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How the FTC Conducts Investigations of Online Scams
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How the FTC Conducts Investigations of Online Scams
The Federal Trade Commission, or FTC, is the main federal agency that investigates complaints and conducts law enforcement actions against online scams and fraud. With the rise of the internet and e-commerce, online scams have become increasingly common and cost consumers billions of dollars each year.
The FTC relies on reports from consumers to detect and stop online scams. When you report a scam to the FTC at ReportFraud.ftc.gov, it helps the agency investigate the scam and build cases against scammers. The FTC entered over 2.4 million fraud reports into its Consumer Sentinel database in 2022 alone.
Types of Online Scams the FTC Investigates
Some of the most common online scams the FTC investigates include:
- Imposter scams – Where scammers pretend to be someone you trust to trick you into sending them money or sharing personal information.
- Online shopping scams – Where you pay for something you found online but never receive the product.
- Prize and sweepstakes scams – Where scammers say you won a contest but must pay fees before you can claim the prize.
- Investment scams – Where scammers promise unrealistic returns on investments to trick you into sending them money.
- Business and job opportunity scams – Where scammers charge you upfront fees for a business or job opportunity that ends up being fake.
Other types of online scams the FTC investigates include phishing scams, romance scams, tech support scams, and more. Scams frequently target older adults but can affect consumers of all ages.
How the FTC Investigates Online Scams
The FTC uses consumer complaints to the Consumer Sentinel database to identify trends and track the biggest scams affecting consumers. FTC investigators analyze the complaint data to spot spikes in reports about specific scams or companies. They look for commonalities in the reports that point to larger scam operations.
When the FTC identifies a pattern of fraud, they open an investigation. FTC investigators have a wide range of tools at their disposal to investigate scams and identify the perpetrators, including:
- Issuing subpoenas to scammers and third parties, like banks, to obtain evidence
- Tracing money flows between bank accounts controlled by scammers
- Posing as consumers to gather evidence by interacting with scammers
- Collaborating with law enforcement agencies who can conduct surveillance
- Working with tech companies who can share data on scam transactions and accounts
The FTC also monitors internet traffic and social media to detect new scams as they emerge. The agency has staff dedicated to finding scam operations by proactively surfing the web.
FTC Actions Against Scammers
When an FTC investigation uncovers an online scam operation, the agency can take law enforcement action to stop the scammers and prevent future harm to consumers. The FTC has several tools to take action:
- Federal court injunctions – The FTC can file a lawsuit in federal court seeking an injunction to halt illegal practices by scammers. Injunctions can stop scams immediately while litigation proceeds.
- Administrative orders – The FTC can issue administrative orders that require scammers to cease illegal activity. Failure to comply can result in civil penalties.
- Criminal referrals – The FTC can refer scammers to criminal law enforcement agencies for potential prosecution.
- Asset freezes – The FTC can freeze the assets of scammers to preserve funds for potential refunds to scam victims.
The FTC also works to educate consumers about new and emerging online scams through consumer alerts and media campaigns. This education helps prevent consumers from falling victim to scams that can result in major financial losses.
Reporting Online Scams to the FTC
The FTC relies heavily on direct reports from consumers to detect and stop online scams. If you encounter a scam, be sure to report it at ReportFraud.ftc.gov or by calling 1-877-FTC-HELP.
Provide as many details as possible in your report, including:
- How you were contacted by the scammer
- What the scammer asked you to do
- Any phone numbers, website addresses, or usernames used by the scammer
- Any money you lost to the scam
Your report provides valuable intelligence that can help the FTC and law enforcement investigate and prosecute scammers. By reporting scams, you can help protect other consumers from falling victim to fraudulent schemes.
With billions of dollars lost to online scams each year, the FTC takes its mandate to protect consumers seriously. Reporting scams you encounter helps strengthen the FTC’s law enforcement efforts against online fraud.