Legal Disclaimer: This article provides general information for educational purposes only and does not constitute legal advice. Consult a licensed attorney for advice specific to your situation.
Consumer disputes cost Americans billions every year. Yet most people never take formal action to recover what they're owed. This page compiles the latest data from the FTC, state court systems, the CFPB, and academic research to give you the full picture of consumer disputes in America.
Use this page: Journalists, researchers, bloggers, and advocates are welcome to cite this data. All sources are linked below each statistic.
Contents
2024-2025 Headline Numbers
Sources: FTC Consumer Sentinel Network Data Book 2024, National Center for State Courts
Consumer Fraud Trends
The FTC's 2024 data reveals an alarming trend: while the total number of fraud reports held steady at about 2.6 million, the percentage of people who lost money jumped from 27% in 2023 to 38% in 2024. Scammers are getting more effective.
Top Fraud Categories by Reported Losses (2024)
| Category | Losses | Change from 2023 |
|---|---|---|
| Investment scams | $5.7 billion | +24% |
| Imposter scams | $2.95 billion | Increased |
| Government imposter scams | $789 million | +$171 million |
| Business/job opportunity scams | $750.6 million | +$250 million |
| Job/employment agency scams | $501 million | 5.6x since 2020 |
Source: FTC Press Release, March 2025
How Scammers Contact Victims
- Email — Most common contact method (2nd year in a row)
- Phone calls — Second most common
- Text messages — Third most common
How Victims Pay Scammers
In 2024, consumers reported losing more money through bank transfers and cryptocurrency combined than all other payment methods. This shift makes recovery harder, since bank transfers and crypto are difficult to reverse.
What this means for you: If you've been scammed or defrauded, a demand letter is often the first step to recovering your money before the trail goes cold. For disputes under your state's small claims limit, you can pursue the case yourself without a lawyer.
Small Claims Court Trends
Small claims court was designed as the "people's court" — an affordable way for ordinary Americans to resolve disputes. But usage has been plummeting for decades.
National Decline
- 2018: 1.9 million small claims cases filed (32 reporting states)
- 2022: 1.3 million cases filed — a 32% decline in four years
- While other civil case types (contracts, property, probate) have recovered post-pandemic, small claims has not
California: A Case Study
California's data shows the long-term trend most dramatically:
- 1982: ~600,000 small claims filings (peak year, coinciding with TV's "The People's Court" debut)
- 2000: ~325,000 filings
- 2023: Fewer than 100,000 filings
- That's a decline of more than 83% from peak
New York: 75% Drop in 25 Years
A January 2024 NYPIRG survey found that New York small claims filings decreased approximately 75% over a 25-year period, with only about 34,500 cases filed in 2019 (pre-pandemic).
Sources: Court Statistics Project, California Courts 2024 Statistics Report, NYPIRG Small Claims Court Report, January 2024, Reuters, March 2024
Why Are Small Claims Filings Declining?
Experts cite several contributing factors:
- Mandatory arbitration clauses: More businesses require arbitration, diverting cases from court
- Shift to online commerce: Hard to sue an online retailer in local small claims court
- Perceived futility: Some potential plaintiffs see small claims as "not worth the hassle"
- Lack of awareness: Many people don't know they can represent themselves in small claims court
- COVID-19 aftermath: While other case types recovered, small claims didn't fully bounce back
The paradox: Consumer fraud losses are at an all-time high ($12.5B), yet the court designed for everyday people to seek justice is seeing record-low usage. The gap between harm and action is widening.
Demand Letter Effectiveness
Demand letters are the most common first step before litigation. Here's what the data shows about their effectiveness:
Key Statistics
- Required before small claims court in many jurisdictions — Massachusetts requires a 30-day demand letter before filing consumer protection claims under Chapter 93A
- Settlement without court: The majority of demand letters result in some form of resolution without ever going to court. American Bar Association data suggests that approximately 65-75% of disputes are resolved after a demand letter is sent, either through full payment, partial settlement, or negotiation
- Response rates: Industry data indicates that most demand letter recipients respond within 30 days, with professional-looking letters receiving faster responses than informal ones
- Cost comparison: A demand letter costs $0-$600 vs. $5,000-$10,000+ for litigation. Even at the high end, a demand letter is 90% cheaper than going to court
Bottom line: Sending a demand letter is the single most cost-effective step you can take in a consumer dispute. It costs little or nothing, resolves the majority of cases, and is required before court in many states. Create a free demand letter here.
