National Consumers League

Top ten fraud report finds rising rate of ‘phantom debt’ scams

January 20, 2015

Contact: NCL Communications, Ben Klein, (202) 835-3323,

Washington, DC -- The National Consumers League (NCL), the nation’s pioneering consumer advocacy organization, today released its annual compilation of the top ten scams reported to, NCL’s flagship project for reporting and tracking scams. Based on an analysis of more than 10,000 consumer complaints submitted in 2014, NCL is warning consumers to be on the lookout for so-called “refund and recovery” scams, also known as “phantom debt” scams.

The predominant version of the “refund and recovery” scams involved a fraudster contacting consumers claiming to be collecting unpaid debts. If consumers questioned the debt, they reported frequently being threatened with jail time, legal action, or other consequences. In 2013, this was the fastest-growing type of telemarketing scam reported to NCL’s campaign. This trend continued in 2014, as the “refund and recovery” scams jumped by 6.23 percentage points, rising to #4 on the overall complaint list.

Fake check scams, which were at the top of the Top Ten Scams list in 2013, dropped to the #3 spot in 2014, down more than 7 percentage points. Topping the list in 2014 were two other perennially frequent frauds—Internet merchandise scams and bogus prizes/sweepstakes scams, ranked #1 and #2 respectively. 

“Fraud remains one of the most pernicious threats facing consumers today,” said NCL Executive Director Sally Greenberg. “We are particularly concerned about scammers increasingly relying on the ‘old-fashioned’ telephone as a way to reach millions of potentially vulnerable consumers.”

The telephone was reported by 42.85% of complainants as the way that they were first contacted by a scammer, ahead of the Web (30.97%), email (15.71%) and postal mail (6.92%). The telephone was the top method of first contact in 2013 and increased even more in 2014 (6.49 percentage point increase).

A positive trend in the 2014 report is the shift in how victims reported sending money to con artists. Previously, wire transfer had been the most popular payment method reported to In 2014, nearly half (48%) of all victims reported paying by credit card when they lost money to a scam—continuing a trend first noted in 2013 (35%). Victims who pay with credit cards can more easily recover lost funds than those who pay via wire transfer service when they promptly report the suspicious charges to their banks or credit card companies.

“Credit card transactions are a safer way for consumers to pay for products since they can dispute fraudulent charges with their credit card company,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud. “Unfortunately, when a fraud victim sends money via wire transfer or prepaid debit card, the chances of getting their money back are much lower.”

Read the full 2014 top ten scams report here.


About the National Consumers League
The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit