What Is Consumer Fraud

In this day and age, consumer fraud has become the bread and butter of countless criminals. It’s an easy scam that gives them access to bank account details, credit card history, and other financial information for monetary gain.  Having the full name and address of potential victims makes it easier for deceitful businesses to misuse information. They can hack online accounts, infiltrate servers and transfer malware into your device/system with the acquired data.

Arming yourself with information enables you to identify shady business schemes and warn others.  You can learn how to avoid scams by understanding the purpose and intent of such criminals.

Continue reading this article to know more.

The Basics: What Is Consumer Fraud?

Consumer fraud refers to illegal business practices used by individuals or organizations to exploit consumers. Fraudsters use false promises, fake warranties, inaccurate claims, and monetary incentives to attract victims. Then defraud consumers by running off with their money. Due to this, consumers experience a devastating loss of finances along with other damages.
Most reported crimes narrate stories of consumers being duped by smooth-talking representatives. These scammers convince victims to part with their money by offering consulting services, investment deals, or free prizes in exchange.

Common Types of Consumer Fraud Include:

Whether they contact you online, via phone, or in person, most con artists use one of the following tactics to win your trust.

Advance Fee Scam

Businesses or sales representatives request you to pay an upfront fee before you receive their services. They might place this offer on-call or during door-to-door visits. Reasons for payment include membership fees, registration fees shipping costs, and other obligatory charges.

Once you wire the money, the same friendly sales rep stops answering your calls.

Free Trials and Phony Giveaways

Have you participated in free trials, subscriptions, and giveaways?

Scammers turn these exciting offers to retrieve contact details and bank account numbers. They utilize this information to create fake accounts. They might even use credit card details to bill you for unauthorized orders or trade-off email addresses to third parties.

Online Shopping Scams

This type of consumer fraud takes advantage of unsuspected online shoppers. Scammers use fake websites and e-commerce accounts to attract buyers. These virtual fronts are used to take orders without the intention of delivering the package.

Due to this, the customer winds up losing money and never receiving their purchased goods.

In some cases, sellers might send counterfeit products or damaged products. They use a no refund policy to ensure that they remain unscathed after the transaction.

Cashier’s Check Fraud

Cashier checks are considered the safest way to wire and receive money. Knowing this, scammers send forged checks to steal money from the consumers’ accounts. They might even send over a check with an additional amount due to a plausible excuse. Then request you to transfer the extra money overseas to an alleged friend or their ‘other’ bank out.

There are times when they use these checks to receive goods and services without paying for them.

In both cases, this type of consumer fraud remains undetected. That’s because banks take a few days to clear the check. By that time, the scammers have already received their parcels/money.

In a Nutshell

Scammers use different types of consumer fraud to exploit innocent victims. Most of these schemes use business opportunities, rewards, and services as an incentive to collect personal information, financial details, and social security number. These are then utilized for illicit activities such as data mining and identity theft. Alternatively, scammers might use these ploy to receive money in exchange for non-existent products and services.

What Should You Do If You Get Scammed?

Federal Trade Commission (FTC) is responsible for supervising fraud-based investigations. It strives to end consumer fraud crime and unlawful business practices by accepting online complaints. After this, FTC investigators look into the matter, determined to stop and resolve all types of consumer crimes on streets, online, via telephone, etc.

Moreover, FraudTrac aims to assist the general public by creating an online database to track scams. You can use this interactive platform to file complaints, post reviews, or stay updated with real-time news about consumer fraud.

Do you want to know more? Contact us today for further details.

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