Isle fraud fifth
worst in nation

More than 1,800 complaints were
filed in 2004, but the real number
of victims could be higher

Hawaii ranked fifth in the nation in fraud complaints per capita last year, according to a study by the Federal Trade Commission.

However, state consumer affairs officials warned the actual number of victims and amount of cash lost is likely much higher.

In 2004, Hawaii had 1,807 fraud-related complaints made, or one complaint for every 143 people, according to the FTC report. Those complaints cost consumers an estimated $2.7 million and included Internet auctions, sweepstakes and lotteries, and foreign money offers.

The Better Business Bureau of Hawaii said those numbers only reflect a small percentage of those filing complaints that knew or were willing to admit how much money they lost.

"I'd say of the formal complaints about 3 percent told us how much money was involved," said Ann Deschene, president of the Hawaii's BBB. "I don't know what the actual number is. I shudder to think."

Honolulu police officials estimate they handle several hundred fraud-related cases a month. Capt. Ed Nishi of the property crimes detail said while property crimes like auto thefts, burglary and other conventional thefts are decreasing, fraud is the "fastest growing crime in Hawaii."

"We've got everything from forged checks to fake credit cards and fake gift certificates, not to mention all the flimflam artists out there swindling people out of their money," Nishi said.

The FTC report is based upon information gathered by the Consumer Sentinel Network, which monitors consumer fraud and identity theft complaints made with the FTC and 150 other organizations.

Arizona topped the list of fraud complaints, followed by Alaska, Nevada, Washington and Hawaii.

Deschene said the FTC statistics may not include the 5,498 complaints filed with her office last year or the 1,600 to 2,000 complaints filed with the state Department of Commerce and Consumer Affairs.

"Statistically (most) people don't file complaints," said DCCA Executive Director Steve Levin. "Believe it or not, some people if they've lost 30, 40, or even 50 thousand dollars will suffer in silence and won't tell anybody. But they should."

In many cases fraud victims, often the elderly, never get their money back.

"Just because someone calls you and says they're representing the Spanish lottery and you've won a million dollars doesn't mean it's true," said Levin. "Usually they'll say the prize winner needs to send them money to pay for taxes or lawyers, and that's a scam.

"And you send that money, it will usually be wired to other countries, and once that money is gone, it's gone."

Levin warns that those who defraud people for a living also tend to hit the same victims over and over again, because they have proven themselves to be an easy target.

"It's not unusual for someone to call up a victim who's lost $10,000 and say they can help get back their money ... just give them $500," he said. "Then that's gone, too."

"Some of these scams, they've been around forever, and people keep being victimized," said Nishi. "We keep reminding the public to be careful and they keep on giving their money to these people. ... There's always going to be victims out there."

Police and other consumer advocates say the best defense against fraud is to be alert and skeptical of cons and scams that come by telephone or over the Internet.

"You shouldn't have to pay anything if you've won a prize," reminds Levin. "Anytime someone receives a solicitation like that they have to really do their homework before responding.

"Otherwise, I'd say you have a zero percent chance of getting your money back."

Danger signs of fraud >> Telemarketers who ask for a fee up front for a credit card or loan or to "repair" your credit. >> Companies that ask you to pay or buy something to win a prize, or a claim that paying will increase your chance of winning. >> Companies selling foreign lottery tickets by phone or mail. >> Pressure to act immediately. >> Refusal to send written information. >> Use of scare tactics. >> Demands to send payment by wire or courier. >> Demands for payment of taxes or customs fees to claim a prize >> Requests for financial account numbers even though you're not paying for something with them. >> Promises to recover money you've lost in other scams, for a fee. >> Claims that you can make lots of money working from home. >> Refusal to stop calling when you say you're not interested. >> E-mails from companies asking to verify personal information they should already have. Source: National Consumers League National Fraud Information Center