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CONSUMERS
COUPON DEMAND AND USE REMAINS STRONG IN 2009 2008
PROMOTIONAL TRENDS REPORT FSI
COUPONS OFFER $320 BILLION IN INCENTIVES IN 2007 RECOMMENDATIONS TO REDUCE YOUR EXPOSURE TO IDENTITY THEFT
FIFTEEN
RECOMMENDATIONS TO PROTECT AGAINST IDENTITY AND CREDIT CARD THEFT
HOW
TO REDUCE YOUR EXPOSURE TO CREDIT CARD THEFT HOW
TO PROTECT YOUR CREDIT CARDS FROM IDENTIFICATION THEFT
CREDIT CARD FRAUD INCREASES WORLDWIDE HOW TO PROTECT YOURSELF FROM IDENTITY THEFT & CREDIT CARD FRAUD IFCC REFERRED MORE THAN 48,000 FRAUD COMPLAINTS TO LAW ENFORCEMENT IN 2002 16 ARRESTED FOR $4.5 MILLION COUPON FRAUD PLOT IN 15 STATES TERRORISM
INVESTIGATION FOCUSES ON ARAB BUSINESSES FUNDING MILITANT GROUPS IS BRINGING IN A CONSULTANT THE RIGHT DECISION FOR YOUR COMPANY? TARGETING PROMOTIONS TO IMPROVE SPENDING SENATE COMMITTEE INCREASES REGULATIONS OF SWEEPSTAKES
RESEARCH ARTICLES MARKETING
RELATED ARTICLES REBATE & PREMIUM FULFILLMENT ARTICLES FREQUENT SHOPPER & RETAILER ARTICLES
Value-centric Shoppers Save $3.7 Billion in 2010 Using Coupons LIVONIA, Mich., Jan. 20, 2011 /PRNewswire via COMTEX/ -- Valassis (NYSE: VCI), one of the nation's leading media and marketing services companies,announced today that shoppers saved $3.7 billion with coupons in 2010, according to the Annual Topline U.S. CPG Coupon Facts Report for Year-end 2010, released by NCH Marketing Services, Inc., a Valassis company. An additional $200 million was saved in 2010, representing a 5.7% increase from 2009.
Redemption volume in the United States grew 3.1% to 3.3 billion CPG coupons in 2010. The increasing trend in consumer use of coupons was further supported by NCH's Consumer Survey, finding that frugal consumer shopping habits as a result of the recession continued in 2010, maintaining overall high consumer coupon use and an increasing regularity of coupon use. In 2010, the survey reveals that 78.3% regularly use coupons compared to 77% in 2009, 75.8% in 2008 and 63.6% of consumers in the pre-recession survey of 2007.
At Center Stage for Future CPG Success November 2010 Executive
Overview SymphonyIRI's Times & Trends highlights new
developments and critical events across all major CPG categories and channels,
providing powerful benchmarking data to help guide your strategic decisions.
This edition of Times & Trends explores center store sales and share trends,
as well as strategies CPG marketers are leveraging in an effort to protect and
grow share of this valuable piece of the CPG pie Introduction
From health care and home care, to food and
beverages, center store plays a vital role in meeting consumers everyday CPG
needs. This area of the store represents about two-thirds of total CPG sales. Long before the recession hit, competition for
share of center store sales was intense. Since that time, and throughout the
course of the recession, the battle for share of center store categories has
remained quite intense. Across CPG channels, CPG marketers have aggressively
priced and heavily promoted these categories in hopes of drawing in shoppers and
winning share of wallet. Private label is an important differentiator for
retailers looking to protect and grow their center store sales. That said,
national brand manufacturers have turned up the heat on their competitive
strategies. Recent data suggest some of these strategies are working, as private
label share growth has moderated, or even turned negative, across some CPG
categories. Select Findings
On average, center store experienced slow growth in the past year, but growth trends vary at the category level. Prevailing consumer trends, particularly self-driven health and wellness and home-based eating rituals, are key drivers of center store growth. Even as the economy improves, consumers remain quite conservative, and these trends are expected to remain strong in the foreseeable future .
Nearly three-quarters of center store categories experienced stepped-up promotional support during the past year. These efforts are geared toward driving demand and providing a measure of price relief to recession-weary shoppers. But, consumers quickly learned to shop around for the best deal, and became trained to seek out promotions. Todays CPG marketers are in danger of leaving significant money on the table in their quest for share of wallet.
See the complete
report in the "Center
Store: At Center Stage for Future CPG Success"
pdf.
CPG Marketers Drop 18 billion More Coupons in 2010 First Half Marketers continue to dish out millions of
coupons and consumers are redeeming them at a fast pace. During the first half of 2010, consumers saved nearly $2 billion with coupons, a 37% increase over pre-recession levels, NCH Marketing Services.
U.S.
Coupon Market Posts Record-breaking Distribution and Redemption Numbers in 2009 LIVONIA,
Mich., Jan 29, 2010 Vallassis announced today that shoppers saved nearly $3.5
billion with coupons in 2009, according to the Year-end 2009 Consumer Packaged
Goods (CPG) Coupon Industry Facts Report recently released by NCH Marketing
Services, Inc., a Valassis company. A record number of coupons in the
marketplace contributed to this increase of $800 million, or nearly 30% more
than 2008. CPG coupon distribution increased by 11% from
2008, to a total of 311 billion coupons distributed in 2009 - the largest
single-year distribution quantity ever recorded. The majority of 2009 coupon
distribution growth occurred as marketers chose to put paper coupons in the
hands of consumers in a variety of different ways to stimulate product purchase
decisions last year. Consumers redeemed nearly 3.2 billion coupons in 2009, a
23% increase over the prior year. This growth represented the second-highest
increase ever recorded for year-over-year coupon redemption. Marketers also
increased the average face value of coupons - up to $1.41 in 2009 from $1.29 in
2008. "With interest in coupons by consumers
at an all-time high and lasting savings habits being formed, we expect that
coupons will continue to be an important tool marketers will use to reach and
motivate consumers in 2010 and beyond," said Suzie Brown, Valassis Chief
Marketing Officer. "Through our consumer brand, RedPlum, we deliver savings
and deals to over 100 million shoppers a week. These findings indicate our
RedPlum portfolio is incredibly well positioned to deliver the values consumers
are seeking today and tomorrow." Personal economic situations are causing
consumers to make changes in savings and lifestyle habits. Over 30% of
respondents to a 2009 NCH Consumer Survey indicated they are now more careful
about remembering to bring their coupons to the store, with 74% stating they
would maintain this new habit. Twenty-five percent of respondents also said they
are now clipping more coupons than in the past. "The state of the economy is influencing
manufacturers and consumers as it relates to both distribution and
redemption," said Charlie Brown, NCH Vice President of Marketing.
"This recession has been long enough and unemployment has been high enough,
to have placed a greater emphasis on spending and savings habits since the last
period of deep In addition, results from NCH consumer surveys indicate 88%
of respondents plan shopping lists using coupons, up 10 percentage points from
before the recession began. Seventy-seven percent of respondents also indicated
they regularly use coupons, up from 64% in 2007.
New
Findings Point to Continued Rise in Coupon Distribution and Usage Valassis
announced today that shoppers saved $600 million more in the first nine months
of 2009 compared to a year ago, according to the Third Quarter 2009 Consumer
Packaged Goods (CPG) Coupon Industry Facts Report recently released by NCH
Marketing Services, Inc., a Valassis company. This upward trend - a 30% greater
savings - points to a permanent change in the mindset of today's value-seeking
shopper. In
response to the increased demand for value, the Nov. 15 RedPlum(TM)
free-standing insert coupon book will include an estimated savings of up to $70.
At an average size of 49 pages, RedPlum's Nov. 15 coupon book will be 81% larger
than cooperative coupon booklets delivered in 2009. Rich in CPG and traditional
grocery coupons, the book will deliver value during the heavy holiday spending
time.
COUPON
FRAUD IS ON THE RISE AND SOME MANUFACTURERS AND SOME RETAILERS ARE CRYING FOUL Wallstreet July 1, 2009 - From 1986 to 2001, the Coupon Information Corp., a nonprofit watchdog for the coupon industry, reported only two cases of investigated or prosecuted coupon fraud. In 2007, there were only nine. However, in the last year and a half, there have been 93 such cases and the numbers are expected to continue to rise as the recession drags on and the Internet offers new tools for coupon fraud. CIC says the cost of these counterfeits has easily been in the tens of millions of dollars, according to a survey of 24 major consumer-products manufacturers. One consumer-product manufacturer estimates its losses to counterfeit coupons at more than $3 million a year. "People are desperate to steal now," said CIC Executive Director Bud Miller. "And it's going to get worse before it gets better." Manufacturers and CIC held a meeting in Washington, D.C., last week to update their joint efforts to fight coupon fraud. Techniques used in coupon fraud include reprinting in-store coupons and even smudging barcodes to extend expiration dates. Coupon redemption in the fourth quarter of 2008 rose nearly 10% from the year before, the first jump in redemption since the early 1990s. The weak economy was a major factor in stopping the steady decline that coupon redemption had seen in the years prior to 2006. The peak year for coupon redemption was 1992, at the end of the last major recession, when 7.9 billion coupons were redeemed. Larry Joseloff, vice president of National Retail Federation, said retailers have few options to control coupon usage. They can either set a certain number of times a customer can use a coupon or make each code unique and never issue randomly generated, transferable coupons. In January 2008, Nestlé Purina Petcare Co. issued 250 coupons for a free bag of its adult dry dog food. As of May 5, 2,754 coupons for the product have been redeemed, the company said, but declined to comment further on coupon fraud. This month, Coca-Cola Co. had to withdraw a free 12-pack coupon from its "My Coke Rewards" program due to "widespread counterfeiting," warning consumers in a statement that "attempts to submit counterfeit coupons may result in civil action or criminal prosecution." Drugstore chains have also been targeted, with Web sites specifically created to trade or discuss coupon use from the chains. CVS Caremark Corp. said the Web sites infringe on it intellectual copyrights and said any "links to any printable in-store redeemable CVS coupons are unlawful." CVS spokesman Michael DeAngelis says the company's ExtraCare program, which gives loyal customers exclusive savings from the retailer and its manufacturing partners, such as Unilever PLC and Coke, helps thwart some coupon misuse and online coupon abuse by linking the coupons with customer loyalty cards. However, Walgreen Co. spokeswoman Tiffani Washington notes the use of "Internet coupons is difficult to control."
Source: RedPlum 2009 Online Survey
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 | The brand’s objective. |
| The appropriate mix of touch points. |
| The cost to implement the tactics. |
| Potential logistical challenges. |
| The target audience. |
TNS polled 522 shoppers online in February who do at least half of their grocery shopping for the household.
Senate Judiciary Committee passes the
Identity Theft Enforcement and Restitution Act of 2007
Last year, more than 8 million Americans became victims of identity theft. Identity thieves are becoming more aggressive and sophisticated in their tactics online and as a result, more victims of identity theft are having trouble obtaining credit, protecting their account balances, securing loans, and getting jobs.
Senators Patrick Leahy, Dick Durbin and Arlen Specter have introduced a bipartisan bill in the Senate to fight cybercrime and provide prosecutors with the tools they need to fight identity theft, particularly on the Internet. It will also help victims of identity theft receive full restitution (compensating them not only for their direct losses but also for the loss of time and money spent restoring their credit). But identity thieves don't just target individuals as these cyber criminals often try to manipulate American businesses as well. This legislation would also expand the coverage of federal computer fraud laws to small businesses and corporations.
The Senate Judiciary Committee has already approved this critical legislation and is being presented to the House of Representatives. The Identity Theft Enforcement and Restitution Act of 2007 has widespread support, including from the Department of Justice, the Secret Service, federal prosecutors and investigators who specialize in identity theft cases, business groups, and consumer organizations.
CHICAGO POSTAL INSPECTORS TARGET SCAMS
U.S. Postal Inspection Service will air a new show offering advice to consumers
called "Don't Fall For It" and will be hosted by Tom Brady,
the inspector-in-charge for Chicago. The first show will cover what
investigators say is the leading scam in Chicago. In a bid to counter the
growing number of fake-check scams, the scams involve con artists sending out
counterfeit checks, trying to persuade victims to wire back part of the money
before realizing the checks have bounced. The show airs on CAN-TV.
The first cable effort includes an interview by David Colen, assistant
inspector-in-charge, of a postal inspector who just returned from Nigeria and
will address moves to head off the problem overseas. Inspectors plan to target
identity theft and telemarketing fraud in coming months.
