Direct-Mail Fraud

ALSO KNOWN AS direct marketing, direct mail is a form of advertising in which companies send large numbers of printed mailers, generally numbering in the millions per campaign, through the U.S. Postal Service or another mailing venue to potential customers. Direct-mail fraud results when a deceptive or misleading offer is sent to consumers via a mass mailing that causes the consumer to remit money for a product or a service with unwarranted or false expectations.

In a 1999 United States General Accounting Office report, the Federal Trade Commission (FTC) defined mailed material as deceptive, “if the material included a representation or practice or if the material omitted information that caused a consumer to be misled and eventually suffer some loss or injury, despite the fact that the consumer behaved reasonably under the circumstances.”

In recent years, the scope of understanding of direct-mail fraud has expanded to encompass other methods of mass mailing, such as faxes and bulk mailing using e-mail addresses, also known as spamming. The practice of using fax for mass mailing is closely related to direct mail in its potential for fraud and other problems; only the venue for distributing the mailing is different. But mass mailing to e-mail accounts is exponentially more hazardous when the claims in the e-mail are in some way deceptive or misleading, because of the great numbers[Page 256] of people that can be reached in a short period of time, and the speed at which these kinds of false claims can have an effect.

Statistics about direct-mail fraud and its impact on consumers reveal that it has a broad effect at all levels of contemporary American society; indeed it might be argued that it is the most likely form of business fraud to have a measurably damaging effect on consumers. Consumer concerns and complaints are usually submitted to the FTC and/or the Postal Inspection Service of the U.S. Postal Service. Both organizations are active in combating direct-mail fraud; the FTC is responsible for fair trade practices and the Postal Service is usually the vehicle for the fraud.