Wednesday, February 15, 2000

	NEWS RELEASE
	For release: February 16, 2000
	Contact: Holly Anderson, 202-835-3323 ext. 114 Tara Finck, 202-835-3323 ext. 116

     Consumers lost over $3.2 million to Internet fraud last year in incident reports to the National Consumers League's Internet Fraud Watch. A 38 percent increase in Internet fraud complaints in 1999 coupled with an average consumer loss of as much as $580 indicate an urgent need for consumer education about shopping online. That's why the National Consumers League is issuing a special warning today, as part of National Consumer Protection Week, February 14-18. This year's theme is "Shopping Safely from Home."
     "Many consumers shop online and have good experiences," said Susan Grant, director of the Internet Fraud Watch, "but the increases we've seen in both the number of complaints and the amounts of money lost point to the need for more consumer protection and increased education."
     As expected, online auction sales remained the number one Internet fraud for 1999 increasing from 68 percent of the frauds reported to the IFW in 1998 to an overwhelming 87 percent in 1999. Other top frauds for 1999, in order, are non-auction sales of general merchandise, Internet access services, computer equipment/software, and work-at-home plans.
     "Despite the fact that auction complaints are number one," said Grant, "we are seeing even higher losses per consumer to other Internet frauds such as general merchandise and computer hardware or software purchases." Consumers lost an average of $580 per person to online purchases of computer equipment or software and $465 to general merchandise sales (anything from jewelry to T-shirts that were not purchased on an online auction). The average loss per consumer to online auction sales was $293.
     In the incidents reported to IFW, consumers overwhelmingly pay for goods with checks and money orders, losing out on the rights they would have if they had used a credit card. Perhaps because many consumers are not able to pay with a credit card on online auctions, credit cards accounted for only three percent of those transactions. But consumers can usually charge other online purchases and credit cards accounted for only 29 percent of general merchandise sales, and 23 percent of computer equipment and software purchases.
     "Paying with a credit card is the safest way to shop online," said Grant. "Federal law protects credit card users if they don't get what they were promised or if unauthorized charges are made on their accounts."
     The National Consumers League has released a brochure to educate consumers about shopping safely online. The "Be E-Wise: How to Shop Safely Online" brochure is available on NCL's two Web sites, www.nclnet.org and www.fraud.org, and by calling 800-639-8140.

Graphs

• Top 10 Frauds for 1999
• Total Reports By Year, 1996-1999
• Top 20 Consumer Locations for 1999
• Top 20 Company Locations for 1999
• Initial Fraud Contact Methods
• Percent of Contact Method by Fraud Type
• Most Common Payment Methods for 1999
• Age Range for Consumers Contacting IFW for 1999

     The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to identify, protect, represent, and advance the economic and social interests of consumers and workers. NCL is a private, nonprofit membership organization.

     NCL runs the National Fraud Information Center, which was created in 1992, and the Internet Fraud Watch, which was created in 1996, operating in tandem with the NFIC. Consumers from across the United States can call or email their complaints and questions to the Center. NCL staff provide advice and tips on how to spot possible telemarketing or Internet fraud and how to report it. Fraud reports from consumers are sent within minutes to over 200 appropriate law enforcement agencies, including the Federal Trade Commission and state attorneys general.

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