The postal service Web site supports a link to http://www.fakechecks.org
, which has scam-prevention tips.
MAN FRAUDULENTLY OBTAINED HUNDREDS OF CREDIT
CARDS WITH FALSE ID’S
A Morton Grove man charged with identity theft and fraudulently obtaining
hundreds of credit cards spent most of his time on the Internet or on the phone
to credit card companies pretending to be other people has been ordered held
without bail. He told investigators he kept a supply of false IDs handy so he
could disappear if he got in trouble, a court filing states. A family member
told police that Mohammad Afzal Sodagar, 51, had no real job, according to
federal charges against Sodagar, who appeared in U.S. District Court. He was
involved in credit card fraud and that was his sole source of income," one
relative told investigators, according to an affidavit by U.S. Secret Service
Special Agent Allen Tiffin in support of the charges. Sodagar, a native of
Pakistan, is a naturalized U.S. citizen.
In an earlier investigation a few years ago, he told authorities he kept
fictitious identification and credit cards handy so he could go into hiding if
he ever got into trouble in this country, the filing states. Sodagar was
arrested late last year on state charges after his son called police to report
his father was threatening him. Last week, the Cook County state's attorney's
office asked that state charges be dropped in favor of federal prosecution. The
federal complaint alleges Sodagar obtained about 400 credit cards, dozens of
Social Security cards, more than a dozen driver's licenses and several
passports.
In pursuit of false identities, Sodagar filed false tax returns and kept several
post office boxes in Morton Grove and Niles, according to the federal complaint.
He claimed to be a television producer, but family members said he rarely
worked. Sodagar's attorney, Bruce Brandwein, declined to comment after the
hearing before U.S. Magistrate Judge Sidney Schenkier. Brandwein previously had
said he expected his client to plead not guilty to state charges. Sodagar could
face up to 10 years in prison if convicted on charges of fraudulently possessing
Social Security cards and possessing more than 15 credit cards in the names of
others, Assistant U.S. Atty. Christopher McFadden said in court. Prosecutors
moved to have Sodagar held without bail because they view him as a flight risk.
Sodagar pleaded guilty in 2004 to a misdemeanor charge of possessing a
fictitious driver's license after Illinois secretary of state face-recognition
software found Sodagar had gotten nine Illinois driver's licenses or state ID
cards. Each had a different name but used what appeared to be photographs of
Sodagar. The computer program analyzes photographs of faces and indicates when
they are likely to be different photographs of the same person.
Sodagar, known to acquaintances as Afzal Sodagar, came to the attention of
authorities in late November because of a domestic dispute involving his son.
Morton Grove police responded to a call by Sodagar's son, Saarum, who said his
father had threatened to shoot him. After receiving permission from Sodagar's
family to search their house for a weapon, officers noticed envelopes stuffed
with $100 bills and a briefcase containing credit cards in Sodagar's closet,
according to the complaint. There was recent activity on cards found in
Sodagar's home, including a Target Visa and Kohl's department store credit card,
but he has not been charged with defrauding credit card companies.
Police returned to the home the next day with a search warrant and found about
three dozen Social Security cards, about a dozen state identification or
driver's license cards with Sodagar's photograph but false names, and about
$60,000 in cash and gold, according to the complaint.
When his home was searched last year, Sodagar also had a U.S. Customs stamp used
on the travel documents of permanent U.S. residents when they return from their
home countries. Sodagar used the false identities to open accounts or get credit
cards with companies including American Express, Citibank, Bank One/Chase,
Target and Kohl's, officials said. Payments on some of the cards were made up to
Nov. 29, the day his home was searched, prosecutors said.
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IF YOUR ARE A VICTIM OF FORGED CHECKS
According to a recent Federal Reserve study, banks lost $711 million to check fraud in 2006 and estimated loses to consumers and businesses were as high as $20 billion a year. If you become a victim of forge checks, you should:
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Immediately report the theft to your bank, close your account and open a new one. |
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Obtain a notarized affidavit of forgery from the bank showing the range of stolen check numbers. |
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File a police report and get a copy. |
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Place credit alerts on your files at the three credit reporting bureaus so new account cannot be opened without your knowledge. |
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Respond promptly to payment demand letters from businesses and collection agencies with a brief cover letter and copies of documentation showing some checks were stolen. |
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Follow-up with collection agencies to ensure that your name has been cleared from their bad checks list. |
ADVO
STUDY REVEALS HISPANICS REDEEM COUPONS
A study by direct mail media company Advo has found that Hispanic’s redeem coupons at the same level as other demographic groups. They obtain coupons from newspaper inserts, direct-mail and in-store take-one machines.
The Advo study also found:
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Hispanics use coupons for more than their usual brand purchases. |
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74% of Spanish only/preferred Hispanics say they use coupons and would use them more frequently if they received more. |
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77% of English only/preferred Hispanics sometimes use coupons. |
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55% of bilingual Hispanics at least sometimes used coupons, compared to 45% of Spanish only/preferred. |
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Circular readership is 32% higher among Hispanics than non-Hispanics. |
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40% said they only receive 10 pieces of direct mail a year, and 39% said they want to receive more. |
Vincent Andaloro, president of Latin-Pak stated that "If advertisers would spend more money on coupons they would reach more Hispanic consumers because they skew 33% higher on supermarket spending on a weekly basis than traditional general market families." The Hispanic family unit is much larger, so they need more food and they eat home more often." Latin-Pak deliver coupons via direct mail, using Hispanic consumer databases. It also delivers them door-to-door, and sends Spanish-language free-standing inserts. Its weekly FSI circulation is about 9 million.
Marketers should make sure coupon campaigns are culturally and geographically relevant, especially when it comes to food products and recipes, using frequent and consistent messaging. They should also conduct in-store sampling events with bilingual personnel.
Coupon redemption rates range from 6% to 24% and sales can go up by 20% to 65%, depending on the brand and offer, says Geoff Gropp, president of the Hispanic Retail Network, a company that offers in-store dispensers with coupons. An estmated 73% of all Hispanic shoppers enjoy looking through coupons and offers in the mail and 62% choose stores based on coupon offers and 60% of Hispanics look through direct mail grocery flyers on a regular basis according to El Mercado, a 2005 study on U.S. Hispanic shopping behavior from the Food Marketing Institute.
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IDENTITY THEFT LOSSES DECLINE BY 12 PERCENT IN 2006
Dow Jones Newswires, Published February 2, 2007 - While
identity theft remains a multibillion-dollar problem for businesses and
individuals, incidents of this type of fraud dropped last year. U.S.
identity-theft losses declined in 2006 by 12 percent from the previous year,
$55.7 billion to $49.3 billion, according to the third annual survey by Javelin
Strategy & Research, a research firm in specializing in financial services
and payments. The survey, which involved 5,000 telephone interviews, estimated
that the number of victims dropped for the fourth consecutive year, down about
500,000 to 8.4 million persons.
Researchers attributed the decline to better consumer education and awareness,
as well as increased use of online banking and financial sites that allow
individuals to monitor their accounts more frequently."Businesses are doing
a lot more, law enforcement is doing more and so are consumers," said James
Van Dyke, president of Javelin.
Tena Friery, research director at the Privacy Rights Clearinghouse, a non-profit
consumer organization in San Diego, said she was surprised by the size of the
decline, but she noted there is much greater public awareness about the problem.
"We still have a long way to go," she said. "We really do stress
that it's not all the consumer's fault."
According to the report, there was a significant reduction in fraudulent
new-account openings, traditionally one of the most common types of identity
theft. It occurs when a criminal uses a victim's personal data to open an
account. The survey also found that it took on average less time and expense to
resolve a fraud case than the previous year.
IDENTITY THEFTS COSTS CONSUMERS $57 BILLION IN 2005
Consumers in the United States lost $57 billion in 2005 to criminals who stole their identities according to a study by the Council of Better Business Bureaus and Javelin Strategy & Research. It revealed that identity theft cost U.S. consumers 4% more in 2005 than the $54.4 billion it cost in 2004. The average fraud rose to $6,383 from $5,885. The 8.9 million Americans who learned that criminals had stolen personal data and used it to commit fraud fell 4%, from 9.3 million in 2004 and 10.1 million in 2003. Data showed that people who were younger and had lower incomes were more vulnerable.
Unfortunately, it is not very difficult to commit identity fraud. There are several ways that the thieves commit identity theft such as Internet fraud, "phishing," a much-publicized practice where criminals send e-mails asking prospective victims to verify personal data through links to real-looking, but fake, web sites. In addition, victims lost data because their wallets, checkbooks, credit cards that were lost or stolen, victimized by family members, friends, acquaintances, or fellow employees, and stolen or misdirected mail.
In general, people whose incomes were less than $35,000 reported larger frauds, though people who earned $75,000 to $100,000 a year reported the biggest average fraud totaling $9,978. The median fraud totaled $750, unchanged from a year earlier. The survey found that "Generation X," which it defined as people aged 25 to 34, are more at risk than older people, perhaps because their "more active lifestyle" encourages fraud. The survey said a typical fraud costs $422 and takes 40 hours to fix. While fraud takes an average of 84 days to detect, 40% of cases are resolved within one week.
Consumers can protect themselves by closely monitoring their credit reports, personal accounts, and reviewing mail that contains financial statements. Putting fraud alerts on credit reports is an effective way to thwart future fraud. Monitoring your account activity is a crucial early discovery point for possible fraud.
Please Note Illinois has formed a new hotline for residents to report identity theft and take steps to repair their credit and prevent future problems. Attorney General Lisa Madigan said the line is designed to provide immediate counseling. Illinois residents can reach the hotline by dialing (866) 999-5630. For the hearing-impaired, the TTY number is (877) 844-5461.
ID THEFT RING DISCOVERED BY RESEARCHERS
Spyware researchers dissecting one of the more notorious spyware programs have stumbled upon what appears to be a massive identity theft ring hijacking confidential data from millions of infected computers. Sunbelt Software Inc., makers of the enterprise-grade CounterSpy spyware protection product, made the discovery during an audit of "CoolWebSearch," a program that routinely hijacks Web searchers, browser home pages and other Internet Explorer settings. During the research, Sunbelt researcher Patrick Jordan deliberately installed the "CoolWebSearch application on a machine and immediately noticed that the infected system became a spam zombie that was placing callbacks to a remote server. When Jordan visited the remote server, he was shocked to find that it was being used to distribute sensitive personal information from millions of PC users infected by the spyware application.
"We found the keylogger transcript files that are being uploaded to the servers. We're talking real spyware stuff…chat sessions, usernames, passwords, bank account information, full names, addresses," said Sunbelt president Alex Eckelberry. He said the sophistication of the operation suggests it's the work of a "massive identity theft ring" that used keystroke loggers to grab confidential information that could be used to create fake online identities. As the [log] file gets to a certain size, it gets taken down and a new file starts generating. This goes on nonstop. We've been watching it for a few days while trying to get to the FBI, and it just keeps growing and growing. While the site is being hosted in the United States, Eckelberry said the domain name is registered to an offshore company.
"This won't get caught by a typical anti-spyware application," he said, noting that the keystroke logger was able to pick up identity-related data for delivery to the remote server. Anti-virus vendor Trend Micro Inc. provides a free online scanning tool that detects and deletes the "CoolWebSearch" application. The tool is available for the Microsoft Windows XP, Windows 2000, Windows Millenium Edition and Windows 98 operating systems.
$800,000 COUPON FRAUD, MONEY LAUNDERING AND THEFT BY DECEPTION
New Jersey officials charged Jordanian-born Abdellatif Yasin Aljuneidi, 38,
with first-degree money laundering and theft by deception. Aljuneidi is at large
after posting a $400,000 bond and missing a March court date. He faces up to 30
years in state prison and a fine up to $650,000, according to the state.
Aljuneidi allegedly convinced dozens of retailers to participate in a
"redemption program" that gave storeowners cash payments for
misredeeming manufacturer coupons. He allegedly sent fraudulent applications to
an undisclosed coupon clearinghouse, grossly inflating the size of participating
stores and their coupon-related sales in order to explain the large amount of
coupons submitted for redemption by each store. The submissions on behalf of 17
stores netted $800,000 in reimbursement from the clearinghouse. Aljuneidi
allegedly demanded 50% or more of the reimbursements from retailers, whose
stores were ineligible for redemption funds.
