Volume 5, Issue 1    |    Back to Publications

1-In-10 Americans Become Victims of Fraud

According to The Federal Trade Commission, nearly 25 million adults-11.2 percent of the adult population-were victims of fraud last year. Certain racial and ethnic minorities were much more likely to be victims of fraud then non-Hispanic whites. According to the survey, American Indians and Alaska Natives were the ethnic group most likely to be victims: nearly 34 percent had experienced one or more frauds in the preceding year. Seventeen percent of African Americans were victims; over 14 percent of Hispanics were victims; and over 6 percent of Non-Hispanic whites were victims. The survey of 2,500 randomly chosen consumers shows that consumers with high levels of debt were more likely to be victims of fraud. Three of the top four categories of fraud related to credit, including credit-repair scams often targeted at those carrying high debt loads or having bad credit.

The most frequently reported type of consumer fraud was advance-fee loan scams, in which consumers pay a fee for a "guaranteed" loan or credit card. Four and a half million consumers-2.1 percent of the U.S. adult population-paid advance fees but did not receive the promised loan or card. In fact, some consumers reported that more than once during the last year they paid fees to get loans or credit cards they did not get.

Buyers' club memberships or bills for unordered publications was the second most commonly reported fraud category in the survey. Some four million consumers - 1.9 percent of the U.S. adult population - were unwittingly billed for memberships they did not authorize or publications they did not order.

Credit card insurance scams and credit repair were the third and fourth most common frauds identified in the survey. While federal law limits consumers' credit card fraud liability to $50, fraudsters sell credit card insurance by falsely claiming that card holders face significant financial risk if their credit cards are misused. An estimated 3.3 million consumers bought unnecessary insurance against the unauthorized use of their credit cards.

Women and younger consumers are more likely to complain if they have been victims of fraud, the survey found. An estimated 74.5 percent of female victims complained. For males, the complaint rate was 10 percentage points lower. Similarly, almost 75 percent of consumers under the age of 35 complained, compared to only 55.4 percent of consumers between 55 and 64.

According to the survey, consumers between the ages of 25 and 44 are most likely to be fraud victims. Eleven percent of them were victims, compared to 8.7 percent in the 45 to 54 year bracket, 6.1 percent of consumers aged 55 to 64, and only 4.7 of consumers 65 years and older.

Out of the Schoolyard: The Workplace Bully

Your organization most likely has policies on discrimination, sexual harassment, and, of course, violence. But what is your company's policy on workplace bullying?

For many employees, daily life is marked by repeated exposure to verbal and psychological mistreatment at the hands of a tyrannical bully. Non-lethal and non-physical subtle forms of abuse can impair the health and productivity of the bully's intended target. But workplace bullying is not only perfectly legal; it is often ignored or even condoned in many workplaces that are considered to have a "healthy" environment or culture. And subtle as the abuse may be, the numbers are not: according to the Workplace Bullying and Trauma Institute (WBTI), workplace bullying is three times more prevalent than the recognized, illegal forms of abuse, including discrimination and sexual harassment.

There are many reasons a blind eye is turned to workplace bullying. In only 25% of bullying cases does the target qualify for protection against racial discrimination or sexual harassment, leaving employers with little or no legal recourse to back disciplinary actions. Without laws to deter bullies from abusing other employees or organizations from neglecting the problem, it remains easy to ignore or simply discount as "personality clashes" between employees. Also interesting is who is doing the bullying: women comprise 58% of the aggressor pool and 80% of the victim pool, further blurring the lines between protected and unprotected status. There are times when the bully's behavior is considered desirable by management, such as keeping other employees "on their toes" or displaying an interpersonal aggressiveness that is considered more valuable than emotional intelligence. In addition, a person's opinion on what constitutes bullying is very subjective. Formulating policies and procedures outlining disciplinary methods regarding bullying may prove very arduous, due to the fact that the person determining the fate of the offender is using his/her subjective opinion to classify the behavior as bullying. Furthermore, management may protect the bully. One director of a federal organization refused to let a bully be reassigned despite having acknowledged the problems he was causing. The director stated he wanted to keep the antagonist where he was because "he was a great conversationalist and a lunch buddy."

Many organizations have a difficult time understanding what comprises workplace bullying. In its revision of Labour Standards in 2004, Quebec adequately summed it up: "Any vexatious behaviors in the form of repeated and hostile or unwanted conduct that affects and employee's psychological or physical integrity." Though not considered illegal in the US yet, legislation has been proposed in California and Oklahoma, and is expected in Washington 2005. So why bother until it's a law? Besides its prevalence in the workplace and its effect on targeted employees, it can be costly for an employer to allow bullying. Talented employees are often the targets, and they are driven away from the organization. Those who are witnesses to the bullying are also affected, driving down their production as well. And talented people you are trying to recruit? If your organization has a reputation of tolerating unacceptable aggressive behavior, it is unlikely you will attract or retain high-caliber employees. The last reason to put an end to the behavior is because it is simply the right thing to do. Your employees work hard for your company, and a workplace free from bullying is a reasonable expectation.