Most Common Consumer Disputes
Based on FTC complaint data and small claims court filings, the most common consumer disputes include:
Top 10 Consumer Dispute Types
| # | Dispute Type | Typical Amount | Common Resolution |
|---|---|---|---|
| 1 | Security deposit disputes | $500-$5,000 | Demand letter + small claims |
| 2 | Unpaid invoices / money owed | $500-$10,000 | Demand letter |
| 3 | Contractor/home improvement disputes | $1,000-$25,000 | Demand letter + mediation |
| 4 | Insurance claim disputes | $1,000-$50,000 | Demand letter + DOI complaint |
| 5 | Auto repair / purchase disputes | $500-$15,000 | Demand letter + AG complaint |
| 6 | Product defects / warranty issues | $100-$5,000 | Demand letter + chargeback |
| 7 | Unpaid wages / employment disputes | $500-$15,000 | Demand letter + DOL complaint |
| 8 | Property damage (neighbor, accident) | $500-$10,000 | Demand letter + small claims |
| 9 | Debt collection disputes | $500-$10,000 | Dispute letter + CFPB complaint |
| 10 | Service cancellation / refund issues | $50-$2,000 | Demand letter + chargeback |
State-by-State Data
Small Claims Court Limits
Every state sets its own maximum amount for small claims cases, ranging from $2,500 to $25,000. See our complete small claims limits by state guide for current limits.
States Requiring Demand Letters Before Filing
Several states either require or strongly recommend sending a demand letter before filing in small claims court:
- Massachusetts: Chapter 93A requires a 30-day demand letter for consumer protection claims (treble damages available)
- California: Strongly recommended; judges view failure to attempt resolution negatively
- Most states: While not always legally required, judges in virtually every jurisdiction look favorably on plaintiffs who attempted to resolve the dispute before filing
States Where Lawyers Are Prohibited in Small Claims
In 12 states, lawyers are not allowed to represent parties in small claims court — making self-help tools like demand letter generators especially valuable:
California, Colorado, Hawaii, Kansas, Michigan, Montana, Nebraska, New York, North Dakota, Oregon, South Dakota, Washington
The Access to Justice Gap
The data paints a troubling picture: consumer harm is rising while the tools meant to address it are underused.
Key Findings
- 80% of low-income Americans don't get the legal help they need (Legal Services Corporation)
- $12.5 billion in fraud losses reported in 2024 — actual losses are likely much higher since most fraud goes unreported
- Small claims filings down 32% despite rising disputes — people aren't using the court system designed for them
- Arbitration clauses affect an estimated 60% of non-union private sector workers and countless consumer contracts
Why this matters: Free self-help legal tools like FreeDemandLetter.com exist to close this gap. When a professional demand letter costs $0 instead of $500, more people can take the first step toward resolving their disputes. And when 65-75% of disputes resolve after a demand letter, that first step is often the only one needed.
Sources & Methodology
All statistics on this page are sourced from official government data, academic research, and established legal organizations. We update this page as new data becomes available.
Primary Sources
- FTC Consumer Sentinel Network Data Book 2024 (March 2025)
- National Center for State Courts — Court Statistics Project
- California Courts 2024 Statistical Report
- NYPIRG: A Survey of Albany Small Claims Court (January 2024)
- Reuters: Where did all the small claims court cases go? (March 2024)
- CFPB Consumer Complaint Database
- Legal Services Corporation — Justice Gap Report
Demand Letter Statistics
Demand letter resolution and response rate data is compiled from American Bar Association publications, legal industry surveys, and court system data on pre-filing dispute resolution. Individual results vary based on dispute type, documentation quality, and the relationship between parties.
Last updated: February 2026. Have a correction or additional data source? Contact us.
Resolve Your Dispute for Free
Don't become another statistic. Create a professional demand letter and take the first step toward resolving your dispute.
Create Your Free Demand LetterKey Takeaways
- Consumer fraud losses hit $12.5 billion in 2024, up 25% from the previous year (FTC data)
- Small claims court filings dropped 32% nationally between 2018-2022, despite rising consumer harm
- California small claims filings declined 83% from their 1982 peak of 600,000 to under 100,000 in 2023
- 65-75% of disputes resolve after a demand letter is sent, without going to court
- 12 states prohibit lawyers in small claims court, making self-help tools essential
- 80% of low-income Americans don't get the legal help they need
Related Articles
- Do Demand Letters Work? Success Rates & Statistics
- How Much Does a Demand Letter Cost?
- Can You Send a Demand Letter Without a Lawyer?
- What Happens After You Send a Demand Letter?
Free Tools: Try our Damages Calculator, Dispute Diagnostic Quiz, or Statute of Limitations Lookup.