NCL testifies before Senate, urges stronger protections against scams

February 1, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Highlighting the ongoing epidemic of fraud across the country, NCL Vice President of Public Policy, Telecommunications and Fraud John Breyault testified today before the Senate Committee on Banking, Housing, and Urban Affairs. Breyault advocated for stronger consumer protections alongside Carla Sanchez-Adams, a senior attorney at the National Consumer Law Center.

“When NCL last testified before this committee in 2021, we warned that peer-to-peer payment platforms such as Zelle, Venmo, Cash App, and PayPal had become ‘payment methods of choice for scammers.’ Unfortunately, the problem has only worsened since then,” Breyault told the committee. “No amount of consumer education, better disclosure, or ‘friction’ put into payment flows will solve this problem alone. The payment platforms where fraud occurs must have a bigger financial incentive to stop scams before they happen.”

The Federal Trade Commission, the primary federal agency for reporting fraud, continues to receive record numbers of complaints, with 5.4 million reports in 2022. Since the last time Vice President Breyault appeared before the Senate Banking Committee, median losses to scams nearly doubled, from $374 per incident to $650. The emergence of new and unregulated technologies, such as peer-to-peer payment apps and cryptocurrencies, has also facilitated staggering losses. Crypto-linked fraud losses exceeded $1 billion annually in 2022 and 2023.

“We are not winning the fight against fraud,” said Breyault. “We need Congress to Act.”

Breyault urged the Banking Committee to swiftly pass bills like the Protecting Consumers From Payment Scams Act and Senator Elizabeth Warrens (D-MA) Digital Asset Anti-Money Laundering Act of 2023 to crack down on scams targeting peer-to-peer payment apps and cryptocurrencies, respectively.

This was Breyault’s fourth time speaking before Congress on policy solutions to address the incessant scams targeting Americans daily. Breyault’s full written testimony can be found here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL applauds President Biden’s landmark AI executive order 

October 31, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Yesterday, President Biden signed an executive order to establish the most comprehensive standards to date regarding artificial intelligence (AI). The following statement is attributable to National Consumers League (NCL) Chief Executive Officer Sally Greenberg:

“NCL applauds the Biden Administration for centering consumers and workers in its landmark executive order addressing AI. It is critical that the development of artificial intelligence aligns with our democratic values, preserves civil rights, and protects consumers’ health and safety as well as our privacy. Importantly, the Biden Administration has made clear that there is no exception for AI from the law as it continues to model how policymakers should tackle this issue. While the president’s order is a critical step forward, Congress must pass a robust bill to ensure lasting and comprehensive federal law governing AI.”

As part of the sweeping executive order, federal agencies are to provide clear guidance to landlords, federal benefits administrators, and federal contractors to ensure that AI does not discriminate against consumers and beneficiaries. The president also addressed the potential harms to workers from the use of AI in workplace surveillance, job displacement, union-busting, and discriminatory hiring practices.

NCL has been advocating for consumers and workers in our push for AI regulation, including requiring the labelling of AI-generated content to minimize deception to users.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

 

Stop senior scams!

Happy Consumer Protection Week! While fraud can affect anyone, regardless of age and other demographic information, Fraud.org and NCL are putting the spotlight on scams targeting older Americans.

Top Ten Scams Report: Consumers reported massive uptick in crypto-linked fraud losses in 2022

February 6, 2023

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, 202-823-8442

WASHINGTON, D.C. — Reports of scams tied to cryptocurrencies drove a significant increase in median losses in 2022, according to the National Consumers League’s annual Top Ten Scams report. The report, published annually, analyzed more than 3,500 consumer fraud complaints filed with NCL’s Fraud.org campaign last year. 

The report found that the median loss for investment frauds reported to Fraud.org was $18,700, compared to $1,750 in 2021. The complaints in this category frequently described schemes where victims were encouraged to put money into cryptocurrencies and cryptocurrency-linked investments that later turned out to be fraudulent. Such scams drove an increase in the median loss for all frauds reported to Fraud.org to $950, an eleven-year high. 

