Are you missing $2,412? Yes, says the Federal Trade Commission, if you were the victim of a consumer scam last year. That's the amount American consumers reported losing — on average — to scams and consumer fraud — in 2005. That works out to $682 million, a big jump from the $568 million ($1,846 per consumer) lost to frauds and scams in 2004. (Note: That number doesn't include identity theft, which accounted for 37 percent of the 686,683 consumer complaints filed with the FTC last year, explains the FTC's Jay Miller, program manager of Consumer Sentinel, the complaint database developed and maintained by the FTC.)This year's scam artists are hot on wire transfers — no surprise since, Miller notes, it's much more difficult for law enforcement agencies to trace money moved this way. The percentage of Internet-related fraud complaints with wire transfer as the reported method of payment more than tripled from 2003 to 2005, according to the FTC report. "Any request from someone you don't know to wire money should set off alarm bells," said Susan Grant, director of the National Consumer League's National Fraud Information Center/Internet Fraud Watch program. "If that's part of the deal, it's a scam." Scammers are also growing ruthless, according to Doug Shadel, co-author of the AARP publication "Weapons of Fraud: A Source Book for Fraud Fighters." "They are getting more and more harsh. They will just say, 'Look lady, are you stupid?' " Shadel's research also shows that scammers are customizing their pitches to you. They will ask you personal questions about your life to find out what psychological tactics will work on you. Your best bet is not to engage in conversations where personal details of your life are communicated to a stranger over the phone. Don't feel rude about cutting off a conversation. Just say no, and then hang up.
Here is a look at the biggest scams of the year, how we fall for them, how they work, and how to protect yourself:
Identity TheftDespite constant media about how to protect yourself, this topped the complaint category. One reason is that many consumers do not know where the real threat comes from — your real risk is offline, not online. So, get a locked mailbox. Shred all paper containing personal information using a crosscutting shredder, not a regular linear shredder because people will actually put the pieces back together, says Shadel.
Never reply to e-mails asking for personal information or provide information if contacted by phone. Instead, go directly to the company's Web site or hang up and call back the company. Never enter personal information into a pop-up screen. Legitimate companies don't ask for your information via pop-up screens. Periodically monitor your credit report so you know if someone is trying to take out credit in your name. Order a free copy every four months at annualcreditreport.com. Finally, cherish your Social Security number. Don't carry it in your wallet, and give it out as seldom as possible.
Internet AuctionsSince becoming popular on the Web, auctions have topped complaint lists. The disputes generally involve late shipments, no shipments or delivery of lower-quality products than advertised. They also report bogus online payment or escrow services, and fraudulent dealers who lure you from legitimate sites with deceitful deals. How do you steer clear? Since you never actually meet the seller, become familiar with the auction site. Find out if it provides free insurance or guarantees for undelivered items. Check sellers' feedback ratings. Finally, use credit cards, which offer protection if the item is not delivered or is not what you ordered.
Foreign Money OffersYou'll get an e-mail or snail mail saying that "government officials" are trying to transfer millions of dollars out of a foreign country and, if you help them, you will get a share of the money. A recent twist on this scam involves pitches relating to the aftermath of Hurricane Katrina. The bottom line — do not send money. The scammers simply pocket your money. Instead, forward the e-mail to email@example.com so it can be entered into the unsolicited commercial e-mail database. Then report the scheme to the FTC at ftc.gov or call 1-877-FTC-HELP. You do not have to be a victim of fraud to file a complaint.
Shop-at-Home/Catalog SalesThe Internet and catalogs make shopping much more convenient but also bring an array of problems you don't face when shopping at a store. Never buy items from unsolicited e-mails or from unknown companies. Before you buy anything, get all the details, including the seller's name and physical address, the cost of the product or service, what the price includes, whether there are shipping charges, the delivery time, and the seller's privacy, cancellation and return policies. Again, use credit cards because you can dispute the charges if you don't get what you were promised.
Prizes/Sweepstakes and LotteriesYou receive a phone call, e-mail or letter saying you won a free prize, but to claim it you must pay a fee. Lately, the same sorts of phone calls are coming from "government agencies," even, says Jay Miller, "the FTC." Legitimate sweepstakes do not require you to pay insurance, taxes, or shipping and handling charges to collect a prize. Never agree to wire money or send it by overnight delivery. Before making a transaction, research the company with the Better Business Bureau (bbb.org). Disreputable companies may use a variation of a well-known name, so do not be fooled by look-alikes.
Jean Chatzky is an editor-at-large at Money Magazine and serves as AOL's official Money Coach. She is the personal finance editor for NBC's "Today Show" and is also a columnist for Life Magazine. She is the author of four books, including 2004's "Pay it Down! From Debt to Wealth on $10 a Day" (Portfolio). To find out more, visit her Web site, .