Deceptive Mail:

Consumers' Problems Appear Substantial

T-GGD-99-150: Published: Aug 4, 1999. Publicly Released: Aug 4, 1999.

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Bernard L. Ungar
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Pursuant to a congressional request, GAO discussed matters related to deceptive mail marketing practices, focusing on the extent and nature of consumers' problems with deceptive mail and the initiatives various federal agencies and other organizations have made to address deceptive mail problems and educate consumers.

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.

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