FTC: Identity theft remains top consumer complaint

Identity theft remained top of mind among US consumers last year, but complaints about internet auction fraud dropped noticeably, according to data released by the US Federal Trade Commission (FTC).

More than a quarter of a million ID theft complaints were lodged with the agency last year, accounting for 36% of the 674,000 complaints the FTC received. That number is down slightly from 2005, when ID theft accounted for 37% of all complaints.

This marks the seventh consecutive year that identity theft has been ranked number one. The second-largest number of complaints, 7%, came from consumers who were unhappy with products they had ordered from catalogues.

Internet-related complaints were up too. According to the 2006 data, they made up 60% of all fraud complaints. Last year, they accounted for 46%.

But one area of internet fraud declined noticeably: internet auctions. In last year's report, complaints relating to products purchased on online auction sites like eBay made up 1 % of the FTC submissions. In the 2006 numbers released earlier this week, that number had plummeted to 5%.

The FTC has made identity theft a priority over the past few years, and the agency maintains a website where consumers can learn how to protect themselves and file complaints if they've been victimised. The FTC is also one of the agencies heading up the US government's Identity Theft Task Force, created by President George Bush in 2006.

"It's not surprising to me that identity theft is number one because we're the ID theft clearing house," says FTC chairman Deborah Platt Majoras during an interview at the RSA Conference in San Francisco.

The fact that the FTC saw a slight drop in the percentage of its complaints that related to ID fraud appears to back up a downward trend reported last week by Javelin Research.

The research firm said that ID fraud was down in the US, with the cost of this type of crime dropping 12% in 2006.

The FTC stressed that its consumer complaints data is merely anecdotal. However, the agency is working on a more rigorous study of identity fraud trends, and is expected to release that data in the coming months.

Majoras says it is unclear whether ID fraud is increasing, but hopes that the Javelin numbers are right.

Her sister was the victim of identity theft recently, after falling prey to a phishing attack, she says.

"I said to her, 'You can't fall for stuff like that,'" she says.