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Tax, wage ID theft tops FTC's list of most complaints

The Federal Trade Commission received a record number of complaints last year – more than 2 million – and for the 13th year in a row, identity theft tops the list.

According to the 2012 annual report released on Tuesday, 18 percent of all consumer complaints were related to identity theft.

The new numbers show a huge rise in the percentage of identity theft fraud cases related to taxes and wages. The IRS recently acknowledged the serious nature of this problem and how it’s trying to fight back.

ConsumerMan: IRS identity theft crackdown nets 109 arrests

The FTC says there are three basic types of ID theft related to taxes and wages:

  • The most common is when the scammer – using your Social Security number – applies for an income tax refund in your name. If the crook gets your refund before you file your return, it can hold up the process for months.
  • ID thieves sometimes misuse Social Security numbers to create bogus dependents to boost their fraudulent refund. Again, this delays legitimate refunds.
  • They also use stolen SSNs to get a job. Victims don’t find out about this until they get a notice from the IRS that says they’re under-reporting their income.

“The FTC report, when combined with the recently released Javelin Research survey – that reported the number of identity theft victims reached over 12.6 million in 2012 – is yet another confirmation of the inevitability of victimization,” said Adam Levin, chairman of Identity Theft 911.

“Human error, misplaced trust, individual over-sharing of information and countless data breaches impacting all segments of the business community and all levels of government have contributed to the depressing reality that it is literally impossible to prevent identity theft.”

Here is the complete list of the FTC’s Top 10 Complaint Categories for 2012:

  1. Identity theft: 369,132 complaints ( 18 percent)
  2. Debt collection: 199,721 complaints (10 percent)
  3. Banks and lenders: 132,340 complaints (6 percent)
  4. Shop-at-home and catalog sales: 115,184 complaints (6 percent)
  5. Prizes, sweepstakes and lotteries: 98,479 complaints (5 percent)
  6. Impostor scams: 82,896 complaints (4 percent)
  7. Internet services: 81,438 complaints (4 percent)
  8. Auto-related complaints: 78,062 complaints (4 percent)
  9. Telephone and mobile services: 76,783 complaints (4 percent)
  10. Credit cards: 51,550 complaints (3 percent)

“This report illustrates that we still have a huge problem with fraud in this country,” said John Breyault, director of, run by the National Consumers League. “It’s more important than ever that people educate themselves and learn how to spot the warning signs of fraud.”

It’s also important to report suspected scams and let the authorities know if you’ve been victimized. They may not be able to help you specifically, but you might help them catch the bad guys.

“Law enforcement agencies nationwide will use this information to help stop those who try to scam U.S. consumers,” said Charles Harwood, acting director of the FTC’s Bureau of Consumer Protection.

You can file a complaint with the FTC online.

More Information:

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitteror visit The ConsumerMan website.