“Both median losses and the share of incidents reporting losses are up,” said John Breyault, NCL vice president of public policy, telecommunications, and fraud and the director of the Fraud.org campaign. “New technologies seem to be driving these trends, from crypto-related schemes to scammers using new technology to move victims’ money around.” 

Bank account debit, which includes peer-to-peer platforms like Zelle and Venmo, was the second most frequently mentioned way that victims reported sending money to fraudsters in 2022 (27.17% of complaints that included a loss). Compare this to 2021 when bank account debit was mentioned in 11.2% of complaints that included a loss. 

The top ten scam categories reported to Fraud.org in 2022 were: 

  1. Prizes/Sweepstakes/Free Gifts 
  2. Internet: General Merchandise 
  3. Phishing/Spoofing 
  4. Fake Check Scams 
  5. Investments: Other (incl. cryptocurrency) 
  6. Advance Fee Loans, Credit Arrangers 
  7. Friendship & Sweetheart Swindles 
  8. Family/ Friend Imposter 
  9. Computers: Equipment/Software 
  10. Scholarships/Grants 

“While we’re collecting data to better inform our efforts to combat fraud, we’re also aiding victims and connecting them with resources,” said NCL Consumer Services Coordinator James Perry. “It’s important to remember the person behind each report.” 

Notably, the share of reports involving romance scams declined by 31%. This trend may be attributable to last year’s significant media coverage of this type of fraud following the success of fraud-focused shows like “The Tinder Swindler” and “Inventing Anna.”  

“In real time, we are seeing the benefits of a national discussion around these types of fraud” said NCL Public Policy Manager Eden Iscil. “Having an open conversation about something as sensitive as romance scams helps to destigmatize the issue, provide space for victims to seek help, and put pressure on digital platforms to prevent misconduct.” 

To view the full 2023 Top Ten Scams report, click here. 

Methodology 

The National Consumers League Top Ten Scams report analyzed 3,503 complaints submitted by consumers to NCL’s Fraud.org campaign in 2022. This data is self-reported by victims and should not be considered a nationally representative sample. NCL shares complaint data with a network of law enforcement and consumer protection agency partners who combine it with other data sets to identify trends in fraud and build cases. 

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit https://nclnet.org.

NCL urges FTC to prohibit user review manipulation

January 10, 2023

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, 202-823-8442

WASHINGTON DC. – The National Consumers League (NCL) this week filed comments in support of a Federal Trade Commission (FTC) regulation to ensure the reliability of user reviews. In its comments, NCL urged the FTC to prohibit user reviews from individuals who did not purchase a product or service (or are misrepresenting their experiences with a product or service) and to prohibit sellers from manipulating consumer reviews. In addition, the League advocated for the Commission to require hosts of user reviews to implement measures to protect review integrity, such as requiring purchase verification.  

“Consumers frequently cite user reviews as a key factor when deciding what to buy,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud. “As a result, fake endorsements steer billions of dollars each year towards certain products and away from competitors. The impacts range from buyers receiving goods of poorer quality than expected to serious safety risks.” 

NCL also encouraged the FTC to prohibit the commercial exploitation of social media engagement metrics, such as buying and selling likes, comments, or shares. Such practices can be used to boost fraudulent product reviews and endorsements, allowing bad actors to manipulate social media platforms to broaden their reach. 

“Right now, it is extremely easy to spend a few dollars and receive hundreds of likes, followers, or other signals that a product or service is of high quality,” said Eden Iscil, NCL Public Policy Manager. “By jumpstarting a post with purchased engagement, the content has a greater chance of reaching a real audience—and being believed by them. Such practices not only affect consumers making purchasing decisions but can also be used to spread other types of misinformation.” 

The FTC initiated this regulatory process following NCL’s request for greater federal enforcement against organized user review fraud, which can be found here 

NCL’s full comments to the FTC can be found here. 

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit https://nclnet.org.