The Money Laundering Section of the Financial Crimes Bureau worked with
non-profit Coupon Information Corporation to uncover the scheme running in New
Jersey, New York, Pennsylvania and South Carolina from April 2000 through
October 2003.
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ID THEFT ANT INTERNET FRAUD COMPLAINTS CONTINUE TO GROW
Consumer fraud and Identity theft complaints in the U.S. increased 17 percent in 2004 with ID theft the leading category for the fifth consecutive year according to the Federal Trade Commission. The FTC said the number of complaints rose to 635,173 from 542, 378 in 2003. Consumers reported fraud losses of more than $547 million in 2004 with a median individual loss of $259. Identity theft represented 42 percent of all complaints in 2003, up from 40 percent the year before. The most common cases of identity theft involved credit cards, followed by telephones or utilities, banks and workplace fraud. Internet auctions represented 15 percent of the complaints; shop-at-home/catalog sales accounted for 9 percent; and Internet services and computer complaints made up 6 percent. Other top categories included prizes, sweepstakes and lotteries; foreign money offers and advance fee loans and credit protection. Overall, 516,740 consumer complaints were filed last year, up from 404,000 in 2002.
Internet auctions were the second largest complaints. Reports of Internet-related fraud now account for more than half the consumer complaints filed with the Federal Trade Commission. Internet-related fraud was the subject of 55 percent of the more than half-million complaints filed in 2003, up from 45 percent a year earlier, the FTC said. The median loss for victims of Internet-related fraud was $195.
INTERNET FRAUD INCREASES THREEFOLD
The Internet Fraud Complaint Center
(IFCC), with support of the National White Collar Crime Center and the U.S.
Federal Bureau of Investigation, referred some 48,252 cases of online fraud in
2002, a threefold increase over 2001. The $54 million in total losses from those
referred cases was triple those of the previous year. Auction fraud is by far
the most prevalent form of online fraud reported, representing nearly half of
the IFCC’s total cases. Other popular scams include nondelivery of merchandise
or payment, and credit- or debit-card fraud. The most expensive fraud scheme is
the "419" scheme, named for an article in the Nigerian penal code, in
which the target receives an e-mail requesting urgent help with a transaction
and promising thousands of dollars in fees in return for an up-front payment,
often for "bribes" to be paid to the Nigerian government. Despite its
notoriety, this scam continues to find victims, whose median losses total
$3,864, according to the IFCC.
While the Internet has improved the way in which global companies conduct
business, they also present opportunities for fraudulent groups and individuals
around the world to revive age-old schemes online. Companies suffer damage to
their reputations when scammers misuse a company’s name, logo, or Web site to
commit fraud against consumers. Many financial institutions have seen
sophisticated criminals setup bogus "front-door" Web sites that are
almost indistinguishable from the companies real Web page, on which customers
are asked to enter private information.
Technology moves faster than the law, and the private sector has an advantage over law enforcement, as there are very few new frauds, only the technology is new. Even with the technological advancements, most scams come down to human interaction either by an unsolicited phone call or e-mail from someone who knows exactly what to say to exploit your vulnerabilities. Fraud can also be a more complex conspiracy of individuals or organizations looking to defraud people. Companies must classify online databases so that few individuals have access to the range of corporate data; using Internet-trolling or "spidering" technology to search out misuse of corporate names or logos; communicating with customers only in secure settings and keeping them informed of threats and preventive measures. They must view security and fraud prevention as a competitive advantage and the key is to make security a strategic marketing principle in everything you do.
RFID
PRIVACY LEGISLATION PROPOSED
California Senator
Debra Bowen has proposed legislation to set privacy standards for Radio
Frequency Identification technology. Bowen said that retailers and manufacturers
hope to save millions of dollars by automating the retail supply chain with RFID
tracking systems, but that privacy advocates fear the technology will become
omnipresent and give marketers another method to track people's whereabouts and
habits. "The privacy impact of
letting manufacturers and stores put RFID chips in the clothes, groceries and
everything else you buy is enormous," Bowen said in a statement.
"There's no reason to let RFID sneak up on us when we have the ability to
put some privacy protections in place before the genie's out of the
bottle."
SB
1834 requires any business or state government agency using RFID technology with
the capability to track products and people to:
| Tell people they are using an
RFID system that can track and collect information about them. |
| Get express consent before
tracking and collecting information. |
| Detach or destroy RFID tags
that are attached to a product offered for sale before the customer leaves
the store. |
Manufacturers
and retailers had long debated whether tags should be embedded at case and
pallet level or on individual packaging. Numerous consumer packaged goods
companies are testing the technology at the pallet and case level, however,
privacy concerns about a test that a Wal-Mart in Broken Arrow, OK, and Procter
& Gamble conducted last year concerned Bowen.
To
determine if the real-time data P&G received from RFID tags attached to one
of its lipsticks in the Wal-Mart was accurate, a Webcam was set up in an isle to
monitor the on-shelf inventory. Some media reports said that Wal-Mart and
P&G had been spying on customers and had allowed them to walk out of the
store with RFID tracking devices attached to the packaging. P&G said the
test was conducted solely to verify the real-time accuracy of tracking data
against the actual in-store stock and that the Webcam was installed in plain
view and that a sign on the shelf alerted customers that closed circuit TV and
electronic devices were in place.
Wal-Mart
notified its top 100 manufacturers last year that tagging would be a
requirement. It has signed up 138 manufacturers and expects more to join in
testing the tags beginning in January 2005 in 150 Dallas-area stores. Wal-Mart
plans to expand RFID tagging in the U.S. through 2005, with all suppliers
tagging all cartons and pallets by the end of 2006. Wal-Mart has said that it
could take 10 to 15 years before RFID tags are required on individual packages.
RFID
data is expected to reduce out-of-stock problems and theft. An average 7.9% of
products are out of stock at any given time. It is also expected to speed
shipping, inventory tracking and consumer check-out in stores without adding
labor costs. Bowen chairs the Senate Subcommittee on New Technologies, which
held two hearings last year on RFID technology and privacy.
MAN CAUGHT WITH 1,700 CREDIT CARDS ACCUSED OF IDENTITY FRAUD
The
Alamance County Sheriff's Office
has arrested a Maryland man on 10 counts of financial identity fraud, according
to The Associated Press.
More charges are expected as local authorities and the U.S. Secret Service is
investigating. Authorities claim
a man identified as Benjamin Uzzell, 45, of Accokeek Maryland was in possession
of 1,700 credit cards with lines of credit valued in excess of $405,700. Officials began investigating on July 10 after vice-officers
were informed of "suspicious activity" at several small businesses in
Graham. They found the credit card numbers, identification cards and checkbooks.
SMART
CARD AND RFID PAYMENT SYSTEMS WILL CONTINUE TO RISE
A
study by Celent, an IT research and consulting firm says
the use of contactless smart cards and other RFID payment systems will continue
to rise and will be as common as credit card payments within
five years. The report, titled "Contactless Payments: Replacing Cash with
Convenience: The Case for RFID," indicates that there are enough benefits
for consumers, merchants and banks to overcome obstacles including consumer
concerns about security and investments in new equipment that merchants would
have to make.
Celent's study focuses on markets that have a lot to gain from speedier
transactions on purchases of $20 to $100. Contactless payments offer convenience
for consumers, because it can reduce transaction times and eliminate long lines
at the checkout. Contactless payments are executed in close proximity to the
reader, lessening the likelihood of interception and most banks will set up the
same liability limits to RFID devices as they do to credit cards.
Merchants will have to invest in new point-of-sales equipment, plus software,
integration and processing costs and will also lose part of their traditionally
cash-based revenue to merchant discount fees, but the report suggests that those
merchants who have participated in early pilots are satisfied that these costs
would be offset by the increase in sales that comes from making purchases more
convenient. Banks also stand to benefit because they will earn fees on low-value
purchases that have always been done in cash. Plus, contactless smart cards
might provide a competitive edge in a down market.
AUTO-ID
CENTER OFFERS ROI CALCULATOR
The Auto-ID Center now offers a Return-On-Investment calculator on its Web site, http://www.autoidcenter.org/calculator/calculator.asp. The ROI calculator is designed to allow companies, including retailers, to estimate the potential payback of particular applications of Auto-ID technology. This technology uses RFID (radio frequency identification) in concert with EPC (electronic product code) microchips, to identify and track individual items, cases or pallets through the supply chain. Users of the tool input information about their company, or alternatively use default settings provided by the calculator. The tool looks at the benefits at retail distribution centers and stores in areas such as receiving, stock visibility, inventory reduction, inventory counting, picking, theft reduction, unsaleables and out-of-stocks.
Coupon
Conspirators
For
twenty years, individuals and organized group with ties to the Middle East and
organizations suspected to have supported terrorism have been cutting coupons
and illegally redeeming them, collecting between $100 million and $125 million
annually without actually purchasing any products, Consumer Correspondent Greg
Hunter reports for Good Morning America. One investigator says that given
the historical connection, it is likely that the funds contributed to the recent
terrorist attacks. I believe it contributed to the funding of September
11th," said Ben Jacobson, a private investigator with Peregrine Group.
Since Sept.
11, investigators have found that terrorists use a wide array of low-risk and
high-reward petty crimes to fund their operations including cigarette smuggling
and credit card fraud. In Maryland, for instance, the state comptroller's office
turned over a list of people who have smuggled cigarettes from one state to the
other, benefiting from differing state taxes. For years, coupon fraud has also
been part of this illicit portfolio.
A former New
York City police detective who testified before a U.S. Senate subcommittee on
this topic in 1998 said he uncovered a direct link (Mahmud Abouhalima, the man
who is now serving a 240-year prison sentence for masterminding the 1993 attack
on the World Trade Center) between coupons and the people who turned out to be
the perpetrators of the first bomb attack on the World Trade Center in 1993.
Abouhalima
was the manager of a Brooklyn video store that served as a meeting point for
those involved in the coupon scheme and as a processing center for millions of
dollars of coupon fraud in the New York area. The Brooklyn video store was used
as a shipping center where they would box the coupons and then send them out
through UPS. Omar Abdul Rachman, the blind sheik now serving life for the 1993
Trade Center bombing also operated a coupon fraud processing operation out of
the second floor of a mosque in Jersey City, N.J.
Terrorists
operating coupon-cutting operations start by crumpling up new coupons to make
them look used. Through a nationwide network of grocery stores in on the scam,
they then turn the coupons in to the manufacturer.
Back in 1987
in Florida, dozens of grocery store owners were arrested in a coupon sting, and
six were later convicted of fraud. The leader of the operation, Adan Bahour,
claimed on undercover tapes that he had ties to the Palestinian Liberation
Organization. Florida investigators had found that illegally obtained coupon
money was being sent to the Middle East.
With the advent of online coupons, it is now easier than ever for terrorists to commit coupon fraud. Good Morning America was able to get 1,000 pre-cut coupons worth about $700 for just $5 off of the Web. "I went on eBay, clicked a few mouse strokes, bought these coupons and they were delivered to my business," Bud Miller, who represents companies victimized by fraud, showed how easy it is to obtain large amounts of coupons. With an investment of $10, he can make $1,000. Miller sent letters to eBay CEO Meg Whitman asking her to prohibit the sale of coupons on the online auction site, arguing that the company could simply put coupons on its prohibited list.
AMERICAN
ATTITUDES TOWARD “THE BRAND”
The
results of a poll consisting of a 56 question survey of 800 adults regarding
their attitudes toward brands and the extent to which brand influences
purchasing decisions, the depth of brand loyalty and the differentiation between
national brands and store brands.
The survey data revealed that for many, “brand” is a means of identity. “Brand” also often equates to “value,” however the concept of “value” is a complex combination of price, quality, consistency, convenience, performance, and service. Men were equally as likely as women to be sensitive to the brand, quality and price.
