Consumer fraud is very common, from unscrupulous business owners to scammers and fraudsters who are trying to get access to your personal and financial information.
Issuing a consumer complaint against a company or seller can be an effective way to get your money back and help protect future consumers.
In this guide, you’ll learn about consumer complaints, consumer fraud, online shopping scams, and how to protect yourself. If you want to file a consumer complaint or report consumer fraud we highlight a step-by-step process you can follow, including how to find up to date attorney general information in your state.
What are consumer complaints?
Consumer complaints are grievances or an expression of dissatisfaction on the consumer’s behalf towards the responsible party, this is usually a seller or a business owner.
Consumer complaints generally occur before reporting consumer fraud. Complaints report unfair business practices and annoyances and commonly occur before money has changed hands with a business or seller.
If you’ve been defrauded out of money or personal information from a seller or business owner, then this is elevated to consumer fraud. There is overlap between the two as you’ll report complaints and fraud to similar government agencies and third-party organizations.
Most common types of consumer complaints
The FTC reports over 2.68 million consumer complaints every year. A lot of these complaints reference exploitative or abusive business practices, while others alleged fraud.
Here are some of the most common reasons for consumer complaints:
1. Sweepstakes and lotteries
These include phone calls, emails, mail, and even websites that offer promotions for free prizes, sweepstakes, and foreign lotteries. These “get something for nothing” scams seek to exploit your finances.
2. Impostor scam
This occurs when a scammer pretends to be a government agency, relative, or retailer and attempts to extract sensitive personal or financial information. Usually, this is done over the phone, but can be done via email as well.
3. Internet auctions
The most common complaints related to internet auctions include the non-delivery of goods, defective items, and late delivery. These can occur on sites like Craigslist, eBay, Facebook Marketplace, and more niche bidding sites.
4. Foreign money offers
Foreign money offers are typically letters or emails that offer an opportunity to share in a multi-million dollar opportunity. In exchange for helping transfer money out of the country, you’ll receive a percentage.
5. Internet services
The main issues with internet service providers are free trials, undisclosed charges, service issues, and problems with cancellations. A lot of complaints related to internet companies are because everything takes place online, there is often no physical storefront to complain to.
6. Car sales
These complaints involve misrepresented advertising, defective vehicles, faulty repairs, deceptive financing, and more. This includes new and used car dealerships along with auto repair shops.
7. Construction work
The most common construction-related consumer complaints include shoddy work, failure to complete a job, and failure to have proper licensing. These complaints are most often filed by new homeowners and people doing home remodels.
What is consumer fraud?
Consumer fraud refers to deceptive business practices or fraudulent business practices that lead to consumers losing money or other assets. When these activities lead to a loss on the side of the consumer it constitutes fraud.
The fraud can involve individual sellers, scammers, and even established businesses. The groups of people most at risk to experience fraud are senior citizens and college students, however, all consumers can be susceptible.
The damages from consumer fraud can range from the hundreds to thousands of dollars. If you fall victim to consumer fraud from scammers it’s unlikely you’ll recover your money, however, if it’s a tangible business there’s a greater likelihood you’ll be reimbursed.
Most common types of consumer fraud
Here are some of the most common types of consumer fraud that you’ll want to be aware of, so you can stay protected.
The coronavirus pandemic has created entirely new types of fraud schemes. Scammers will pose as government officials and tell a person that certain grants or aid is available. To receive the grant you’ll be told to call a number and pay a processing fee to collect the funds.
Additional COVID-19 scams attempt to obtain access to your medical records and sensitive personal information by posing as health care officials.
Unfortunately, identity theft is very common, as more than 14 million Americans are the victim of identity theft each year.
Identity theft fraud occurs when a person uses your personal information, credit card number, banking information, or Social Security number to commit fraud or other crimes.
