The FTC's activity this week centers around data analysis. The agency released reports analyzing Bitcoin ATM scam data, followed by a report compiling issues with income disclosure statements from multi-level marketing ("MLM") businesses. The Commission also sent a report to the Consumer Financial Protection Bureau on its activity related to fighting debt collection-related fraud against consumers. More information on these stories after the jump.
Tuesday, September 3, 2024
Bureau of Consumer Protection: Consumer Credit and Finance
- The FTC has released a Consumer Protection Data Spotlight report about increasing fraud losses at Bitcoin ATMs (also known as "BTMs"). The report explains that BTM scams have surged nearly tenfold from 2022 to 2023, and consumers lost over $65 million to BTM scams in the first half of 2024 alone. In this period, the median individual loss for cryptocurrency-based scams was $5,400, as compared to a $447 reported median loss for fraud generally. The scams frequently start with a call, message, or fake security warning on a computer about unauthorized charges on an account, sometimes from a scammer impersonating a business, tech support, or even the FTC itself. Scammers then claim that depositing cash into a BTM using a QR code provided by the scammer will correct the problem, going so far as to call the BTMs "safety lockers." The scams are generally reported by adults over age 60, but the FTC encourages all consumers to read its advice on avoiding and reporting scams.
Wednesday, September 4, 2024
Bureau of Consumer Protection: Multi-Level Marketers (MLMs)
- The Commission released a 95-page Staff Report entitled Multi-Level Marketing Income Disclosure Statements. FTC staff reviewed 70 income disclosure statements from a variety of MLMs; these statements are designed to inform consumers who are thinking about joining an MLM about income a consumer might expect to receive. The report revealed a number of issues with the statements, including (1) presenting income data that excluded participants who made little-to-no income, (2) failing to account for expenses incurred by participants, (3) emphasizing large incomes made by a small minority of participants, (4) omitting or obscuring information about the limited income that most participants receive, and (5) presenting income in a potentially confusing or ambiguous ways. For statements containing enough data for FTC staff to calculate accurate income information, the vast majority of MLM participants received $1,000 or less per year, or $84 per month on average.
Thursday, September 6, 2024
Bureau of Consumer Protection: Debt Collection
- The FTC issued an annual summary to the Consumer Financial Protection Bureau (CFPB) of 2023 activities to protect consumers in the debt collection arena. Many of these activities have been reported on this blog, including settlements and trials against debt collection operations, blocking student debt collection based on illegal financing, combatting unlawful practices related to car debt, and targeting dark patterns designed to lock consumers into unwanted subscriptions.
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