Conclusion

This report documents the fact that the consumer fraud "industry" is sophisticated, tenacious, and constitutes a significant economic threat to consumers. It also highlights the fact that effective enforcement demands a creative, coordinated, and comprehensive approach involving the entire law enforcement community and legitimate businesses. The year 1996 was one of unprecedented cooperative effort by the FTC and its partners and is a valuable model for action.

Preliminary data suggest that these cooperative efforts had a substantial impact on fraud. Combined criminal and civil law enforcement in Nevada, California, New York, Tennessee, and Florida resulted in a reduction in the numbers of complaints of certain types of fraud emanating from these areas. Media coverage of law enforcement efforts and consumer education messages in Project Roadblock and $cholar$cam were followed by increased consumer complaints, indicating that public awareness of particular scams had been raised. Federal and state authorities also continued to sweep out particularly troublesome sources of fraud by vigorously enforcing the Telemarketing Sales Rule, which regulates and prohibits abusive, deceptive conduct.

Ultimately, consumer vigilance against deception is critical. Law enforcement agencies must also continue to find innovative ways to leverage their actions, and produce and disseminate consumer education materials that encourage consumers to avoid and report fraud. Only the combination of consumer education and law enforcement will deter fraud promoters from exacting further losses from consumers.