Upfront fee fraud
Upfront fee fraud also called advance fee fraud, is a type of scam that makes certain promises in exchange for a fee. Some of the common claims include:
- A promise to send you products or cash
- An offer to participate in a special deal or opportunity
- Asking for help removing funds from another country
When you receive a call from a scammer that’s asking for upfront fees, victims will rarely see their money or hear from the scammer again.
Debt elimination fraud
Debt collection or elimination scammers make promises of debt elimination or reduction in exchange for an upfront fee or membership fee. Victims of these schemes will never see the money they paid upfront. Depending on the additional information you gave the scammer, this can have other negative effects as well like identity theft.
This fraud most commonly takes place via email. Scammers will pose as a government official asking for help transferring funds out of the country, in exchange for a percentage of the total funds.
They convince the victims to provide their bank account numbers and other identifying information to send the checks, then end up draining the accounts.
Cashier’s check fraud
With a cashier’s check fraud scammers will take advantage of the trust that people place in cashier’s checks. They’ll use fraudulent checks in order to avoid payment or remove funds from your account.
When you deposit a fraudulent check into your account, the bank will make the funds available, even if the check hasn’t cleared yet. Once the check is returned as unpaid, the bank will reverse the deposit and collect the amount back from your account.
Bank Fraud, or high yield investment fraud, involves individuals or companies promising huge profits with little risk if they choose to invest.
Scammers can use fake documents that appear to be legitimate or make false claims about the sources of their investment knowledge.
When a scammer uses the internet to obtain personal or financial information it’s known as phishing. This can be done via email, pop-ups, and other digital means.
The goal is to get you to click a link, or make you give away your sensitive personal information. These messages appear to be coming from legitimate companies or individuals when in reality you’re just dealing with a scammer.
Most common online shopping scams
The rise of online shopping and the level of trust that consumers now place into buying things online has caused a massive uptick in online shopping scams. In this year alone internet fraud complaints are up by nearly 40%.
The industries that are most likely to have online shopping scams include:
- Pets and pet products
- Automobiles and car parts
- Clothing and footwear
- Electronics and electronic accessories
Beyond the industries above, here are the most common types of online shopping scams to be aware of:
1. eCommerce Fraud
eCommerce fraud can involve both scam websites and sellers, along with customers who are trying to get items for free or using stolen credit card information.
The most common types of eCommerce fraud include identity theft, credit card fraud, fraudulent charges, and returns. This affects both customers and eCommerce store owners.
As a store owner you can protect yourself in the following ways:
- Have verification of cardholder info in place
- Keep records of fraudulent buyers
- Add spam verification to weed out bots
- Encourage buyers to create an account before purchase
Here’s how you can protect yourself as a consumer:
- Research the website and social media before you place an order
- Read the security, privacy policies, and disclaimer on the site
- Only shop on websites that have a secure HTTPS connection
- Read online reviews and ratings from third parties like the Better Business Bureau (BBB)
2. Online auction fraud
Online auction fraud is one of the most common types of fraud online. Online auctions are incredibly popular, including sites like eBay.
A lot of people experience successful online auctions, but some run into fraud and end up bidding on damaged or misrepresented goods or even never receiving the product.
Before you decide to bid on any goods online make sure that you do your due diligence on the site. This includes reading reviews about the auction site, the product, and the seller.
You’ll also want to make sure that the site allows for refunds and product returns.
You can also protect yourself further by paying via a third-party such as PayPal, instead of entering your credit or debit card information directly on the auction website.
Also, be wary of any seller that requests a direct bank transfer, since there’s no way to dispute the charges if you don’t receive the item, or it’s defective in some way.
3. Fake websites
Another common scam is a fake website scam. In this type of scam, you’ll come across a website that resembles a legitimate website. These can be difficult to distinguish and can have similar or stolen logos, content, payment options, product pictures, and more.
In some cases, this information is scraped from the legitimate website.