Source: Workplace Violence Prevention Reporter

Travel Tip: More U.S. companies are insuring key employees against kidnapping. Criminals here and abroad are increasingly targeting American business travelers and taking them for ransom. Coverage can be tailored to include death, injuries, and ransom money. A thousand dollars buys a $1,000,000 policy. HR professionals and CSOs should ask their risk managers for more information.

Need More Miles?

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Need to know how many miles from one carrier can be converted for use at another, go to WebFlyer.com.

Quote of the Month: "It is unfair to ask of others what you are unwilling to do yourself." Eleanor Roosevelt

10 Simple Ways to Protect Your Family and Your Money

Rip-offs and con-artists exist in every industry. Whether you are buying a car, repairing your home, arranging an exotic vacation, or buying on-line, someone is likely waiting to take you to the cleaners. In the spirit of the New Year, here's ten of our top consumer protection recommendations:

• Before taking your car in for repairs, inconspicuously mark key components with chalk or a sharp implement. After the repair and before paying the repairman, inspect the items you marked and see if they have been actually replaced. Better yet, ask that all of the old components be returned to you after the repair.
• Negotiate the price of your next new car before test driving it at the dealership. Dealers typically request a copy of your driver's license before allowing you to test drive their vehicles. Doing so helps them prevent drive-offs, but it allows them to do some quick research and find out what you paid for your last vehicle and what you earn. This information gives them a decided advantage during negotiations. Better yet, rent the car of your choice for a day. This will allow you to drive the vehicle at your leisure and really determine if it is right one for you.
• Change the door locks on your home. Over the years, we tend to lend our keys out housekeepers, repair people, and family members and forget to get them back. While at it replace all the batteries in your home's smoke alarms and battery operated clocks.
• Steer clear of drive-by repairmen. Notorious for shoddy work and rip-offs, these scoundrels can be defeated by requesting a copy of their contractor's license and insurance documents. Better yet, check the license plates of their vehicle. If it's from out-of-state, or county miles away, chances are you're likely to be taken.
• Watch out for bogus chimney repairs and water proofing scams. These cons are most typical in those parts of the country where wood burning fireplaces and basements are common home features. After a quick, and often free inspection, these operators immediately recommend major repairs are necessary in order to make your home safe. Avoid these self-serving scoundrels and hire home inspectors that don't do repairs.
• Shred all documents containing personal information before tossing them in the trash. Use only a shredder that cross cuts. A straight cutter cuts the documents in ribbons, making them susceptible to easy reconstruction.
• Consider CCTV for your home. The cost of closed-circuit cameras and recorders are so low most people can afford to install them in their home. Configure the system to only record when you are out of the home or the alarm is on.
• Put only your name on your luggage tags. Burglars are known to frequent airports to identify travelers leaving their home unoccupied. Most frequently targeted are young families traveling with children. Why-because their homes are most likely to be unoccupied while gone. Put your name and address inside your luggage.
• Next time you go to the hospital BYOD (bring your own drugs). Hospitals charge for every item and pill these dispense. Aspirin may be as much as $5 per tablet. If possible, bring your own medications and bypass the hospital pharmacy.
• Buy a cheap pen. Check thieves steal checks and wash them with acetone to remove everything but your signature. They then re-write them to the person they wish and change the dollar amount. The best defense is to use a cheap uni-ball gel pen (sometimes called gel roller-ball) for all check writing. The ink in these pens cannot be removed with acetone.

The Facts on FACTA

After seven years of tireless lobbying, a coalition of security groups lead by The National Council of Investigation and Security Services convinced law makers to amend the Fair Credit Reporting Act and eliminate the requirement that employers obtain employee's permission before investigating suspected misconduct. In March 2004, the President signed into law the Fair and Accurate Credit Transactions Act (FACTA). Among other things, FACTA amends Section 603 of the FCRA and eliminates the requirement that employers notify employees of their intention to conduct an internal investigation and obtain permission from those they intend to target. However, employers are reminded that these changes do not alter the requirements that receive permission from job applicants when ordering consumer reports or investigative consumer reports from consumer reporting agencies. CRAs must still obtain a certification of compliance from the requesting employer prior to receiving the request for a report. Please contact us if you would like more information about the FACTA or the FCRA.

The FTC's new rules regarding consumer rights becomes effective January 31, 2005. For more information about consumer rights and notices visit the FTC Web site. Go to http://www.ftc.gov/bcp/conline/pubs/credit/fcrasummary.pdf to view a down-loadable PDF version of the Consumer's Summary of Rights.

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