The boom in e-commerce has been a boon for fraudsters

The COVID-19 pandemic has greatly accelerated the growth of e-commerce…

NCL statement on congressional demand that the Biden Administration investigate competition and consumer protection abuses in the live event industry

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org(412) 945-3242 or Taun Sterling, tauns@nclnet.org(202) 207-2832

Washington, DC—The National Consumers League (NCL) today applauded action by leaders of the House Commerce and Judiciary Committees calling on the Biden Administration to more actively enforce antitrust laws in the live events ticket marketplace. In a letter to Attorney General Merrick Garland and Acting Federal Trade Commission Chairwoman Rebecca Slaughter, Representatives Bill Pascrell, Jr. (D-NJ-09), Frank Pallone Jr. (D-NJ-06), Jerrold Nadler (D-NY-10), Jan Schakowsky (D-IL-09) and David Cicilline(D-RI-01) signed a letter urging the Administration to more aggressively police antitrust violations in the live event industry and, specifically, to revisit the Department of Justice’s 2010 consent order which allowed the Live Nation-Ticketmaster merger to move forward, and launch an investigation of Live Nation Entertainment’s potentially unfair, deceptive, and anticompetitive conduct. The following statement is attributable to John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud:

“As we emerge from the COVID-19 pandemic and live events begin again, we must use this moment to address longstanding competition and consumer protection issues in the live event industry. The Live Nation Entertainment conglomerate controls 80 percent of primary ticket sales while holding significant market share in other areas of the live event industry, including venue ownership, event promotion, artist management, and secondary ticket sales. We urge the Biden Administration to heed Congress’ demand for stronger antitrust scrutiny of the live event industry and Live Nation Entertainment, in particular. Reining in the abuses of a rigged ticketing marketplace is a critically necessary step to restore fairness for live event fans.”

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

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Annual Fraud.org report shows link between COVID-19, recession, and scammers preying on Americans

Watchdog group’s annual report tracking trends out today 

For immediate release: February 1, 2021

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—An analysis of the scams most frequently reported by consumers in 2020 tells the story of economic downturn, social isolation, pandemic fears, and opportunistic criminals, according to a new report released today by the National Consumers League’s (NCL) Fraud.org campaign. Through the Fraud.org website, NCL collects complaints from consumers about suspected and confirmed fraud incidents, tracks trends, and shares the data with law enforcement. 

The report’s findings note the pandemic’s impact on fraud trends, including increases in “get rich quick” schemes and predatory scams of the heart. The number of complaints received at Fraud.org regarding bogus prizes, sweepstakes, and free gifts nearly doubled year-over-year. Another pandemic scam trend: a notable increase (30 percent) in romance scams, which experts at Fraud.org are linking to the social isolation brought on by the COVID pandemic and Americans turning to online communication for companionship. 

“The COVID recession has fueled a rise in get-rich-quick schemes and romance scams,” said John Breyault, NCL Vice President of Public Policy, Telecommunications, and Fraud and the new report’s author. “The pandemic created a perfect storm for criminals: millions out of work and struggling with new financial hardship; people forced to isolate and seek companionship online; and incredible uncertainty about the future. Last year was a good year to be a con artist.” 

With many of the conditions from 2020 still in place, the consumer watchdog is cautioning consumers against the most common scams that plagued Americans last year.  

“While the exact pitch differs from scam to scam, there are red flags that consumers should consider,” said Breyault. “A request to send money to someone you’ve never met in person is almost always a scam. Another tried-and-true tactice scammers use is to create a false sense of urgency to get victims to send money before they stop and think. The best advice we can give to consumers is to stop, think, and talk to a friend or loved one before you send money.” 

In 2020, consumers submitted more than 5,700 complaints to Fraud.org. Forty-three percent of complaints reported a monetary loss, with the median loss of $1,628.  