A lot of these false online stores will sell luxury items like jewelry, electronics, and clothing for low prices. There’s a good chance you won’t even receive the item, but if you do it could be a knock-off version.
One of the biggest ways to see if it’s a scam is the payment method. Cybercriminals will typically ask you to pay via wire transfer, gift cards, or money order.
Here are some tips for keeping yourself safe and avoiding getting scammed by fake online retailers:
- Make sure the URL is the actual company URL
- If the discount is too good to be true, it probably is
- Ensure the site has an HTTPS connection (this is required for securely processing online payments)
- Check out the website copyright to see if it aligns with the company
How to report consumer fraud
If you have an issue during a transaction, you can attempt to work out the issue with the seller, or site owner. However, if they’re non-responsive you can file a formal complaint.
Here’s a step-by-step process you can follow to submit a consumer complaint or report consumer fraud and take the necessary steps to try and get your money back.
1. Collect the necessary documents
Gather all the supporting documents related to your purchase. This includes receipts, contracts, work orders, warranties, photos, and more. You can also print out any emails or support logs you’ve had with the company or individual seller.
2. Contact the seller
Next, you’ll want to get in touch with the company. You can use the sample consumer complaint form from USA.gov to explain the issue you’ve had with your product or service.
You can send the complaint directly to the salesperson you’ve been dealing with. You can also reach out to their customer support team, or even management if you aren’t getting a response.
If the seller is unresponsive, then you’ll want to work with third-party agencies.
3. Contact third parties
If the company or seller doesn’t resolve the issue, then you can seek support from a government agency or consumer organization.
- With the Federal Trade Commission at ftc.gov/complaint.
- File a complaint with the Better Business Bureau. They will try to resolve the issue with the company.
- With the Office of the Attorney General (more on how to find the right office below)
- File a complaint with your local or county consumer protection agency.
- File a complaint with econsumer.gov if you’re filing a complaint with an item you bought online or purchased an item from a company or seller outside the US.
If you believe you’ve been a victim of fraud or a scam, then you can file a complaint with the FTC or the Internet Crime Complaint Center (IC3) if it’s a scam from the outside of the US.
You can file complaints with all of the above agencies as long as they’re relevant to the consumer fraud you experienced.
Finding the right attorney general
Every single state in the United States, including U.S. territories has an attorney general who serves as the chief legal officer across their jurisdiction and acts as a representative of the public interest.
The job of the attorney general is to uphold the laws of the state and county and help to ensure the rights of the citizens are protected.
To find the right attorney general in your state visit the National Association of Attorneys General website and filter the list by state. This website showcases the Attorney General’s currently in office and has up to date contact information and phone numbers.
If your complaint is small it might not be enough for the attorney general to investigate, but it can help to bring the issue to their attention if multiple complaints do arise. Your complaint will be used to learn about the misconduct and determine if further investigation is necessary.
Keep in mind, the Attorney General’s Office does not provide legal advice, if you’re seeking legal representation you should consult with an attorney.
4. Seek legal help
If the options above don’t work and your complaint hasn’t been resolved, then you can seek legal action.
You can pursue the complaint in court through small claims court, or through a civil lawsuit if the amount of money involved is large enough.
Small claims courts can provide a fast and effective way to resolve consumer problems. Most small claims courts allow claims up to several thousand dollars and you can present your case without the help of an attorney. In some states, private attorneys are not even allowed in small claims court.
If the claim is too large for small claims court, then you’ll need to pursue your claim through a civil suit. To file a civil suit you’ll need to find a lawyer who has experience with consumer fraud claims.
The most common fee structure for consumer fraud cases is on a contingent fee basis. Here the lawyer will be paid a percentage of the recovery if you win, and no fee if you lose. This can end up being cheaper for you, since there’s a chance of getting your money back, with no additional fees incurred to you. Keep in mind that there’s no guarantee that an attorney will take your case, but it is an option if you’ve already exhausted all of the avenues mentioned above.