The
survey also showed that in-store incentives or displays are successful means of
getting a shopper to “buy into” a brand. Consumers identify with, and adhere
to a “brand” and are deeply committed to those brands they have used the
longest.
| Consumers
shop at least once a week (41% once a week; 27% 2-3 times a week; and 2%
four or more times a week), and often at the same grocery store (57%),
although a significant minority (42%) are in fact “sale searchers,” and
are drawn to the store(s) they believe offer the best bargains. |
| Americans are most likely to
purchase different quantities each time they grocery shop, (59%), however
one aspect remains consistent—Americans fill their baskets and carts with
feature brands they use. |
| Almost one-half (49%) indicated that
“familiar brand name” was the first or second most important element. |
|
The
second highest percent of combined responses, “brand” trumped regular
cost of the product (32%), convenience (19%), recommendation (13%), and
advertisements (10%). |
Both
the “price” and “manufacturer” appear to be elements of a product that
Americans of all demographic groups frequently take note of prior to selecting
an item for purchase.
| A
full three-fourths (76%) consider the brand before making a final product
selection, including people of all income categories. |
|
Higher-earning
households are more likely to pay attention to the brand (82%, $90K+),
however a full 7-in-10 (70%) of people with household earnings between
$30K-$50K do the same. |
Catalina
Marketing Corporation was issued US patent #6,424,949 on July 23, 2002,
"Method and System for Selective Incentive Point-Of-Sale Marketing in
Response to Customer Shopping Histories," by the United States Patent and
Trademark Office. The patent involves the delivery of consumer promotions based
on shoppers' historical purchase data. This patent includes a variety of
methodologies and systems for delivering promotional communications based on
historical data. These methodologies and systems range from data processing and
analysis to the delivery of consumer promotions primarily at the point of sale.
Eric
Williams, Catalina’s Chief Technology Officer, stated "Catalina, in
addition to the check stand purchase, also does activity with direct mail, and
on the Internet and this patent, the way it is written, does not restrict us
from just delivering the incentive at the check stand. It covers almost all
aspects of delivery, of targeted communications, for the consumers. These
[patents] have been built over the past 10 years."
Barry Kotek, Managing Partner of Retail Systems Consulting that this patent may have a sweeping impact on any targeted coupons or electronic offers that are based on frequent shopper data. In this patent, Catalina claims the system at a retail store will have a way to read a number of customer identification codes and will track and memorize what identified customer’s purchase and will issue an incentive based upon those previous purchases, or on the frequency, dollar value or volume of purchases. They also have claims around the method of targeting which includes smart cards, electronic discounts, printed promotions at point-of-sale, or printed promotions delivered to the customers home address.
2011
INCENTIVE RESEARCH FOUNDATION TRENDS SURVEY
A
joint survey between the Incentive Research Foundation and Corporate Meetings
& Incentives found a slight improvement in incentive budgets from last year.
In 2009, 63 percent of respondents said, their budgets were “slightly to
significantly less” than in 2008, while in 2010, that number dropped to 46
percent. As in 2009, one-third of the 2010 respondents said budgets had remained
consistent along with a reduction of respondents,16 percent in 2010 versus 20
percent in 2009, said their incentive budgets were “significantly less” than
in the previous year.
Budgets
are expected to improve according to 40 percent of respondents in 2011 while
only 22 percent of respondents expect budgets this year to be lower than in
2010; 10 percent expect them to be “significantly lower”.
Twenty-three
percent of respondents expect their budgets to be slightly better in 2011 than
in 2010 more than doubling the 10 percent who last year predicted that 2010
budgets would be slightly better than in 2009. Almost one in five respondents
said their companies already have canceled a 2011 travel incentive (the same as
last year) and 9 percent reported canceling a 2011 merchandise incentive (up
from 4 percent last year). The economy was the underlying reason for budget cuts
and cancellations in 2010 (according to 72 percent of respondents). Only 27
percent attributed the cuts to media or public perception and 33 percent of
respondents also reported directives from upper management to alter their
incentives.
The
challenge for Incentive planners continues to be keeping costs down while making
their incentive trips attractive for attendees. The survey shows that cutbacks
made in 2010 were made with the intention of
reducing the quality of the program such as having fewer management
persoanl attend, eliminating welcome gifts and cutting the number of qualifiers
(which allowed them to keep the per-person budget up). These are among the top
changes predicted for 2011 by companies who are working with lower budgets while
other potential cutbacks in 2011 could have far-reaching implications for
both destinations and hotel categories. More than a third of respondents (38
percent) said they plan not to use five-star properties (up from 23 percent last
year), and 21 percent will avoid resorts or resort destinations (up from 11
percent last year). The news is good for all-inclusive, which offer higher
perceived value: 31 percent of respondents said they plan to use these
properties in 2011 (even though many are resorts).
For
Incentive planners, the challenges expected in 2011 include staying within
budget (53 percent of respondents), generating excitement about their downplayed
trips (26 percent), and choosing a destination that meets their criteria despite
their budget (20 percent) and how all of these changes are being perceived by
attendees.
The
feedback regarding program cuts from attendees responded that 48 percent were
grateful just to be having a trip”; 39 percent said feedback was “as
positive as in past years”; and 25 percent said attendees “are getting used
to a lower level of service and amenities.”
Under 10 percent said attendees were dissatisfied with the destination,
service, or property, about the same as last year (other than an increase in
dissatisfaction with the property from 3 percent last year to 8 percent this
year). Sixteen percent said winners were unhappy with program inclusions.
A review of the changes over the last ten years revealed that the most substantive differences are reductions in per-person budgets and increased ties to corporate social responsibility.
| In
2001, 43 percent of respondents said their incentive travel budgets had
remained stable in 2000, while 33 percent of respondents to our 2011 survey
responded in a similar way. In 2001, 39 percent of companies expected
budgets to increase in the following year, while only 20 percent of this
year’s respondents expect their budgets to rise. |
| The
average per-person spending on incentive trips in 2000 was $3,256; in 2010
it was down to $2,617. Factor in an annual inflation rate ranging from 3.85
in 2009 to 1.59 in 2002, therefore Incentive planners have much to spend
today. |
| The
average incentive trip in 2000 lasted 4.89 days, with three-quarters of
respondents holding trips of four days or more. This statistic was not
included in 2010 however, 45 percent of respondents
indicated that “shortening the length of the trip” was second in
cost cutting. |
| Of 2001 survey respondents, 59 percent held international programs, while in this year’s survey, 31 percent cited moving an international location to a domestic one as a cost-cutting measure. |
INCENTIVE
INDUSTRY TRENDS FOR 2011
The Incentive Research Foundation survey of 120 Incentive Travel buyers and suppliers revealed that:
Procurement Role in Planning and Implementing Incentive Travel Programs Change for 2011 versus 2010:
· 33% Remain Unchanged
· 32% Slight Increase
· 22% Moderate Increase
· 10% Significant Increase
· 3% Slight Decrease
· 1% Significant decrease
Anticipated Changes in 2011 Incentive Travel Program Budgets Change for 2011 versus 2010:
· 33% Remain Unchanged
· 31% Slight Increase
· 20% Slight Decrease
· 9% Moderate Increase
· 3% Significant Increase
· 3% Moderate Decrease
· 1% Significant Decrease
Expected Accommodation Changes for 2011 Incentive Travel Programs:
· 40% Decrease in Total Number of days/nights
· 32% Decrease in Total Number of Rooms
· 27% Change to “All-inclusive” pricing options
· 26% Decrease in On-site Inclusions per Participant
· 19% No Change
· 15% Decrease in Number of Room Upgrades
· 9% Increase in On-site Inclusions per Participant
· 9% Increase in Total Number of Rooms
· 7% Increase in Total Number of days/nights
· 3% Increase in Number of Room Upgrades
“Incentive Industry Trends 2011,”
conducted by Pulse Survey for the Incentive Research Foundation (IRF) disclosed that economic indicators have stabilized for the incentive industry and are improving with respondents indicating that they expect the incentive business will improve in both 2011 and 2012.Data was collected from 130 survey participants including incentive providers, corporate incentive travel buyers, incentive suppliers in September 2010. Participants were asked specifically about trends related to travel programs, merchandise non-cash programs, budgets for 2011, and other issues of interest to the industry.
Some of the key findings from the survey were:
Travel: 55 percent saw the economy having a positive impact on implementing travel incentives compared to just 33 percent in November 2009. The negative impact factor decreased from 53 percent to 28 percent.
Travel budgets: 44 percent of respondents saw an increase in budgets for travel for 2011, however 40 percent anticipated reduced number of days/nights per trips, 32 percent saw reduced number of rooms, and 37 percent were adding individual reward trips as an option over group travel.
Overall: 68 percent of Pulse Survey respondents predicted that business will be better for the incentive industry in 2011, with 77 percent saying it will be better in 2012.
Increasing procurement: Nearly two-thirds (64 percent) of participants agreed that corporate procurement departments will increase their involvement in travel program planning to some degree in 2011; 59 percent saw an increase on the merchandise side.
Merchandise: 46 percent of respondents in October 2010 saw the economy as having a positive impact on implementation of noncash merchandise incentives compared to just 24 percent in November 2009. Likewise, only 24 percent saw the economy as having a negative impact, compared to 34 percent one year ago.
Merchandise budgets: 55 percent anticipated an increase, 10 percent a slight decrease, with only 1 percent registering a significant decrease.
CSR: 23 percent of respondents said customers request corporate social responsibility (CSR) components to reward programs “often” or “every time,” with 51 percent requesting it “sometimes.”
Gift cards: 41 percent of respondents expect to see increased use of debit gift cards as an award selection for merchandise programs in 2011.
Social media: 58 percent respondents said they make use of social media to communicate with participants prior to an incentive or recognition program.
The overall findings are positive for the industry however, communicating the value of incentive programs is necessary as only 11 percent of survey participants indicate that they feel the industry is “doing enough to demonstrate the business value of incentives,” while 55 percent agree that more case studies would assist in demonstrating the business value of incentives.
$77
BILLION SPENT ON INCENTIVE TRAVEL, MEETINGS AND SPECIALS EVENTS
According to the 2007 Industry Profile Study: "The Market for Incentive Travel, Motivational Meetings and Special Events in the United States," $77 billion was spent on incentive travel, motivational meetings and special events in 2006. Of the total, $13.4 billion spent on incentive travel (an award earned based on performance), $25.9 billion on motivational meetings and $37.8 billion on special events (stand alone events that include business meetings, sales meetings and social customer gatherings),
Ten percent of large and small companies combined used incentive travel last year, while 50% used motivational meetings and 55% used special events. But overall, large firms (with annual revenue of more than $100 million) were partial to special events with 81% using the tactic; 61% used motivational meetings and 23% favored incentive travel in 2006.The most common goal of incentive travel was for sales incentives, said Rodger Stotz, vice president, managing consultant of Maritz Inc. and trustee of the Incentive Research Foundation’s research committee. Other goals included maintaining high morale and improving productivity, the study said.
The average incentive travel budget was $164,271 while the standard budget for special events was $78,029 and the average motivational meeting budget cost $68,330. More than half of large companies said their budgets for motivational meetings increased over the last two years, with 41% saying their budgets remained the same. Meanwhile, more than half of large companies said they believe spending on incentive travel will increase over the next two years; 37% said the budgets would remain the same.For special events, four in 10 large firms said their special events budgets increased over the last year, where 44% said the budgets have stayed the same. The study surveyed 1,121 small and large companies.
IDENTITY
THEFT: THE BUST-OUT SCHEMEIdentity thieve are using the "bust-out" scheme to steal your business identity. The criminal rents space in the same building as your company and then applies for corporate credit cards using your firm's name. The application passes a credit check because the company name and address match, but the cards are delivered to the criminal's mailbox. He sells them on the street and is long gone before you discover your firm's identity has been stolen. This is one way sophisticated criminals steals business’s identities across the country. Identity thieves increasingly target businesses instead of individuals because many state statutes don't consider business identity theft a crime. That's because most of identity theft laws passed in the last decade apply only to individual consumers.
Business identity theft can often be prosecuted under other statutes, like mail fraud or wire fraud, businesses victimized lose many of the protections afforded to consumers under identity theft laws, like access to information about their credit. Some studies indicated that there were as many as 8.9 million individual victims nationwide last year and estimated annual losses approaching $50 billion. It's difficult to say how many businesses have been victims of identity theft. But the most sophisticated identity thieves increasingly are targeting businesses because business accounts generally have higher credit limits and make larger purchases than consumers, so large purchases by thieves are less likely to be questioned. For these thieve, it is far more cost-effective to target a business rather than a consumer. On July 19th, 2007, the Justice Department requested Congress explicitly to include businesses and organizations in the federal identity theft statute.
Small businesses in particular are targeted because they may be less aware how to protect sensitive information. Business owners should protect themselves by keeping sensitive files under lock and key and by restricting access only to employees who need it. Unfortunately, if the loss is relatively small, under $10,000, law enforcement may be reluctant to investigate it and many U.S. attorneys have thresholds of $1 million at the federal level to prosecute.
