[Federal Register Volume 74, Number 111 (Thursday, June 11, 2009)]
[Notices]
[Pages 27796-27798]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13643]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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SUMMARY: The FTC intends to conduct two exploratory studies on consumer 
susceptibility to fraudulent and deceptive marketing. This research 
will be conducted to further the FTC's mission of protecting consumers 
from unfair and deceptive marketing. Before gathering this information, 
the FTC is seeking public comments on its proposed research. This 
notice seeks comments on the Fraud Susceptibility Internet Panel Study, 
one of the two studies. The Commission is also seeking comments on the 
other study in a separate Federal Register notice. Comments will be 
considered before the FTC submits a request for Office of Management 
and Budget (OMB) review under the Paperwork Reduction Act (PRA).

DATES: Comments must be submitted on or before August 10, 2009.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Fraud 
Susceptibility Internet Panel Study, FTC File No. P095500'' to 
facilitate the organization of comments. Please note that your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including on the publicly accessible 
FTC Website, at (http://www.ftc.gov/os/publiccomments.shtm).
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual's Social Security 
Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential. . . .,'' as provided in 
Section 6(f) of the Federal Trade Commission Act (``FTC Act''), 15 
U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments 
containing material for which confidential treatment is requested must 
be filed in paper form, must be clearly labeled ``Confidential,'' and 
must comply with FTC Rule 4.9(c), 16 CFR 4.9(c).\1\
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 
4.9(c).
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    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: (https://secure.commentworks.com/ftc-fraudinternetpanel) (and following the 
instructions on the web-based form). To ensure that the Commission 
considers an electronic comment, you must file it on the web-based form 
at the weblink: (https://secure.commentworks.com/ftc-fraudinternetpanel). If this Notice appears at (http://www.regulations.gov/search/index.jsp), you may also file an electronic 
comment through that website. The Commission will consider all comments 
that regulations.gov forwards to it. You may also visit the FTC Website 
at http://www.ftc.gov to read the Notice and the news release 
describing it.
    A comment filed in paper form should include the reference Fraud 
Susceptibility Internet Panel Study, FTC File No. P095500'' both in the 
text and on the envelope, and should be mailed or delivered to the 
following address: Federal Trade Commission, Office of the Secretary, 
Room H-135 (Annex J), 600 Pennsylvania Avenue, NW, Washington, DC 
20580. The FTC is requesting that any comment filed in paper form be 
sent by courier or overnight service, if possible, because U.S. postal 
mail in the Washington area and at the Commission is subject to delay 
due to heightened security precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. The Commission will consider all timely and responsive 
public comments that it receives, whether filed in paper or electronic 
form. Comments received will be available to the public on the FTC 
Website, to the extent practicable, at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of discretion, the Commission makes 
every effort to remove home contact information for individuals from 
the public comments it receives before placing those comments on the 
FTC Website. More information, including routine uses permitted by the 
Privacy Act, may be found in the FTC's privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to Keith B. Anderson, Economist, Bureau of 
Economics, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Mail 
Stop NJ-4136, Washington, DC 20580. Telephone: (202) 326-3428; e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

[[Page 27797]]

I. Background

    As part of its consumer protection mission, the FTC has brought 
hundreds of cases targeting fraud, and has committed significant 
resources to educational initiatives designed to protect consumers from 
fraud. The Commission hosted a Fraud Forum\2\ on February 25-26, 2009 
to examine fraud in the market place. The Commission also conducted 
telephone surveys in 2003 and 2005 designed to measure the proportion 
of the U.S. adult population that has fallen victim to various consumer 
frauds.\3\ Despite this, surprisingly little is known about what 
determines consumers' susceptibility to fraud. For example, the 2003 
and 2005 FTC Consumer Fraud surveys found that education was not a 
significant predictor of fraud victimization. Understanding when and 
why people are vulnerable to fraud would better inform the FTC's 
substantial, ongoing efforts to fight fraud through law enforcement and 
consumer education. Any additional insights into how and why people 
fall victim to fraud could also help improve any future fraud surveys 
the Commission may undertake. The study being announced in this notice 
is a preliminary and exploratory step toward facilitating those 
efforts. The study is not intended to lead to enforcement actions; 
rather, study results may aid the FTC's efforts to better target its 
enforcement actions and consumer education initiatives and improve 
future fraud surveys.
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    \2\ Information on the Fraud Forum is available at: (http://www.ftc.gov/bcp/workshops/fraudforum/index.shtm).
    \3\ The Commission has published two staff reports describing 
the results of these surveys--Consumer Fraud in the United States: 
An FTC Survey (published August 2004 and available at (http://www.ftc.gov/reports/consumerfraud/040805confraudrpt.pdf) and 
Consumer Fraud in the United States: The Second FTC Survey 
(published in October 2007 and available at (http://www.ftc.gov/opa/2007/10/fraud.pdf).
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    Economic and psychological experiments have identified several 
decision-making biases, such as impulsivity, over-confidence, over-
optimism, and loss aversion, that can cause inaccurate assessments of 
the risks, costs, and benefits of various choices. In the study 
announced in this notice, FTC staff proposes to conduct a survey using 
an Internet survey protocol to examine whether susceptibility to 
consumer fraud is related to these types of decision biases. Study 
results also might shed light on whether consumers with certain 
behavioral traits are more or less likely to be skeptical about 
advertisements and whether there is a relationship between ad 
skepticism and the likelihood of having been a victim of fraud.

