doctors -- was 22nd highest in the nation. The national rate was 3.06 per 1,000 physicians. Among peer states, North Carolina was higher (3.56),while Tennessee (2.72) and Maryland (2.91) were lower. South Carolina had the lowest rate of disciplinary actions at 1.33.
Mediation and Enforcement Action
When there is a pattern of deception or other wrongdoing, the attorney general is authorized to take action to stop the illegal conduct, and, where appropriate, seek refunds for affected consumers. The Consumer Protection section of the Attorney General's Office serves as a central clearinghouse for the receipt, evaluation, investigation, and referral of consumer complaints. Complaints are either handled by the office or referred to the proper local, state, or federal agency with jurisdiction. The section also offers alternative dispute resolution services.
In 2013, 3,994 complaints were entered and 4,135 complaints (including those from previous years) were closed. In addition, 598 referrals were made to other agencies which had jurisdiction over the complaints. The number of complaints has increased in recent years. This growth is in line with the increased number of commercial transactions due to improved economic conditions and the transfer of consumer protection functions to the more prominent Office of Attorney General. (See Data Notes).
The Attorney General's Office undertook 10 major law enforcement actions in FY2013 that resulted in financial recoveries totaling $4.9 million. The number and amount of recoveries can vary widely from year to year, depending on specific cases. Many of the largest awards are the result of multi-state protection settlements, such as a $66.5 million settlement in 2012 against the nation's five largest mortgage servicers (Bank of America, Wells Fargo, CitiGroup, J.P. Morgan Chase, and Ally Financial/GMIC). In that case, charges for mortgage loan servicing and foreclosure abuses -- brought by joint action of 49 states and the federal government -- were related to the recent subprime mortgage crisis and housing market meltdown.
What Influences Consumer Protection?
Education, timely information, legislation, and effective administrative regulations and law enforcement all work together to reduce consumer fraud and identity theft and protect consumers of health care and other services.
What is the State's Role?
The state fights consumer violations in several ways by:
- educating residents to recognize scams and establish personal security protections
- enacting appropriate legislation
- enforcing regulations, and
- investigating and prosecuting offenders.
Within Virginia, responsibilities for protecting consumers are largely organized as follows:
- The Attorney General's Office enforces state and federal consumer laws, handles general consumer complaints, and prosecutes offenders.
- The Virginia Department of Agriculture's Office of Charitable and Regulatory Programs regulates charitable gaming and certain other industries not covered elsewhere.
- The Department of Health Professions issues licenses and regulates health care practitioners.
- The Department of Professional and Occupational Regulation licenses more than 40 occupations and professions. They range from architects and contractors to cosmetologists and professional wrestlers.
- The Department of Labor and Industry and the Department of Mines, Minerals and Energy enforce worker safety laws and regulations.
State rankings are ordered so that #1 is understood to be the best.
Data Definitions and Sources
Federal Trade Commission, Consumer Sentinel, "Consumer
Sentinel Network Data Book” (2008-2013)
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, financial products, and other complaints alleging misleading and deceptive practices, fake merchandise, and defective products. For these reasons, consumer fraud complaints reported in years previous to 2008 are not directly comparable to those reported as “consumer fraud and other” here.
Attorney General Counseling, Intake and Referral Unit and Consumer Recoveries Statistics
Special Request to Virginia Office of the Attorney General
Notes: In FY2012, complaint clearinghouse, dispute resolution and general consumer protection investigative functions were transferred to the Attorney General's Consumer Protection Section. They had been handled previously by the Office of Consumer Affairs within the Virginia Department of Agriculture and Consumer Services.
The amount in recoveries reported for any specific year may be adjusted upwards in the future because collection and post-judgment efforts are ongoing.
Federation of State Medical Boards. Summary of Board Actions. www.fsmb.org/fpdc_basummaryarchive.html
Public Citizen. Ranking of State Medical Boards’ Serious
Disciplinary Actions: (2008-2011, 2007-2009, 2006-2008,
2005-2007, 2004-2006, 2003-2005, 2002-2004)
Public Citizen computes the rate of serious disciplinary actions per 1,000 doctors using 3-year moving averages of state disciplinary rates to smooth out large fluctuations that can be caused by relatively small increases in the number of actions for small states. Information on the number of disciplinary actions is obtained from the Federation of State Medical Boards (FSMB), and data on total medical doctors is obtained from the American Medical Association.
See the Data Sources and Updates Calendar for a detailed list of the data resources used for indicator measures on Virginia Performs.