Top Ten Scams of 2020 

  1. Internet: Gen Merchandise 
  2. Phishing/Spoofing 
  3. Fake Check Scams 
  4. Friendship & Sweetheart Swindles 
  5. Prizes/Sweepstakes/Free Gifts 
  6. Advance Fee Loans, Credit Arrangers 
  7. Computers: Equipment/Software 
  8. Internet: Auctions 
  9. Investments: Other (note in comments) 
  10. Internet: Extortion 

Other topline findings from the report include:  

New fraud entered top ten: extortion scams. 

 “As the pandemic and the recession continue to grind on in 2021, we are paying special attention to so-called ‘Internet extortion’ scams, which entered the top ten scams for the first time last year,” said Breyault. Such scams fall in to two broad sub-categories. The first category are “sextortion” scams, where consumers receive a message where the scammer threatens to release embarrassing photos, videos, or other personal information to the victims’ friends and family. The second sub-category involves “psychic” services, where the scammer claims to had discovered that a “curse” or other tragic event is about to befall the victim. Only by paying a significant fee can the victim have the “curse” lifted.  

Younger consumers and seniors are being targeted more frequently.  

The percentage of complaints received from consumers aged 26-65 decreased by an average of 8.76% in 2020.  By comparison, complaints from consumers aged 25 and below and those 65 and older increased by an average of 30.60% and 15.82%, respectively versus 2019. For consumers aged 25 and under, the top three most reported fraud categories were Internet merchandise scams, fake check scams, and romance scams. For those 65 and older, the top complaint categories were prize/sweepstakes scams, phishing/spoofing, and Internet merchandise scams.  

The Web and the telephone remain scammers’ preferred contact methods. 

With email spam filters growing increasingly successful at blocking out scam emails, fraudsters continued to turn to the Web and the telephone to find victims. Those two contact methods were mentioned in more than 81% of the complaints. “This highlights the need for consumers to be wary when responding to messages from unknown senders, particularly those encountered on social media,” said Breyault. “Consumers should also continue to be on guard for unknown callers seeking to offer them prizes or other inducements to send money.”  

Read the full 2020 Top Scams report from NCL.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneering consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

Protecting Nevadans from COVID-19 Scams: A Virtual Panel Event with NV Attorney General Aaron D. Ford and Fraud Experts

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC – This Thursday, October 22, the National Consumers League (NCL), America’s pioneering consumer and worker advocacy organization, will host a virtual fireside chat with Nevada Attorney General Aaron D. Ford and a panel of consumer protection experts on the growing threat of scams linked to the COVID-19 pandemic. The consumer watchdog organization aims to raise awareness in Nevada about the risk of COVID-19 related fraud and arm consumers with information they can use to spot and avoid these scams.

Since the pandemic began, NCL, which operates the website Fraud.org, has seen an uptick in complaints about a variety of scams preying on increasingly vulnerable, financially strapped, and fearful consumers. Scammers running phishing schemes, stimulus check fraud, unemployment benefits scams, and immigration scams have all been working overtime to use the COVID-19 pandemic as a way to defraud consumers. The experts at NCL have watched these scams emerge, forecast they will continue to increase, and are eager to work with AG Ford to get the word out about how Nevadans can protect themselves.

WHAT

Virtual “fireside chat” featuring Nevada AG Aaron D. Ford and NCL, followed by a panel discussion on resources and tips to avoid COVID-19 fraud and scams.

WHEN

Thursday, October 22, 2020
2:00 PM – 3:00 PM Pacific Daylight Time

WHO

Nevada Attorney General Aaron D. Ford
John Breyault, Vice President, National Consumers League

State Senator Dallas Harris, Consumer Rights Attorney, Legal Aid Center of Southern Nevada
Maria Moore, State Director, AARP Nevada
Assemblyman Edgar Flores, Immigration, Family, and Personal Injury, Gonzalez & Flores Law

HOW TO WATCH

YouTube Live link will be provided following registration via Eventbrite.

*** Members of the media are welcome to attend but must RSVP to Carol McKay, National Consumers League, carolm@nclnet.org. If you are unable to attend, a recording of the interview and panel can be provided upon request after the event concludes ***

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.