U.S. Tallies Consumer Fraud Loss at $437 Million

Americans reported losses of $437 million last year to identity theft and fraud as scam artists made themselves at home on the Internet, according to federal statistics released Thursday.

The Federal Trade Commission said it received more than half a million consumer complaints in 2003 as scam artists financed their spending sprees with other people’s credit cards and hucksters sold nonexistent products through online sites.

But Americans are becoming more aware of the problem and act quickly when they discover they’ve been victimized, said Howard Beales, head of the FTC’s consumer protection division.

Identity theft -- the practice of running up bills or committing crimes in someone else’s name -- topped the list with 215,000 complaints, up 33% from the previous year.

Internet-related fraud, up 51% from 2002, accounted for more than half of the remaining complaints as scammers found victims through websites or “spam” e-mail, according to an FTC report.

Auction fraud was the most prevalent form of Internet scam, the FTC said, followed by complaints about e-commerce and Internet access services.

Consumers lost an average of $1,868 per incident, though that figure was skewed by a few reports of losses of more than $1 million. Half of those who filed reports said they lost less than $228.

The FTC estimated last year that identity theft has affected one in eight U.S. adults.

Beales said the FTC was fielding more inquiries than complaints, a sign that consumers are taking steps to protect themselves.

Credit card companies also have gotten better at stopping fraud, he said.

“There was a time when pre-approved credit offers seemed to be a significant problem for identity theft. There has been a lot of response to that problem, and today there’s no personally identifiable information in a preapproved credit offer that’s not in any other piece of mail you get,” he said.