FTC
LISTS IDENTITY THEFT AS #1 FOR THE SIXTH STRAIGHT YEAR
For the sixth year in a row, identity theft is the No. 1 source of complaints to the Federal Trade Commission. Over 255,500 people reported being victims of identity theft in 2005, up slightly from 247,000 in 2004. The Federal Trade Commission reports that identity theft cost consumers $5 billion and 300 million hours last year with 10 million people in the Unite
Arizona, Nevada, and California reported the most cases of ID theft, adjusted for population. The top metro areas for ID theft reports were Phoenix-Mesa-Scottsdale, AZ (178 per 100,000 population), Las Vegas-Paradise, NV, (159 per 100,000), and Riverside-San Bernardino-Ontario, CA, (146 per 100,000). The most fraud victimized cities were the Washington DC area (190 per 100,000); the Tampa-St. Petersburg-Clearwater, FL area (187 per 100,000), and Seattle-Tacoma-Bellevue, WA (186 per 100,000). Credit card fraud was the most common type of reported identity fraud, followed by phone or utilities fraud, sweepstakes, and advance-fee loans. Other top consumer complaint list included Internet auction problems (70,000), foreign money offers and Shop-at-home/catalog sales. Over 686,000 consumers filed complaints with the FTC in 2005. The number of consumers victimized via wire transfer has tripled in the past two years and child ID theft cases have nearly doubled in that span. There was a steady rise of child ID theft victims. In 2003, 6,512 ID theft reports were filed on behalf of victims under 18 years old. In 2004, the number jumped to 9,595. Last year, the number was 11,601.
In response, a new DVD from the Treasury Department is now available. It aims to educate consumers on how to protect their identities. The DVD recommends that consumer check their credit history. All three major credit agencies offer free annual credit reports. Consumers should not leave information lying around, includes letters in their mailboxes. Credit statements should be shredded once they are looked over. To get the DVD, call (888) 878-3256.
In all, some 685,000-consumer complaints were filed with the agency last year, with victims reporting losses of $680 million. While the number of complaints increased only 5 percent from last year, the dollar losses appear to be rising rapidly. In 2005, 49 consumers reported losing $1 million or more during 2005, the FTC said, compared with 42 in 2004. Nearly 14,000 victims said they'd lost over $5,000 to a con artist, a sharp increase from just over 11,000 in the previous year. Average losses were $2,400 per victim; median losses were $350. In 2004, the average was $1,846 and the median was $263.
According to the Federal Trade Commission's 2005 report of complaints, the top ten ranked by percentage of total complaints. Last year's percentage is in parenthesis.
There were 430,000 non-identity theft crimes reported; about half of those involved the Internet. At the top of that list is auction fraud complaints. In 2004, auction fraud made up 16 percent of all complaints, or about 100,000 reports and in 2005 compared to 12 percent, or about 82,000.
The sharp increase in wire transfer payments should be noted because consumers generally have no protection or ability to get a refund, or to cancel the transaction when they wire money using a service like Western Union. In 2005, 15 percent compared to 6 percent in 2003 with losses totaling $86 million. "For the first time since we began tracking Internet fraud, wire transfer was the No. 1 method of payment," said Susan Grant, NFIC/IFW director. "The whole reason why scam artists try to convince people to wire money to them is because it's so hard to trace and track wire transfers." Victims told the FTC they'd lost $336 million on Internet-related scams last year.
The top 10 I.D. Theft States per Capita were:
1. Arizona
2. Nevada
3. California
4. Texas
5. Colorado
6. Florida
7. New York
8. Washington
9. Oregon
10. Illinois
The FTC study indicates a modest trend toward fewer reports of credit card fraud from 28 percent of all identity theft victims, to 26 percent. Two years ago, the figure was 32 percent. There was increase unauthorized electronic funds transfers (bank-to-bank wire transfers) from 4.8 percent in 2003 to 6.6 percent in 2004 to 7.9 percent in 2005. The jump was not as significant as last year, however when electronic transfers climbed from to 6.6 percent in 2004. Identity theft victims are still having trouble getting police reports with 40 percent of victims saying they reported the incident to a police department, and one-quarter of them said a report was not taken. In addition, 61 percent of victims did not report the crime to a police department. You SHOULD report Identity theft to police because many identity theft victim rights, such as those granted to victims by the Fair and Accurate Transaction Act of 2003, require a police report. These include the ability to file some credit bureau fraud alerts and to obtain applications filled out by imposters for investigative purposes.
Identity Theft has captured the attention of state legislators who have proposed several bills this session that would stiffen penalties for identity theft, add preventive measures and re-categorize this white-collar offense from a crime against property to a crime against people. The bill also would make identity theft a strike under the state's ``three-strikes law'' and allow for the seizure of a convicted thief's property. Other proposed identity-theft-related bills, would create a program that would allow banks and financial institutions to share information with law enforcement and require police reports be given to victims of identity theft.
In order to reduce your exposure to Identity Theft, I recommend that you:
1. Provide your Social Security number
only when absolutely necessary; it's the key to your identity.
2. Shred documents containing personal information, bills, bank statements,
credit card receipts, investment updates, etc.
3. Do not carry PIN numbers, birth certificates and passports unless absolutely
necessary.
4. Don't give credit card numbers to unsolicited telemarketers.
5. Be very careful with what information you provide when filling out warranty
cards, subscription forms, prize-drawing cards and Web-site registration forms.
6. Tell companies, especially your banks and credit card companies, not to sell
your name. You might want to use the phrase: ``no third-party solicitations.''
7. Write the three major credit bureaus and ask to ``opt out'' of the
pre-approved credit lists they sell to companies. Call 1-888-567-8688. Since the
``opt-out'' option may expire after two years, remind yourself to do it again.
8. Remove your name from marketer's unsolicited mailing and calling lists. Write
to Direct Marketing Association's Mail Preference Service, P.O. Box 9008,
Farmingdale, NY 11735.
9. Review your credit card and other credit statements each month and make sure
you know exactly what you're being billed for.
10. Eliminate credit cards you rarely or never use. You must notify the
card-issuing company in writing that you are canceling the card, even if it was
never activated.
11. Contact your card issuer to find out if any of your cardholder information
can be given to partners or affiliates (third parties) of the card issuer. If
so, ask for the address to write to cancel this authorization.
12. If you believe your identity has been stolen and used by another to make
purchases you didn't authorize, you need to act quickly to minimize the damage.
13. Go to http://www.atg.wa.gov/consumer/idprivacy/IDTheftWhatToDo.shtml
if you become a victim of identity theft.
COUPON
DISTRIBUTION INCREASED 12% AND REDEMPTION INCREASED BY 19% IN THE FIRST HALF OF
2009
CPG
coupon redemption volume has increased gradually over the last four quarters by
33% as 1.575 billion coupons were redeemed in the first half of 2009. CPG coupon
redemption volume increased in all key retail segments led by mass merchandisers
(including Supercenters) (30.2%), Grocery stores (16.7%), Drug stores (15.7%)
while decreasing at Military Commissaries (8.1%) in the first half of 2009. The
average coupon redemption rate for Consumer Product Goods increased by 21.4% on
Instant on Pack coupons followed by Internet coupons (16.61%), Electronically
dispensed (10.48%), Direct mail (3.80%) and FSI’s (1.05%) for the first half
of 2009.
Source: NCH Marketing
Services, Inc., Mid-Year 2009 Coupon Facts Report
CONSUMERS
COUPON DEMAND AND USE REMAINS STRONG IN 2009 NCH’s
2009 Consumer Survey revealed
that consumer coupon use remains strong due to the current economic conditions.
The percentage of respondents who reported using coupons totaled 94% in 2009,
equaling 2008 and 5% higher than the 89% in 2007. The percentage of 2009
respondents who reported using coupons regularly also remained high.
The
percentage of consumers who reported using more coupons was 30% in 2009, 30% in
2008 and 22% in 2007.
Consumers
reported using more coupons because of a need to stretch their budgets (37.4%),
responding to increased prices for gas and food (19.5%), or they were concerned
about the economy (5%). Other consumers reported that they were using more
coupons because they liked to save money (17.6%) or because more coupons were
available to them (7.7%).
Many of
those who have increased their use of coupons as a result of their personal
economic situations expect to continue with this behavior in the future.
More than
27% of those who reported using fewer coupons in 2009 said that their decision
was directly related to the products being promoted (16%) or not promoted
(11.5%) while 9% indicated that coupons expire before they have a chance to use
them. Another 6.5% said they were using fewer coupons because they were buying
more store brands.
NCH’s
2009 Consumer Survey
revealed that current economic pressures are prompting consumer coupon
use to remain strong a an expected slow economic recovery and very high
unemployment rate.
2008 PROMOTIONAL TRENDS REPORT
Promotional spending rose by just 3.5% in 2007, to $45.81 billion, according to Veronis Suhler Stevens Communications Industry Forecast. (Their report covers P-O-P, coupons, licensing, premiums, loyalty programs, product sampling and games, contests and sweepstakes.) Only 30% of marketers expect to increase their consumer promotion budgets this year, compared with 42% in 2007 and 16% are reducing their consumer promotion budgets, which has increased from 7% the previous year. Of the total 37% was spent on consumer promotions, 32% on general advertising, 24% on trade promotions and 7% on other promotions in 2007.
CONSUMER PROMOTIONAL BUDGETS
|
2008 |
2007 |
|
|
INCREASE BUDGET |
30% |
42% |
|
STAY THE SAME |
41% |
38% |
|
DECREASE |
16% |
7% |
|
DON’T KNOW |
11% |
12% |
|
NO ANSWER |
2% |
1% |
TRADE PROMOTIONAL BUDGETS
|
2008 |
2007 |
|
|
INCREASE BUDGET |
23% |
30% |
|
STAY THE SAME |
44% |
46% |
|
DECREASE |
13% |
6% |
|
DON’T KNOW |
18% |
18% |
|
NO ANSWER |
2% |
0% |
HOW PROMOTIONAL BRANDS ARE EVALUATED
|
Brand Awareness |
54% |
|
Return on Investment |
47% |
|
Incremental Sales |
39% |
|
Response Rates |
39% |
|
Lead Generation |
37% |
|
Increased Customer Knowledge |
36% |
|
Redemption Rate |
25% |
|
Media Impressions |
21% |
|
Retention Rates |
13% |
|
Trade Sell-in |
9% |
|
Other |
5% |
HOW MARKETERS BASED ROI
|
INDIVIDUAL CAMPAIGN RESPONSE |
49% |
|
TOTAL CAMPAIGN VALUE |
34% |
|
PROFIT |
31% |
|
TOTAL CUSTOMER VALUE |
21% |
|
TOP-LINE REVENUE |
18% |
|
OTHER |
6% |
WHAT DETERMINES AGENCY REVIEWS
|
CREATIVE WORK |
52% |
|
PRICE |
48% |
|
SERVICE |
36% |
|
CLIENT RELATIONSHIPS |
35% |
|
STRATEGIC WORK |
27% |
|
PREVIOUS RELATIONSHIP |
26% |
|
CATEGORY-SPECIFIC PERFORMANCE |
23% |
|
CREDENTIALS |
22% |
|
TIME TO MARKET |
9% |
According to the DMA’s Power of Direct Marketing 2007-2008 report, spending on non-catalog direct mail is set to reach $36.4 billion globally in 2008, up 5.6% from the $34.5 billion spent in the channel last year. That makes direct mail the second highest item in the marketing budget, behind only telemarketing, on which $47 billion will be spent this year. By 2012, the DMA forecasts, non-catalog direct mail spending will reach $44.5 billion for a compound annual growth rate 2007-2012 of 5.2%. The study found that direct mail produces a lower return on investment (ROI) than other media: in 2008, $15.60 for every dollar spent, according to the DMA. That comes in below this year’s anticipated ROI of $45.65 for commercial e-mail and $20.19 for non-e-mail Internet marketing.
Marketers really like e-mail, as about 840 billion messages will hit inboxes by 2013, compared to 418 billion this year. The boom can be attributed to e-mail’s low cost and high return. Spending on e-mail is expected to reach $4 billion by 2012, compared to $3.1 billion in 2008, according to Forrester Research. Companies whose customers have opted in to receive marketing messages are likely to spend 138% more than non opt-in customers, says Jeanniey Mullen, the founder of the Direct Marketing Association’s E-mail Experience Council. These customers also purchase products 25% faster when notified through e-mail about specials, discounts, new products and services. Response rates vary significantly based on the type of e-mail. The costs to send e-mail are dropping as marketers push service providers for volume discounts and the return-on-investment remains strong. Companies average a $48 return for every $1 spent, Mullen says. E-mail budgets are increasing, but not at a significant pace—about 25% to 30% year over year for the last five years.
