Consumer Protection

CONSUMER FRAUD

Consumer fraud refers to an act resulting in financial or other losses for consumers in the business transactions. The act where the use or employment by any person of any unfair commercial practice, deception, fraud, false promise, suppression, or omission of any material fact with an intention to sell or advertisement of any product by misleading the consumer is declared to be an unlawful practice. Consumer fraud can take place in person, by telephone or mail, or over the Internet.
The Most Common Consumer Frauds
The most common fraud occurred when consumers were billed for products or services they never received. This could be the result of being charged with or without knowledge and consent of the purchase.
More specifically, the most common types of fraud reported were for bogus weight-loss products, nonexistent foreign lotteries, unauthorized buyer club enrollments, dishonest prize promotions and fraudulent work-at-home programs.

Identity Theft
Identity theft occurs when someone steals information – like a name, social security number, credit card information or bank account number – and uses the stolen information to impersonate the victim in order to commit fraud, theft or other crimes. As many as nine million Americans have their identities stolen each year, making it one of the most widespread and serious forms of consumer fraud.
What makes identity theft particularly dangerous is that the victim often only finds out about it after the damage is done. By the time a victim is alerted to any problem, the identity thief may have already emptied a bank account, taken out a loan, obtained and used a credit card, applied for government benefits, or otherwise caused the victim some sort of financial, personal or professional harm. Such practices may ruin a victim’s credit score and cost thousands of dollars in illegal purchases.
Recovering from identity theft may take a long time and can require great effort. That’s why it’s especially important for consumers to take steps to protect against identity theft. Consumers should always be wary when giving out financial information and should regularly check their account statements for anything out of the ordinary.
Credit Card Fraud
Credit card fraud costs American consumers hundreds of millions of dollars every year, according to the FTC. While the federal government has many laws in place to protect credit card users from institutional abuse, it can’t protect them from all forms of credit card fraud – especially the theft of credit card numbers and codes – committed by dishonest individuals.
Consumers can protect themselves by:
• Minimizing the number of cards used.
• Making sure cards are not left lying around or lent to anyone.
• Signing cards as soon as they are received.
• Keeping records of account information in a secure place.
• Destroying unneeded statements.
• Monitoring bills for any discrepancies and notifying card companies immediately if any are discovered.
• Watching credit card transactions whenever possible to note any suspicious activity.
• Refusing to give an account number over the phone or Internet unless certain the recipient is reputable.

Other Types of Consumer Fraud
Dishonest individuals have many ways in which to promote their frauds. Two well-travelled routes to a consumer’s pocketbook are over the phone and via the Internet. Also targeted by scam artists are older Americans with disposable income.

Phone Fraud
Every day people are contacted by telephone with phony offers. And despite often knowing better, consumers continue to provide personal and financial information to unknown solicitors who promise them some sort of prize or benefit. Consumers need to protect themselves by understanding that if an offer seems too good to be true, it probably is.
Sometimes a caller will attempt to frighten a consumer by falsely identifying him or herself as a representative of a bank or credit card company. The caller then proffers phony information about a cancelled, overcharged or misused account. Once the victim is confused and troubled, the caller will solicit card information in order to “fix” the problem.
Internet Fraud
Internet fraud becomes more sophisticated each year, and there are many ways in which consumers can become victims. Some Internet frauds mimic versions of those perpetrated over the phone, with promises of cash or benefits in exchange for personal financial information.
A majority of Internet fraud concerns Internet auctions. Illegitimate online auction sites offer up goods for bid that simply do not exist, or if they do exist, may be stolen.
A particularly common Internet fraud is any variation of the “Nigerian scam.” In this, the victim receives an email promising a share of fictitious monies being held within a country’s banking system. The email sender states that he cannot access any of the money until someone helps him free the funds with an advanced payment or the information for a U.S. bank account.
Scams on the Elderly
Senior citizens who were raised to be trusting and polite are commonly the victims of scam artists. They may be easier to pressure, more afraid of being considered rude, and less likely to recognize malignant motives. These attributes make them particularly attractive targets.
The elderly are also more susceptible to phony products that promise to increase longevity, fight disease and promote cognition. Therefore, they are more easily convinced to purchase counterfeit prescription drugs, anti-aging products, health care and insurance plans.