The Federal Trade Commission just released their second report on Consumer Fraud in the United States. Since it is full of interesting information, I’m going to do several posts on the Commission’s findings.
First a quick notes about methods: this report presents findings from 3,888 telephonic interviews of Spanish and English speaking adults. The Commission oversampled to ensure that several minority groups were strongly represented, because it is believed that inadequate attention is being paid in particular to scams against Latinos with limited English skills.
Despite the limitations of telephonic surveys, I think that these studies are essential, because several biases operate to make individuals not take consumer protection issues seriously. There is optimism bias, but there is also a general dismissiveness of these problems. I frequently hear individuals deny that there is a problem with a certain practice, because it doesn’t affect them. When one considers consumer protection seriously, one has to consider how framing, limited attention, differences in education, limited language skills, age, and gullibility may make all of us likely to fall victim to a scam at one time or another.
So, I doubt many people who read Scienceblogs buy scam weight loss products. You know something about science, so claims that you can lose weight by eating everything in sight are probably suspect, but you also are probably more skeptical of claims of product efficacy. Now, would you be surprised to learn that 4.8 million Americans reported falling victim to 8.3 million incidents of weight-loss product frauds?
Now, what’s shocking is that because people generally don’t like to admit that they have been swindled, and because the Commission’s definition of weight loss fraud is so narrow (“only those who indicated either that they lost only a little of the weight they had expected to lose or that they did not lose any weight were counted as victims of weight-loss fraud”), the numbers of victims and incidents are probably much higher.
There are many different approaches to dealing with consumer fraud. One can bring lawsuits, the government can prosecute scammers, industries can initiate self-regulatory programs, and there’s always consumer education. These approaches all have strengths and weaknesses. But I wonder whether general science education could help–whether teaching individuals to be more skeptical of claims and evidence–could curb fraud. Unfortunately, we don’t yet have the data to tell. But in the next few posts, I am going to talk about some of the trends we can see in fraud, and what these mean for consumers.