WHO SENDS E-MAILS
|
(In Billions) |
2008 |
2013 |
|
CONSUMER PRODUCTS |
7 |
13 |
|
FINANCIAL SERVICES |
5 |
14 |
|
MEDIA & ENTERTAINMENT |
9 |
18 |
|
MANUFACTURING (HIGH-TECH) |
11 |
21 |
|
BUSINESS SERVICES |
13 |
32 |
|
RETAIL & WHOLESALE TRADE |
158 |
258 |
|
TRAVEL AND HOSPITALITY |
216 |
482 |
Source Forrester Research, Inc.
Consumer packaged goods marketers issued 302 billion coupons in 2007, an impressive 6% increase over 2006, or a whopping 16 billion more coupons. They also fine-tuned the mix, reducing the number of offers by more than 8% while increasing the circulation of those offers by nearly 5%. The value of the coupons totaled about $387 billion, a big jump compared to the $337 billion in 2006. Making coupons even more attractive, the average value of an offer increased 10 cents, to $1.28, outpacing the price increases of food for the first time. Consumers turned in $2.8 billion of the total $387 billion in available coupon value, or $8.57 per person. That added up to 2.6 billion coupons redeemed in 2007, or 2.6%, the first time since 1992 that redemption did not decline. Internet coupons redeemed at 1.82%.
NCH Marketing, a promotional marketing services company, also reported an increase, albeit a smaller one. It reported that of the overall 285 billion consumer packaged goods coupons offered, the share of grocery coupons distributed grew to 66.8%, or 190 billion, in 2007, from 63.9% in 2006. On the other hand, coupons for health and beauty products dipped to 33.2%, or 94.8 billion coupons, from 36.1% in 2006, NCH found. Free-standing inserts continue to lead the way marketers distribute coupons (88.1%), followed by handouts (4.7%), direct mail (2.2%), magazines (2.1%), newspapers (1.2%), in/on-pack (1.2%), Internet (0.4%) and military (0.1%)..Eight-nine percent of consumers surveyed said they use the coupons, with 64% using them with "some regularity." NCH also found that for the first time in over a decade, redemption had not declined but remained flat with last year at 2.6%. Marketers cut the average redemption time down from 2.9 months to 2.5 months in a bid to suppress redemption’s and cut costs.
Event marketing is hitting a high note in these low economic times by enabling marketers to stage effective, efficient promotions as an alternative to pricier media messages. Stevenson Communications Industry Forecast, growing 12.2% to $19.18 billion, up from $17.1 billion the year before. Companies will drop about $1.86 billion on games, contests and sweepstakes this year, about flat with $1.83 billion in 2006, a trend that has continued over the last five years, according to the Veronis Suhler Stevenson Communications Industry Forecast.
GAMES, CONTESTS AND SWEEPSTAKES SPENDING
|
2002 |
$1.796 BILLION |
|
2005 |
$1.804 BILLION |
|
2008 |
$1.854 BILLION |
Retail sales of licensed products in North America remained flat at an estimated $107.8 billion in 2007, from $107.4 billion in 2006, the result of soft economic conditions, according to the International Licensing Industry Merchandisers’ Association (LIMA). Royalties also remained about flat, slipping 0.8% to $5.98 billion last year after three consecutive years of growth. Trademarks and brands, the second largest licensing category, dropped 2.7% last year, to an estimated $19 billion in retail sales, and rang up $1.09 billion in royalties. Sports followed at about $14.7 billion, bringing in $815 million in royalties. Despite a 1.2% dip from 2006, the category remains healthy, Brochstein says.Fashion generated about $14.6 billion in sales, while royalties dipped by 2.4%, to $810 million. Overall spending on promotions tied to loyalty programs showed modest growth last year—approximately $2.1 billion, a 3.6% rise over the $2 billion spent in the previous year, according to the Veronis Suhler Stevenson Communications Industry Forecast.
LOYALTY PROMOTION SPENDING
|
YEAR |
2003 |
2004 |
2005 |
2006 |
2007 |
|
SPENDING (IN MILLIONS) |
$1,902 |
$1,991 |
$2,010 |
$2,060 |
$2,134 |
|
GROWTH |
2.2% |
4.7% |
1.0% |
2.5% |
3.6% |
According to estimates from marketing research firm eMarketer, total U.S. mobile advertising spending will reach $1.7 billion this year, up from $878 million in 2007, and should hit $6.5 billion by 2012. Sales of promotional products jumped 3.5%, to $19.4 billion, in 2007, a new record, the association says. Apparel is the top category at 30.7%, followed by writing instruments (10.3%), bags (7%), drink ware (6.3%) and desk/office/business accessories (6.1%). Nearly half of the respondents to Promo’s 2008 Premiums and Incentives Survey said they hand out premiums at events or on tours. And premiums appear to deliver better ROI (55%) compared to ad specialties (15%), the survey found.
Paid product placement was a particularly bright spot last year, as spending grew 33.7% to the $2.9 billion mark, from $2.2 billion in 2006, even though it was the slowest rate of growth since 2003, according to the Veronis Suhler Stevenson Communications Industry Forecast. Most of that growth was on television, 71.6%, because of the frequency, exposure and reach that TV series offer. Films took 25% of the spending. Other media, such as newspapers, magazines, videogames, the Internet, books, recorded music and radio, made up the other 3.4%, the report found.
P-O-P is also playing a bigger role. Marketers increased spending on PO-P by 5.2% last year, to $20.3 billion, making it the largest consumer promotions category, according to the Veronis Suhler Stevenson Communications Industry Forecast. P-O-P was the biggest expense for 8.6% of marketers last year, according to Promo’s 2008 Marketer Trends Study. Some 73% of consumer packaged goods manufacturers and 86% of retailers ranked shopper marketing programs among the top-four activities that deliver meaningful ROI, according to a recent study by Deloitte Consulting LLP.
According to the Veronis Suhler Stevenson Communications Industry Forecast, marketers will spend almost $2.3 billion on product sampling in 2008, an increase of about 5% over the $2.15 billion spent in the same channel last year.
NCH REPORTS 285 BILLION COUPONS DISTRIBUTED IN 2007
U.S. consumer packaged goods manufacturers once again increased the total number of coupons offered to consumers. Distribution volume grew by six billion or 2.2 percent in 2007 to 285 billion. This growth was attributed to an increase in coupons issued for Grocery products. The share of Free Standing Inserts (FSIs), Direct Mail, Magazine and Internet media grew in 2007. FSIs now account for 88 percent of all coupons distributed. The share of coupons issued via Handouts declined by 1.1 percentage points.
In addition to offering more coupons, CPG companies have continued to increase the average value of coupons. The average face value distributed across all U.S. CPG companies increased by $.05 in 2007. Although marketers are making more coupons available with higher face values, they are continuing to increase their use of tactics that suppress redemption. The overall use of multiple purchase requirement coupons remains high (up one percentage point to 27 percent of all coupons distributed). Further, the monthly duration trend has reached two and a half months versus the previously popular three month duration.
Despite the increased use of such tactics, redemption volume did not go down in 2007. In fact, for the first time since 1992, total CPG redemption volume remained flat compared to the prior year. The Grocery segment saw a six percent growth in redemption volume from that segment’s increased promotional activity. This change may also be explained, in part, by broader economic factors, such as rising energy and food prices, a shaky housing market and slower economic growth. As consumers feel the impact of these changes, they may increasingly look for opportunities to save money, including coupons.
In 2007, 89 percent of the participants in NCH’s annual Consumer Survey indicated they use coupons at supermarkets. They use coupons to plan their shopping lists (86 percent), choose the brands they will buy (92 percent) and try new brands (94 percent). Engaged consumers continue to seek more coupons when making product purchases. For more detailed information, go to www.nchmarketing.com or you can click here.
FSI COUPONS OFFER $320 BILLION IN INCENTIVES IN 2007
The Marx Promotion Intelligence 2007 FSI Distribution Trends Report reports that more than 197 billion pages containing 257 billion offers totaling more than $320 billion in consumer incentives were made available through free standing insert (FSI) coupons in Sunday newspapers during 2007. Consumer Packaged Goods (CPG) activity dominated these trends accounting for 69.0 percent of total FSI pages, followed by Direct Response with 22.0 percent and Franchise at 9.1 percent. CPG activity is up 1.2 percent versus 2006, along with Franchise, which also increased 2.7 percent. However, Direct Response decreased 8.8 percent versus 2006, which is the first decline in activity for this industry since 2003.
The average coupon value increased to a record $1.26, up seven cents from 2006. Marketers continue to leverage FSIs as a cost-effective advertising medium to deliver consumer impressions and to create purchase intent for their brands," said Mark Nesbitt, COO, Marx Promotion Intelligence. Additionally, "many retailers align quality merchandising support with these FSI promotions to improve overall promotion effectiveness and to increase incremental sales.
|
Key Measures |
2007 |
Change vs. 2006 |
|
Coupons: |
257.0 billion |
1.5% |
|
Pages |
197.6 billion |
-1.0% |
|
Average Face Value |
$1.26 |
6.4% |
|
Fuse (weeks) |
9.8 |
-0.6% |
Source: Marx Promotion Intelligence 2007
FSIs continue to be a source of news about product categories to the consumer and to be a driver of category trips for the retailer." FSIs maintained consistent frequency with activity in 48 out of the 52 Sundays in 2007. This compares to activity in 49 out of the 53 Sundays in 2006. In 2007, the post-New Year’s promotion week of January 7 had the greatest combined weight by delivering a total of 147 pages. The pre-Thanksgiving week of November 4 was also heavily weighted with 133 pages of FSI promotions. On average, FSIs reach almost 70 million households on a weekly basis, with household reach varying across national, regional, and local brands. The dynamics among the three key principles of frequency, weight, and reach, provide important insight into category, competitor, and brand strategies. Over 440 New Product Introductions Received FSI Support in 2007 This level of activity reinforces how manufacturers are continuing to integrate FSI coupons as part of their new product introductions.
CPG INDUSTRY FSI ACTIVITY
|
2007 |
Coupons |
% Change |
Average |
% Change |
Average Expiration |
% Change |
|
Total CPG |
257,046 |
1.5 |
$1.26 |
6.4% |
9.8 weeks |
-0.6% |
|
Non-Food |
152263 |
3.9 |
$1.54 |
5.8% |
9.3 weeks |
-1.0% |
|
Food |
105041 |
-1,8 |
$0.87 |
5.1% |
10.6 weeks |
-0.2% |
Source: Marx Promotion Intelligence 2007
Consumer Packaged Goods accounted for 69% of total FSIs, followed by direct response at 22% and franchise at 9.1%, the report said. The face value of non-food FSIs rose by 5.8% to $1.54 and by 5.1% to 87 cents for foot categories. Within the CPG industry, the Non-Food segment had a 3.9 percent increase in coupon circulation while the Food segment pulled back 1.8 percent. Record levels were set for Average Face Value within both the Non-Food and Food segments with a 5.8 percent increase to $1.54 for the Non-Food segment and a 5.1 percent increase to $0.87 for the Food segment. These trends indicate that manufacturers are continuing to leverage FSIs, but are increasingly using them to deliver high-value offers that encourage brand trial and generate category excitement.
Household cleaning products led overall FSI activity and was the top category in new product introductions. Snacks ranked second and was the No. 1 food category. Other categories in the top 10 list include pet food and treats, cough, cold, allergy, and sinus care, hair care, vitamins and bar/liquid soap. The top 10 categories accounted for 32.4% of all coupons distributed across the CPG industry.
The ranking of the top 10 manufacturers changed slightly in 2007. Procter & Gamble held the top spot for dropping FSIs, followed by General Mills and SC Johnson & Sons Inc. Reckitt Benckiser PLC rose two spots while Unilever dropped to sixth from fourth in 2006, the report said. L’Oreal rounded out the top 10 list from the 11th spot last year.
