To Whom Do Victims of Mass-Market Consumer Fraud Complain?

Utilizing data from surveys of mass-market consumer fraud sponsored by the Federal Trade Commission in 2005, 2011, and 2017, this paper explores whether victims of such mass-market consumer frauds complain to anyone beyond their families and friends about being victimized, and if they do complain, to whom they complain. It also explores whether victims with different demographic characteristics are more or less likely to complain.

In about 45 percent of instances, victims complained to someone beyond their family and friends. This might have been the seller or manufacturer of the fraudulent product of service; a provider of payment services such as a credit card company, a bank or another payment service; a Better Business Bureau; or a government agency. This figure is stable across the three surveys included in this analysis.

While there is little, if any, variation in complaint rates across the three surveys, there is considerable variation in the likelihood that victims of different types of frauds complained. Those who were billed for an item that they had never agreed to purchase were the most likely to report having complained – with 61 percent of those victims indicating that they had complained to at least one party. Fifty-eight percent of those who paid for a product or service that they never received reported having complained. For victims who experienced other types of frauds, no more than 40 percent complained. Of those who purchased fraudulent credit card insurance or a fraudulent computer repair, less than 20 percent complained.

Not surprisingly, complaints were most frequently directed at someone directly involved in the transaction – a seller or a manufacturer. Thirty percent of victims reported having complained either to a seller or to a manufacturer. About 12 percent complained to a credit card company, a bank, or some other payment service provider.

Less than 3 percent of victims complained to a government entity. Somewhat more than half of these – 1.5 percent of victims – complained to a local authority – the local police or a local consumer agency. Less than 1 percent complained to a state Attorney General or other state authority or to a federal agency. Just over 2 percent of victims reported having complained to a Better Business Bureau. Together, 4.8 percent of victims complained to a BBB or to a government agency.

To whom a complaint is directed varies somewhat with the type of problem being considered. While a seller or manufacturer is the most frequent recipient of complaints for most of the types of fraud considered here, the percentage of victims who complained to a seller or manufacturer ranged from 43 percent among victims who paid for an item that they never received to 6 percent for victims of fraudulent computer repair offerings. The percentage of complainants who complained to a governmental entity or the BBB likewise varied with the type of fraud – with around 20 percent of victims of a debt-relief fraud complaining to one of these entities, while less than 1 percent of those who purchased a fraudulent weight-loss product did so.

Rates of complaining differ somewhat depending on the demographic characteristics of the consumer who was reporting on the experience. Consumers who were more educated were more likely to complain about their experiences. Looking at race and ethnicity, Latinos were less likely to complain than were those in other racial and ethnic groups, though overall the differences across racial and ethnic groups are not statistically significant. There was no statistically significant relationship between the age of a victim and likelihood of the victim complaining.