Deceptive Mail

Information GAO collected from several sources suggests that consumers are having major problems with deceptive mail, which includes sweepstakes, chain letters, cashier's check look-alikes, work-at-home schemes, and fraudulent charity solicitations. About one in two adults believe that in the last six months they have received deceptive mailed sweepstakes material or cashier's check look-alikes, according to GAO estimates. The Federal Trade Commission (FTC), Postal Inspection Service, and the state attorneys general offices estimate that in fiscal year 1998 about 10,400 deceptive mail complaints led to about 100 law enforcement actions. Between October 1997 and March 1999, FTC received more than 18,000 deceptive mail complaints, of which about 2,700 involved consumer payments that totaled nearly $5 million. The Postal Service received more than 16,700 complaints, of which 3,000 involved consumer fraud losses that totaled more than $5 million. The Inspection Service also had more than 1,800 open investigations on deception mail in 1998. Various federal agencies and other groups have undertaken efforts to address consumers' deceptive mail problems and educate them about these risks. For example, FTC established a national toll-free hotline for receiving deceptive mail and other complaints.

GAO noted that: (1) examples of deceptive mail include sweepstakes, chain letters, cashier's check look-alikes, work-at-home schemes, and fraudulent charity solicitations; (2) officials in various agencies and organizations said that comprehensive data on the full extent of consumers' deceptive mail problems were not available mainly because consumers often did not report their problems and no centralized database existed from which such data could be obtained; (3) however, data GAO collected from various sources suggested that consumers were having substantial problems with deceptive mail; (4) based on a GAO sponsored November 1998 statistically generalizable sample of the U.S. adult population, GAO estimates that about half of the adult population believed that within the preceding 6 months, they had received deceptive mailed sweepstakes material or cashier's check look-alikes; (5) officials from the Federal Trade Commission (FTC), Postal Inspection Service, and state Attorneys General offices estimated that in fiscal year (FY) 1998, about 10,400 deceptive mail complaints led to or initiated about 100 law enforcement actions; (6) for the period October 1, 1997, through March 31, 1999, FTC received over 18,000 deceptive mail complaints, of which about 2,700 reported consumer payments of about $4.9 million; (7) also, the Postal Inspection Service received over 16,700 complaints on fraud and chain letters, of which about 3,000 reported consumer fraud losses of about $5.2 million; (8) the Inspection Service also had over 1,800 open investigative cases on deceptive mail during FY 1998; (9) various federal agencies and other organizations have undertaken efforts to address consumers' deceptive mail problems and educate them about such problems; (10) for example, FTC established a national toll-free hotline for receiving deceptive mail and other complaints; (11) one joint effort was Project Mailbox, which involved such organizations as FTC, Postal Inspection Service, and various state Attorneys General; and (12) these organizations initiated over 200 law enforcement actions against companies and individuals that used the mail to allegedly defraud consumers.