TOP 10 CATEGORIES FOR NEW PRODUCT ACTIVITY
|
Coupons Dropped (MM) |
|||||
|
|
|
|
|
Percentage Change |
Actual Change |
|
1 |
Household Cleaning Products |
13,281 |
12,426 |
6.9% |
855 |
|
2 |
Pet Food and Treats |
12,744 |
12,295 |
3.7% |
450 |
|
3 |
Combination/Personal |
10,978 |
10,452 |
4.9% |
516 |
|
4 |
Rug/Room Deodorizer |
10,471 |
10,787 |
-2.9% |
-316 |
|
5 |
Snacks |
8,407 |
7,247 |
16.0% |
1,160 |
|
6 |
Cough Cold Sinus Allergy (CCSA) |
7,569 |
6,619 |
14.3% |
949 |
|
7 |
Hair Care |
7,213 |
6,186 |
16.6% |
1,028 |
|
8 |
Vitamins |
7,180 |
6,123 |
17.3% |
1,057 |
|
9 |
Other Packaged Goods |
5,682 |
5,693 |
-0.2% |
-11 |
|
10 |
Bar/Liquid Soap |
5,413 |
4,162 |
30.1% |
1,252 |
Source: Marx Promotion Intelligence 2007
FSI coupon support was included as part of 441 new product introductions across the CPG industry in 2007, as tracked by Marx Promotion Intelligence. Food categories contributed 312 of these new items led by Cereals, Beverages and Snacks. Non-Food categories contributed an additional 129 new items led by Household Cleaning Products and Home Paper/Plastic.
Three of the top 10 categories for new product introductions were also among the top 10 categories for overall FSI activity in 2007. Household Cleaning Products led all categories in overall FSI coupon activity and ranked number one in new product introductions among Non-Food categories for the second year in a row. Snacks ranked second across all categories for new product introductions and were the top-ranked Food category for overall FSI activity. The top 10 categories accounted for 32.4 percent of all coupons distributed across the CPG industry.
Rank Category # New Products
|
|
|
# New Products |
|
1 |
Cereals |
39 |
|
2 |
Beverages |
25 |
|
3 |
Snacks |
20 |
|
4 |
Milk/Milk Products |
18 |
|
5 (Tie) |
Household Cleaning Products |
17 |
|
5 (Tie) |
Meat/Refrigerated |
17 |
|
7 |
Prepared Food/Frozen |
12 |
|
8 (Tie) |
Pet Food & Treats |
11 |
|
8 (Tie) |
Juices |
11 |
|
10 |
Home Paper/Plastic |
10 |
|
Source: Marx Promotion Intelligence 2007 |
||
The top ten manufacturers by coupon distribution were lead by Procter & Gamble which retained the top position. Reckitt Benckiser PLC moved up two spots while Unilever dropped down to the sixth position. Kraft foods also moved up two spots along with L’Oreal which broke into the top 10 in 2007.
TOP 10 MANUFACTURERS (by Coupons Dropped)
|
|
Rank 2007 |
Rank 2006 |
|
Procter & Gamble |
1 |
1 |
|
General Mills |
2 |
2 |
|
SC Johnson & Sons |
3 |
3 |
|
Reckitt Benckiser PLC |
4 |
6 |
|
Johnson & Johnson |
5 |
5 |
|
Unilever |
6 |
4 |
|
Nestle SA |
7 |
7 |
|
Kraft Foods |
8 |
8 |
|
Kimberly-Clark Corp |
9 |
9 |
|
L’Oreal SA |
10 |
11 |
Source: Marx Promotion Intelligence 2007
IDENTITY
THEFT CLAIMED SEVEN MILLION VICTIMS
Until
recently, identity theft seemed to be regarded by police and many financial
institutions almost as a victimless crime. Identity theft (the fraudulent use of
your name and identifying data by someone else to obtain credit, merchandise, or
services) claimed seven million victims in the U.S. last year, according to a
recent survey by Privacy & American Business, ten times as high as past
estimates. The Federal Trade Commission reported that 9.9 million people were
victims in 2002 costing them $5 billion and businesses and financial
institutions $8 billion and 27 million victims since 1998. The United States is
not alone as Canada, Japan, and the United Kingdom are also reporting wide
spreading ID-theft. Overall,
more than 33 million Americans, about 1 in 6 adults, say they have had their
identities used by someone else sometime since 1990 and the Department of
Justice says ID theft is the nation’s fastest-growing financial crime.
Victims typically lose $800 and spend two years clearing their name. The FTC
received 161,619 complaints about identity theft; double that of the previous
year. Credit card fraud was the most common form of identity fraud accounting
for 42 percent of the complaints followed by phone fraud at 22 percent and bank
fraud at 17 percent. On average, thieves collected $10,200 worth of goods, money
or services when opening a fraudulent account.
|
The
10 highest rates of ID theft (numbers are per 100,000 population) occur
in: |
||
|
|
Washington,
D.C. |
123 |
|
|
California |
91 |
|
|
Arizona |
88 |
|
|
Nevada |
85 |
|
|
Texas |
69 |
|
|
Florida |
68 |
|
|
New
York |
67 |
|
|
Washington |
66 |
|
|
Maryland |
66 |
|
|
Oregon |
64 |
|
Source:
Federal Trade Commission, based on more than 140,000 complaints last year
to its Identity Theft Data Clearinghouse. |
||
Identity
fraud has become a major element in crimes ranging from international drug
trafficking to terrorism; Al Qaeda operatives in Spain used stolen credit and
telephone cards and false passports and travel documents to open bank accounts
and pay for travel and communication abroad, an FBI agent testified before a
congressional subcommittee last year.
Many
victims don’t learn of the crime for a year or more, only after something goes
terribly wrong, because thieves often shield their actions by using a different
address when they open new accounts in the victim’s name. Typically, federal
laws cap monetary losses to consumers, but even in routine cases, it takes
victims two years on average to clear their names, according to the Privacy
Rights Clearinghouse, a nonprofit advocacy group. The $4.2 billion that
businesses will lose this year to the crime, a figure expected to mushroom to
more than $8 billion by 2006, they recoup by charging you higher fees and
prices. The current cost to business is $18,000 per incident, the FTC says. The
largest single source of ID theft is “the corrupt individual on the inside,”
says privacy expert Alan Westin, president and publisher of Privacy &
American Business.
Identity
theft is a problem largely because financial institutions, merchants, credit
bureaus, and the government do not adequately safeguard vast databases and other
records containing consumers’ sensitive information, making it relatively easy
for thieves to access these data. Many institutions use Social Security numbers
when other identifiers would suffice, fail to notify consumers when security
breaches occur, and provide little help or recourse for consumers stuck cleaning
up the mess. ID
theft usually occurs not because of the carelessness of the individual consumer,
but because of the carelessness or vulnerability of the organizations they deal
with, including the government.
All
that ID thieves really need to open credit or bank accounts under your name or
to drain your existing accounts are three pieces of information: your full name,
Social Security number, and date of birth. They can get by with less when
financial institutions fail to check identifying information. The following are
ways in which thieves can get information about you:
|
Stealing company
data. Millions of
identities can be stolen at one time when hackers or insiders break into
company databases or |
|
Pretexting. E-mail
spammers, telemarketers, and even some clerks and salespeople use a false
pretense to lure you into revealing personal information. Twice this year,
New York City police arrested the same 18-year-old on different versions of
this scam. Police say that first, the teenager sent “spoofed” e-mail to
AOL account users. Claiming to represent AOL, he requested personal
information, including credit-card numbers, to “update” accounts. When
AOL users complied, police say he charged more than $10,000 in merchandise.
In the other case, police say he used stolen identities to buy $30,000 worth
of electronics, which he sold on a spoofed amazon.com Web site. |
|
Dumpster diving.
Criminals dig
through trash for bills, medical statements, or other papers that can be
used to obtain credit or access to your accounts. |
|
Mail theft. Individuals
and organized rings steal mail from unlocked mailboxes, trying to find
letters containing personal information, preapproved credit offers, and
checks. |
|
Account takeover.
Thieves use stolen
or fake IDs to take over existing bank or credit accounts. They escape
detection by forwarding mail to private mailboxes or new addresses.
A recent case
involved 17 conspirators, including lawyers and an unlicensed real estate
agent. They were indicted in Queens County, New York, in connection with a
$1 million mortgage fraud ring that victimized individuals whose houses were
literally sold or refinanced out from under them. Imposters used fake IDs,
including driver’s licenses, to pose as the homeowners at staged closings
to steal money from mortgage lenders. |
|
Skimming. Thieves use
handheld magnetic card readers that can be bought on the Internet or
improvised to obtain personal information off the magnetic strip on credit
and debit cards. Sometimes the data is transferred to other magnetic strips
to make counterfeit credit cards. The culprits have included waiters, gas
station attendants, and store clerks paid by organized-crime rings. Some
private automatic-teller machines also have been rigged to skim account
numbers and PINs. |
|
Raiding your old
computer. According to
a recent study, MIT graduate students were able to recover sensitive files
from hard drives on one-third to half of the used computers they tested.
Last year, 150 million computers were discarded, the study found. |
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
We
believe that financial institutions and other businesses should use encryption
and better systems to prevent and detect computer hackers and to control access
by insiders. Don’t use e-mail to send your Social Security number or other
personal data. If you must, make sure that you use a secure Internet connection
by checking your browser window for a secure-connection icon. We recommend
against giving personal information to someone who has called or e-mailed you
unsolicited. At least, independently confirm the legitimacy of the request by
phoning or e-mailing the company. Systems that monitor an organization’s
connections to the Internet and that prevent and detect hacking are a must to
deter ID thieves and virus attacks.
Shred
papers containing personal information and preapproved credit offers before
discarding them. Businesses and governments also need to do a better job of
disposing of old files. Only California, Georgia, Washington, and Wisconsin have
laws requiring businesses to shred files.
Homeowners and
landlords can help prevent mail theft by replacing regular mailboxes with locked
boxes. Businesses and individuals should use hard-drive shredding software or
remove and destroy hard drives before discarding a personal computer.
Visa
and MasterCard now require merchants and big banks that issue their branded
cards to use secure Internet technology. They’re using new identity
verification and authentication systems for controlling transactions among
customers, merchants, and banks. In addition, both now require member banks and
merchants to encrypt personal data stored on their servers.
Stricter laws with stiff sentences must be passed. California leads other states and the federal government with its identity-theft laws. More than 20 bills concerning identity theft are pending in Congress. Many consumer-rights, privacy-rights, and law-enforcement advocates say they want to see other states copy the laws, which do the following:
| Require that consumers be notified of security breaches that could compromise their personal data, including Social Security numbers. |
| Entitle fraud victims to a free credit report every month for a year after they notify credit-reporting agencies that they have been victims of fraud. |
| Require individuals requesting birth or death records to provide proof of identity and to sign a form indicating the reason for the request. |
| Allow customers to freeze their credit reports if they have been victims of fraud. This requires credit-reporting agencies to get permission from consumers before disseminating their credit reports to lenders. Also, state law requires credit issuers to honor fraud alerts on files and to deny new credit requests until the consumer is notified. |
| Limit the use of Social Security numbers. |
Article Update
The Fair Credit Reporting Act was signed into law by President Bush, affects an range of consumer activities from getting credit reports to what information can be gathered by investigators who do background checks on prospective employees. The main complaint is that the Fair and Accurate Credit Transactions Act specifically pre-empts some tougher state laws, such as those passed in California in recent years. If you are from a state where there are no protections from identity theft, the federal law is good news, but if you are from California, where there are a lot of protections from identity theft, it's not good news.
The federal reform
bill attempts to prevent identity theft by allowing consumers to report credit
fraud with one call. The three major credit reporting companies (Equifax Inc.,
Experian Information Solutions Inc. and TransUnion LLC) will be required to
communicate with one another so that a consumer has to call only one of the
firms to get the fraud-reporting process started and create a posting to that
effect in all credit files. It also requires that fraud alerts be maintained on
a consumer's files for no fewer than 90 days, unless the consumer requests
otherwise and establishes an "extended fraud alert" that can last for
as long as seven years at the consumer's request. It entitles consumers who have
been victimized by credit fraud to two free copies of their credit report during
the year the theft occurs so they can ensure that the fraud alert has been
listed and can check for any new incidents of fraud. The Act also requires
credit grantors such as credit card companies and banks to verify the consumer's
identity by either calling the person or taking other "reasonable
steps" before issuing new credit, if the consumer's file is flagged with a
fraud alert and blocks credit reporting firms from distributing adverse credit
information that resulted from a case of identity theft.
In most states, credit data can be used to set insurance rates. The reform bill
lets that practice continue, but it mandates a study to determine the effect of
using credit scores on the availability and affordability of insurance. The bill
restricts the dissemination of medical information without the patient's
permission. Employers wanting a prospective employee's credit information
generally must get the applicant's permission to obtain a credit file. That has
been interpreted to mean that an employee or job applicant can't be investigated
for any wrongdoing without their permission. The bill exempts certain employee
investigations from the prior-approval requirement, including those that involve
employee misconduct and violations of state or federal laws. However, if adverse
actions are taken based on the investigation, the worker is entitled to a
summary of the findings.
