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Identity theft in Wisconsin: Signficant or declining?

Identity theft is the #1 consumer complaint in Wisconsin according to the Federal Trade Commission.
Identity theft is the #1 consumer complaint in Wisconsin according to the Federal Trade Commission.
Modified by J. Campana and Associates llc and based on artwork of Ellen Meany/Copyright 2009 Isthmus Publishing Co., Inc with permission.

This is National Consumer Protection Week. It’s a week for consumers to recognize and report scams, identity theft and unfair business practices. This article will discuss identity theft trends in Wisconsin after we discuss the “nitty-gritty” of the apparent discrepancy between the recently released 2013 FTC consumer complaint compilation and the Wisconsin Consumer Protection 2013 top-ten consumer complaints where identity theft is ranked #1 nationally and #4 in Wisconsin, respectively.

Last year we reported that identity theft increased 32% nationally and 46% in Wisconsin comparing 2012 FTC consumer complaints to those in 2011. Although identity theft is still the #1 fraud complaint nationally, now 14 years running, this year’s FTC compilation indicates that the number of identity theft complaints filed with the FTC decreased nationally and from almost every state including Wisconsin. Although, the FTC report suggest that identity theft is the #1 complaint based on Wisconsin complaints received by the FTC.

FTC vs. Wisconsin Consumer Protection Consumer Complaints

In a companion article we made a case that the apparent decrease in identity theft complaints nationwide is an artifact of increasing tax-related identity theft complaints and the likelihood that those heightened number of tax-related identity theft complaints are currently being handled directly by the Internal Revenue Service instead of the FTC as in 2012 and prior years.

This explanation would also apply to the apparent decrease in identity theft complaints filed with the FTC and the State of Wisconsin. The Wisconsin Consumer Protection report says, “. . . more than half of the total [identity theft] complaints involved tax-related identity theft,” indicating that this type of identity theft tops the list as it did during calendar year 2012. With the IRS handing and resolving tax-related identity theft complaints, the consumer has little need or interest in reporting their case for the purpose of statistical gathering to either the FTC or Wisconsin Consumer Protection. The interest of the consumer is resolving their identity theft situation and moving on with life.

In a separate article we discussed recent national identity theft trends observed in our comparison of the 2012 and 2013 fraud complaints compiled by the FTC.

A significant difference is that the FTC report is a compilation of consumer complaints excluding Federal Do-not-Call (DNC) list complaints, whereas the Wisconsin list includes all consumer complaints including telemarketing and state DNC list complaints.

A separate and different FTC Federal DNC complaint report states 3,748,655 Federal DNC complaints were received in 2013 of which 30,949 were from Wisconsin residents.

In contrast, the total FTC consumer complaints in 2013 were 2,101,780 of which 1,165,090 (55.4%) were fraud related and 290,056 (13.8%) were identity theft complaints. (FTC total consumer complaints including Federal DNC were therefore 3,748,655 + 2,101,780 = 5,850,435).

Wisconsin Consumer Protection received a total of 10,454 consumer complaints during calendar year 2013 including 2,014 telemarking/DNC complaints. Identity theft complaints were 398 or 3.8% of the total (or 4.7% if we exclude the 2,014 telemarketing/DNC complaints). Regardless the percentage is small compared to the FTC identity theft complaints of 13.8%.

The FTC report also provides a breakdown of complaints received from each state. The FTC received more than 2.5 times the number of complaints than those Wisconsin Consumer Protection received from Wisconsin residents. The FTC received 25,504 consumer complaints from Wisconsin residents (excluding Federal DNC complaints). Identity theft complaints from Wisconsin were 3,635 or 14.3% of the total. The Wisconsin percentage is larger than the national average of 13.8%. (Additionally, according to the FTC report, in 2013 Wisconsin ranked 27th among all states for ID theft complaints up from 32nd in 2012.)

The FTC receives more consumer complaints from Wisconsin residents than Wisconsin Consumer Protection, and the complaints are likely separate and different complaints received by each organization. In a companion article, we discussed the lack of coordination between federal, state, law enforcement agencies and financial institutions in reporting fraud and identity theft complaints to FTC.

An advantage of a centralized clearinghouse of identity theft complaints, such as the FTC, is that the clearinghouse can potentially identify a trends (geographical, fraud-type, age group, etc.) to assist law enforcement in identifying and convicting outlaws. For example, complaints filed by consumers might suggest a trend is evolving in South Central Wisconsin and Northern Illinois that assists law enforcement in identifying and convicting the criminals with the help of those consumers that filed complaints.

The only organization within Wisconsin that reports consumer complaints to the FTC is the Better Business Bureau (Milwaukee). Unlike some states, there is no apparent coordination between Wisconsin’s Attorney General, local law enforcement or Wisconsin Consumer Protection that is noted in the FTC Report.

Based on the FTC’s Wisconsin data with significantly larger number of consumer complaints submitted by Wisconsin residents (over 25,000 compared to about 10,500 compiled by Wisconsin Consumer Protection), we conclude that identity theft is also #1 consumer complaint in Wisconsin composing 14.3% of the total.

Telemarking and DNC violations that apparently dominated the Wisconsin Consumer Protection top 10 list, are not necessarily fraudulent. Those that are fraudulent are means by which other types of fraud are committed such as identity theft, unfair debt collection, Lotteries/sweepstakes fraud, imposter scams, etc.

For example, in a companion article, Identity theft: Recent trends, we reported that since 2011, the main method of initial contact between crook and victim evolved from email (42% in 2011) to telephone contact (40% in 2013). In 2013 email contact dropped to 33% followed by Internet (15%) and snail mail (5%).

What is trending in Wisconsin?

The number of reports filed from Wisconsin are relatively small, which make it tentative to report on increasing and decreasing trends in certain types of identity theft.

As with the national FTC data and many of the top states for identity theft where much larger complaints are reported, Wisconsin saw a substantial decrease in the number of complaints in the Government Documents and Benefits category. This category includes the subcategory of tax-related identity theft. As discussed previously, the significant decrease in this category (18% in Wisconsin) is most likely an artifact of the IRS identifying and resolving tax-related identity theft directly with consumers.

Credit card fraud including new account fraud and existing account fraud decreased in Wisconsin by 19% and phone and utilities fraud increased 10.8%.

Read what is trending nationally based on a statistically significant sample of complaint data in the companion reports, Identity theft: Top consumer complaint and decreasing? and Identity theft: Recent trends.

Wisconsin Hot Spots

The FTC provides fraud and identity theft complaint statistics in based on a variety of factors including geographical regions. There are 13 metropolitan reporting areas within the borders of the state (and a few that overlap state boundaries). The top five and their national rank (based on identity theft reports per 100,000 population) are:

Metro Statistical Area and National Rank

  1. Oshkosh-Neenah 36
  2. Milwaukee-Waukesha-West Allis 61
  3. Racine 140
  4. Wausau 173
  5. Madison 183

The lowest ranked Metro Area, Appleton is ranked 362, and coincidentally adjacent to the highest ranked area in Wisconsin, Oshkosh-Neenah.

In conclusion, identity theft ranks #1 in consumer complaints in Wisconsin according to the recent FTC report. Wisconsin state government could improve on public service announcements, outreach, and coordination among various agencies and with the FTC to improve reporting and state statistics on identity theft, which could prove beneficial to the public by allowing more comprehensive crime data on which law enforcement can use to identify, convict and prevent identity theft.

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