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Why do Florida metro areas dominate the nation for fraud complaints?

Published Mar. 7, 2015

Flimflam Florida.

The phrase rolls so easily off the tongue. Too easily, given new national statistics that show — right down to the metro area — that Florida remains by far the fraud capital of the United States. The state should be careful, lest it becomes Florida's involuntary brand.

Fourteen of the 50 U.S. metro areas with the highest concentration of fraud and related complaints are right here in this state. Among those 14: the Tampa Bay metro, which ranks No. 18 in the country. Also on the list are other big Florida metros, from Jacksonville and Orlando to Miami-Fort-Lauderdale-Palm Beach.

The rankings come from an analysis by the Federal Trade Commission of fraud and related complaints for 2014 compiled from a nationwide law enforcement data base containing more than 2.5 million complaints.

Who knew that Homosassa, best known for its springs and manatees, had the most fraud and consumer complaints per capita in the state? The town north of Tampa Bay was second in the nation to another small Sunbelt town in remote southern Arizona, Sierra Vista.

Why are we the Scam Magnet? Theories abound.

"Florida's not only the third most populated, its population is different," suggests Tampa's Al Scudieri, who spent 30 years as a special agent of the FBI. "I think we have a more affluent, elderly population. With a heavier concentration of those demographics in this state, they are the most susceptible.

"They are the ones bad people want to target," says Scudieri, who since retiring from the FBI works as lead investigator for Tampa's James Hoyer investigative law firm. The rapid rise of the Internet has fed the fraud frenzy, allowing a far more efficient way for scamsters worldwide to reach potential targets.

Scudieri's right. But he and other watchdogs of the Florida fraud scene can see plenty of other reasons that may contribute to this state's appeal to grifters. Here are five good ones.

1. Florida is well known as a transient state where people often come and go and can feel less connected to their communities.

2. Florida has thin resources to investigate and prosecute fraud. State law enforcement is not focused on such scams, and the FBI since the Sept. 11, 2001, attacks has diverted its priorities to such matters as terrorism. State regulators talk a good game about fighting fraud but have a history of looking the other way except in the most egregious cases.

3. The lack of a state income tax in Florida means less scrutiny. (That's not a reason to adopt a state income tax, just a factor in the state's being more out of touch with financial shenanigans.)

4. The concentration of seniors in Florida means there are lots of people receiving Social Security and related retirement payments who are often lonely and more willing to listen to the pitch from a stranger.

5. Florida still has a reputation as a "second chance" state where people who messed up their lives elsewhere come to try to pull themselves together. Sometimes that does not work out, reinforcing an "easy come, easy go" attitude.

In his many popular books about the sleazier side of Florida, author and Miami Herald columnist Carl Hiaasen immortalized the "sludge" theory of American geography: "If you pick up the country and tilt it, all the sludge would pool in a peninsula at the lower-right-hand corner." That would be Florida.

It's no coincidence that Florida also holds the title as the No. 1 state for mortgage fraud, especially during this past recession and burst housing bubble. And, of course, Florida remains infamous from almost a century ago when real estate scams commonly sold swampland to distant buyers in the chilly Northern states.

According to the FTC report on fraud, identity theft was the top category in 2014 with 13 percent of the nation's overall complaints. Once again, Florida had the highest per capita rate of reported identity theft complaints.

This particular fraud, though, was clustered in different metro areas in Florida. At No. 1 nationwide, the Miami-Fort Lauderdale-Palm Beach metro area had the highest per-person number of identity theft complaints. Among the top 10 U.S. metros for this fraud, Tallahassee ranked No. 4, the Naples area ranked No. 5 and Jacksonville ranked No. 9. (Tampa Bay and Orlando tied at No. 17.)

Bottom line? If you live in Florida, expect to be a target of scams. Be skeptical. Be tough. Get educated about how to avoid frauds, and to report those you do encounter.

It's a very easy prediction that Florida will still be the nation's fraud capital next year.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.

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