The bill also entitles all consumers to one free copy of their credit report
each year and information about their credit scores and an explanation of what
the scores mean. It gives consumers the right to opt out of prescreened
marketing lists, bars retailers from printing more than the last five digits of
a credit card number on a receipt provided to the cardholder and allows
consumers to demand that credit reporting companies truncate the consumer's
Social Security number in credit files.
RECOMMENDATIONS
TO REDUCE YOUR EXPOSURE TO IDENTITY THEFT
We recommend that to reduce your exposure to identity theft that you do the following:
If you become a victim, immediately report the crime. Filing a report with your local police and keeping a copy yourself will make it easier to prove your case to creditors and merchants and may help you build a lawsuit if you have to sue to recover losses or clear your name later. In some states, you may have to report the incident in the jurisdiction where the fraud occurred, such as the location of the store where the thief charged merchandise to your account, even if that is not where you live.
File a complaint. The Federal Trade Commission (877-ID-THEFT) investigates interstate and Internet fraud. Download a copy of an ID theft affidavit from the FTC’s Web site at www.consumer.gov/idtheft to help you notify merchants, financial institutions and credit bureaus. For fraud involving stolen mail, also file a complaint with postal officials at www.usps.com/postalinspectors/fraud/MailFraudComplaint.htm.
Alert credit-reporting agencies.
Use the FTC ID-theft affidavit mentioned above to help you do this. Call
TransUnion, 800-680-7289; Experian, 888-EXPERIAN; and Equifax, 800-525-6285, to
get addresses and instructions. Ask to have your account flagged with a fraud
alert, which asks merchants not to grant new credit without your explicit
approval. Keep copies of all your correspondence.
Notify banks, creditors, and utilities. Close
accounts that have been used by thieves. Choose new passwords and PINs for all
your accounts and don’t use your mother’s maiden name as a password. Notify
merchants that issued credit or accepted bad checks in your name; use your
police report or FTC affidavit as backup.
Order your credit report each
year. Get credit reports from all three credit bureaus, and study them closely.
Some victims say that it took years to clear their credit files and that new
credit was sometimes granted in their names without their permission even after
fraud alerts were placed on their accounts.
Seek other help. To share your views about identity theft with your state or federal legislators, visit Consumers Union’s public-policy Web site at www.consumersunion.org. For other information, check out the nonprofit Identity Theft Resource Center at www.idtheftcenter.org and the Privacy Rights Clearinghouse at www.privacyrights.org.
FIFTEEN
RECOMMENDATIONS TO PROTECT AGAINST IDENTITY AND CREDIT CARD THEFT
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In
2002, there were approximately 500,000 identity theft victims costing banks
and credit card companies about $5 billion because they ultimately pick up
the tab. The average victims will spend $1,374 and 175 hours cleaning up
their |
The
Internet is replacing more traditional methods of scamming individuals,
including the phone and mail. Of the complaints that weren't related to ID
theft, half had some connection with the Internet. Consumers were contacted
online, responded to Web ads or made a questionable transaction entirely on the
Internet. Of the consumers who complained about fraud, only 23% were contacted
by phone. Nearly 20% of suspected frauds were done through bank debits,
according to the Federal Trade Commission.
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It
has been reported that 700,000 people were victims of identity theft in the
United States in 2002 based on Federal Trade Commission figures.
A new survey by Gartner indicates that as many as 7 million Americans
feel that they have been subjected to some form of identity theft.
Recently,
the country’s top 100 financial institutions have approved a “uniform
affidavit,” a single report that banks and credit card companies would accept
from identity theft victims rather than require multiple statements.
Credit
card companies don not bear all the costs of the fraud. When a credit card is
obtained through identity theft is used to buy products, the retailer that sold
the goods often takes all the loses in addition to a $10 to $100 transaction
fee, despite the fact that the credit card issuer sent out the card and provided
authorization codes for approved purchases.
The
non-profit Identity Theft Resource Center indicated that Capital Bank, Citibank
and Chase are taking proactive steps by contacting credit rating firms to verify
the identity of the person seeking credit.
HOW
TO REDUCE YOUR EXPOSURE TO CREDIT CARD THEFT
Criminals steal credit card information
from consumers' bills, report new addresses, and request additional cards. They
also obtain personal data through crooked Internet information brokers whose
sources are voter registration rolls, tax records, public filings, and sometimes
"credit header" information. Criminals also steal information from
discarded computer hard drives and hack business sites to steal credit card
information.
Credit Card Companies and Credit
Agencies Should:
| Perform
more secondary identity confirmation steps and mail follow-up letters to
consumers who have requested credit cards to make sure they received the
cards. |
| Eliminate
pre-approved credit mailings. |
| Use
an issuers' clearinghouse when processing applications for credit cards. |
| Issue
tighter fraud alerts at credit agencies. |
| Improve
communication among credit agencies and give them easier ways to report
identity theft. |
| Notify
consumers if creditors receive change-of-address requests or requests for
additional cards regarding the customers' accounts at other addresses. |
| Include
photographs on all credit cards to prevent fraudulent use. |
| Upon
request, provide consumers with one free credit report per year. |
| Develop
better ways to verify the identities of consumers before issuing new credit
cards or duplicate cards to new addresses. |
| Stop
sharing consumers' personal financial information with affiliated companies
or selling it to unaffiliated third parties unless affirmative consent is
obtained up-front (opt-in). |
| Ensure
that credit card processing at restaurants and retail establishments
generates transaction receipts that omit the full credit card number used
for the transactions. |
| Provide
ready and inexpensive access to credit information. Current federal law
permits the consumer to obtain credit record information for $8.50 per year. |
| Continually
monitor various life cycles of credit accounts at consumer stores to
identify unusual activity. |
| Sales
and refund reports, which track all cash register transactions, show suspect
patterns of repeat unmatched high-dollar store credit activity issued on
transactions without original sale receipts. (Even though point-of-sale
programs capture all transactions, they don't necessarily have the ability
to separate and identify suspect transaction activity as effectively as
exception-based reporting programs.) |
Consumers
must:
| Never
provide personal information (credit card number, driver's license number,
SSN, birth date, mother's maiden name) over the phone unless you've
initiated the call and know to whom you are speaking. |
| Don't
allow sales clerks to copy credit card numbers on checks for additional
information or to use credit cards as identification. |
| Avoid
giving credit card numbers over the phone if in a public place. |
| Use
a credit card instead of a debit card; debit cards don't have maximum
liability for fraudulent use. |
| Sign
credit cards in permanent ink as soon as they're obtained. |
| Individuals
create Web pages and pose as legitimate businesses only to use the site with
the intent of acquiring individuals' credit card numbers and other personal
information. |
| Keep
a list or photocopy of all of your credit accounts and bank accounts in a
secure place, such as a safe, lock box, or locked file cabinet. |
| When
purchasing items with a credit card, always keep credit card receipts. Never
toss them in a wastebasket. |
| Don't
speak or press credit card or bank account numbers over a wireless or
cordless phone unless it's equipped with encryption technology. |
| Cut
up, shred, or otherwise destroy pre-approved credit offers that you don't
intend to accept before putting them in your trash or recycling bin. |
| Register
credit cards with a credit card protection agency, and then place that
agency's stickers on the cards. |
| Check
credit card statements and immediately report unauthorized purchases. |
| Contact
the issuer if a new or renewed credit card doesn't arrive. |
Victims of identity theft will be able to alert banks, credit card companies and law enforcement with one phone call under a pilot program called the Identity Theft Assistance Center. The Financial Services Roundtable, which represent 100 institutions handling about 70 percent of financial transactions created the center, which will be handled by Wells Fargo and Company. The program will begin on May 1st and involve the financial industry groups 100 members, including credit card companies.
Legislation before the Senate would allow consumers to receive free copies of their credit reports annually, place frauds alerts in their credit reports and call one credit bureau and have the information shared with all of them.
HOW TO
PROTECT YOUR CREDIT CARDS FROM IDENTIFICATION THEFT
All a person needs is
your name, address, SSN (Social Security number), and sometimes your date of
birth and mother’s maiden name, and he can open an account in your name or
even access existing accounts. In some cases, when a thief opens accounts using
bogus addresses, the major credit reporting bureaus switch your contact
information over to the new address, so you may not even know what’s happening
until it is too late. Criminals are
getting more sophisticated and are utilizing several methods to steal your
identity such as:
Skimming
- The criminal scans and records the information on your credit
card's magnetic stripe using a small electronic device about the size of a
pager. Criminally minded retail employees swipe customers' credit cards twice,
once through the merchant's point-of-sale device, and once through their
skimming device. Skimming devices have often been used in restaurants and bars,
where credit cards are briefly out of a customer's sight.
This
is a difficult crime to prevent, however setting up an online credit card
account that lets you monitor purchases made with your card. If you see an
unauthorized purchase, you can close the account before further damage is done.
Fictitious
Web Sites - Computer-savvy identity thieves have created Internet
sites that closely resemble legitimate retail sites. Shoppers, believing they're
ordering goods from a retailer, unwittingly provide their credit card numbers to
the criminals who run the site. Some criminals have created fraudulent sites
that claim to be affiliates of a big retailer, offering big discounts. All
legitimate sites should provide a phone number and address for the company and
always check out a site's security features before you enter your credit card
number. They also send email messages that appear to come from a bank, a
gift award center, the government, or another official-sounding source,
requesting a person’s Social Security number for “verification” or other
imaginary purposes. Some fabricated email messages even threaten the recipient
with an electronic IRS audit.
Aside from giving identity thieves wider access to potential victims, the Internet helps criminals in ways you wouldn’t expect. The Internet also makes it much easier for them to apply for credit cards and other accounts in their victims’ names. The volume of information you can collect about people by doing simple Internet searches is frightening. Type a name and ZIP code into any of the online white pages and you can get addresses and phone numbers for millions of people. If you have only a phone number, you can do a reverse number lookup to get a person’s basic information.
Viruses
- Identity thieves have created computer viruses designed to steal
credit card numbers or personal identification numbers from your computer. Some
of these viruses arrive in e-mails purporting to offer a computer game.
Virus-protection programs can offer some protection against these scams, but
they must be updated frequently. If you use a high-speed connection, install a
firewall program. Don't download files or click hyperlinks sent by strangers.
Personal
Checks - If you go to the grocery store and write a check for $60,
the check has your full name and address, maybe your phone number. It also has
the full name and address of the bank where the check is drawn and your account
number. The clerk may ask for your
driver's license number, which in 19 states is your Social Security number. They
write your Social Security number on the face of the check, and then they ask
for a date of birth and a work phone number. Now they can call and find out
where you're employed. Hundreds of people can see this check including people at
the grocery store, the check-clearing house and the payee bank.
Criminals
then call your credit card issuer and, pretending to be you, change the mailing
address on your credit card account, runs up charges on your account and because
your bills are being sent to the new address, you may not immediately realize
there's a problem. They may open a new credit card account, using your name,
date of birth, and Social Security number. When they use the credit card and
don’t pay the bills, the delinquent account is reported on your credit report.
They open a bank account in your name and write bad checks on that account or
establish cellular phone service in your name.
Employment Records -
Employment records also are a source for identity theft. Anybody who has access to employment files can turn you into a victim. Thieves who use the information to steal workers’ identities are instead taking personnel records and other employment data that should be safely filed in company offices or computers. Information from personnel records is being used to establish credit card accounts.Employees
who get company credit cards have had their information stolen by employees of
the vendors that provide the cards. The
major cause of identity fraud is now theft of records from employers or other
businesses that have records on many individuals, according to a 2002 report by
credit information provider Trans Union. And about 90% of business record thefts
involve payroll or employment records, while only about 10% are customer lists
according to the FTC.
There's
little employees can do on their own to keep records safe as there are myriad
ways to get the information needed to carry out an identity theft. Often, Social
Security numbers, addresses and other data are kept in paper files or on
computers. Anyone who has access to those files, either online or otherwise, has
the means to carry out an identity theft. Often, the thief is a fellow employee
working for human resources, payroll or another department with access. Some
companies use ID badges that are actually employees' Social Security numbers —
meaning anyone seeing the badge has what is needed to carry out an ID crime.
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