II. Paperwork Reduction Act

    As required by Section 3506(c)(2)(A) of the PRA, 44 U.S.C. 3501-21, 
the FTC is providing this opportunity for public comment before 
requesting that OMB approve the study. Under the PRA, federal agencies 
must obtain OMB approval for each collection of information they 
conduct or sponsor. ``Collection of information'' means agency requests 
or requirements that members of the public submit reports, keep 
records, or provide information to a third party. 44 U.S.C. 3502(3); 5 
CFR 1320.3(c).
    Specifically, the FTC invites comments on: (1) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the FTC, including whether the information will have 
practical utility; (2) the accuracy of the FTC's estimate of the burden 
of the proposed collection of information; (3) ways to enhance the 
quality, utility, and clarity of the information to be collected; and 
(4) ways to minimize the burden of collecting information on those who 
respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses. All comments should be filed as prescribed in 
the ADDRESSES section above, and must be received on or before August 
10, 2009.

A. Description of the Collection of Information and Proposed Use

    The FTC proposes to conduct a survey which will include 
approximately 5,000 interviews with individuals representing a large 
spectrum of the U.S. adult population. The survey will be conducted 
over the Internet, and participants will be drawn from an Internet 
survey panel maintained by a commercial survey firm that operates such 
panels. While the sample will not be nationally representative, it will 
still provide useful insights into consumer susceptibility to fraud.\4\
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    \4\ The FTC recognizes, of course, that a sample drawn from an 
Internet panel does not represent a random sample of the U.S. 
population. However, the purpose of this study is to compare the 
experiences and attitudes of people with different characteristics 
rather than to estimate the percentage or number of U.S. consumers 
who have particular characteristics or experiences. As such, using 
an Internet panel should not pose significant problems.
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    The study will examine whether participants have been the victim of 
certain forms of consumer fraud in the recent past. In addition, staff 
may attempt to measure consumer skepticism about advertisements, as 
well as consumer knowledge, risk attitudes, and impulsivity using 
existing methods from economics and psychological research. Staff may 
measure consumer knowledge using consumer literacy and financial 
literacy surveys \5\ in order to test subjects' marketplace 
understanding and sophistication. Staff seeks to determine if the 
presence of such knowledge and behavioral characteristics affects the 
likelihood a person will have been a victim of fraud.
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    \5\ See Annamaria Lusardi, Financial Literacy: An Essential Tool 
for Informed Consumer Choice?, Working Paper, Joint Center for 
Housing Studies, Harvard University (2008), for examples of 
financial literacy questions similar to those the FTC is 
considering.
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    The study will measure subjects' risk attitudes through a series of 
choices between smaller certain amounts of money and larger risky 
amounts.\6\ The study's design may describe the product to some 
subjects as creating benefits, while presenting to other subjects 
nearly identical information depicted as a reduction in harm. Staff 
would then test whether fraud victims tend to be less likely to be 
risk-averse and/or loss-averse than non-victims. Staff also may seek to 
determine whether risk-averse and/or loss-averse subjects are 
particularly susceptible to fraudulent claims framed as opportunities 
to escape losses.\7\ The study may measure subjects' impulsivity 
through a series of choices between smaller monetary amounts received 
sooner and larger amounts received later.\8\ Staff then would test to 
see if impulsive subjects are more likely to have been victims of fraud 
and/or are more susceptible to fraudulent claims. The study also may 
measure participants' optimism \9\ and

[[Page 27798]]

skepticism \10\ to determine how these characteristics affect the 
likelihood that someone becomes a victim of consumer fraud. In 
addition, staff anticipates collecting demographic information from the 
surveyed subjects.
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    \6\ Staff anticipates using standard risk aversion measurement 
methodologies akin to those in Charles Holt and Susan Laury, Risk 
Aversion and Incentive Effects, American Economic Review, December 
2002, 1644-1655. Some changes may be made to the questions and 
question sequence since participants in this study will not receive 
actual cash payments reflecting the results of their decisions.
    \7\ Several academic articles report that people are more 
willing to take identical risks over monetary gambles if the risk is 
presented as an opportunity to escape losses rather than as a chance 
to gain. Our ``framing'' methodologies may emulate those in Amos 
Tversky and Daniel Kahneman, The Framing of Decisions and the 
Psychology of Choice, Science, Vol. 211, No. 4481 (Jan. 30, 1981), 
453-458.
    \8\ Staff anticipates using methodology similar to that in 
Stephan Meier and Charles Sprenger, Impatience and Credit Behavior: 
Evidence from a Field Experiment, Working Papers 07-3, Federal 
Reserve Bank of Boston (2007).
    \9\ Staff plans to use standard questions similar to those in 
Manju Puri and David Robinson, Optimism and Economic Choice, Journal 
of Financial Economics, 2007, Vol. 86, 71-99.
    \10\ Staff may use the scale developed in Carl Obermiller and 
Eric Spangenberg, Development of a Scale to Measure Consumer 
Skepticism toward Advertising, Journal of Consumer Psychology, Vol. 
7, No. 2, 1998, 159-186.
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B. Estimated Burden Hours

    The FTC plans to seek information from approximately 5,000 
respondents using a questionnaire that should take no more than 30 
minutes to complete. Prior to that, a pre-test of up to 100 
participants will be conducted. Allowing for an extra two minutes for 
questions unique to the pretest, the pretest should total no more than 
32 minutes to complete. Accordingly, the information collection burden 
of the Internet Panel study should total no more than 2,553 hours. 
Finally, the cost per respondent should be negligible. Participants 
will be compensated for their participation in the study using the 
contractor's standard method of rewarding members of its Internet panel 
for survey participation. Participation is voluntary and will not 
require start-up, capital, or labor expenditures by respondents.


    By direction of the Commission.
Donald S. Clark,
Secretary
[FR Doc. E9-13643 Filed 6-10-09: 8:45 am]
[BILLING CODE 6750-01-S]