Consumer Fraud
Introduction
Consumer fraud and other forms of financial scams have existed for a long time and therefore, many consumers have been misled into spending money on fraudulent business transactions. All these happened even before the internet was invented. Many advertisement media like the newspapers, magazines, telephones and fax machines among other means were traditionally used to defraud individuals leading to unreasonable loss of money on the part of the consumers. However, the widespread use of the internet in the modern world has heightened the situation making many individuals vulnerable as they are highly exposed to the possibilities of being defrauded by these criminals. Today, many online criminals live their lives trying to mislead the consumer with false information with an aim of stealing some money from them. A variety of ways has been used by these criminals to achieve their ends and this mainly depends on the kind of convenience that certain situations or targeted victims offer. Some of the ways that the culprits achieve this is through: deceiving targeted victims with regards to the sale of merchandise which in most cases are substandard, hacking into computers or websites to obtain information on individuals whom they later impersonate or stealing credit card numbers after which they conduct business transactions on their behalf. All these crimes together with other forms of financial scams happen daily and are on the rise even with the relentless effort of various government and international institutions to minimize if not curb them
Types of consumer fraud
Consumer fraud has become one of the common means through which individuals commit crime throughout the globe and any individual in the society needs to understand how vulnerable he/ she may be to becoming a victim of such kind of fraudulent activities (Pak and Shadel, 2007). Because of this, it is important that individuals get to understand, the risk factors of consumer fraud, how to protect themselves from such situations and the means of recovery whenever one is unfortunate enough to be defrauded. It is also important that individuals note that consumer scams occur in a variety of ways and these include the following:
Identity theft
This refers to the case of impersonation where an individual falsely claims to be another with an aim of conducting some fraudulent actions in order to get some financial gains. Identity theft is mostly conducted through the internet and is mainly propagated through the social sites where sensitive details about individuals are posted by the account holder with the harmless aim of connecting with friends and other individuals all over the world.
Malicious hackers and crackers are able to crack into the database of influential individuals or business enterprises, outsource important information, and study how they handle their operations, know their current and potential clients and even know their next moves. With this critical information at hand, the hackers are able to pretend to conduct business under their identity and therefore either defraud the firm or their clients. With the upsurge of social networks like face book and twitter, the trend has increased as culprits do not necessarily need to have intense computing and hacking or cracking skills. Basic information posted on individuals’ accounts like their names, contacts, areas of residence and dates of birth among others are weapons enough to help them impersonate their victims and unlawfully gain money on their behalf or get money from them. Piecing together such sensitive details and making a profile that matches that of the victims is never an uphill task for the criminals.
False insurance claims
Taking an insurance cover is always a desire of many individuals considering the uncertainties people face through their lives. It is however unfortunate that certain criminals take advantage of this need of security and instead deprive citizens of their hard earned money. False insurance claims are usually offered by criminals who would lure consumers into taking attractive insurance packages and eventually disappear with their clients’ money or fail to follow the laid down payment procedures as dictated in their partnership contracts.
Slamming
This is also known as false billing and refers to situation where consumers are defrauded through unnecessary charges on services like unauthorized long distances phone calls or sometimes being made to pay for unnecessary taxes which they should otherwise never pay for.
Buyers Club
This occurs where the fraudsters unlawfully receive money from a consumer who supposedly joined a club yet in real sense the client is not a member of the said club or did not intend to join the club. This is achieved where sensitive and private information on individuals is obtained and used to falsely register him/her into a club and then money obtained through the individual’s credit cards to foot imaginary bills. (Pak and Shadel, 2007)
Counterfeit
The sale of counterfeit goods is an act which has become rampant in the society and is mainly common in the fashion industry where individuals design fake merchandise and sell to the public under the supposed designer’s trademark. Because of the inability to master the art of the legal designers of the goods, those who sell counterfeit goods end up making substandard products to the consumers who pay much for products which are not as good as those of the original producers. Besides interfering with the manufacturer’s right to sell their products, the criminals steal from the consumers by offering merchandise which is far below the value of money they pay for the goods. (Staw and Fox, 1977)
Free Prize and appliances auto repair
Consumers are also defrauded by means which in some cases seem less offensive yet in real case they are classified under consumer fraud. The tendency by some companies or individuals to entice consumers into purchasing some products and promising to give some prize in return is a promotional activity which is widely accepted in the society. However making a lie out of this is criminal as some promoters never keeps to the promise and give no prizes as intended initially. Some go to the extent of using trickery so that in the long run of all the products bought by the clients none has the randomly placed prizes as indicated. In some cases, promoters make fraudulent dealings with imaginary winners whom they end up sharing the prize money with.(Van and Mason)
Some firms and business enterprises also make a promise of offering after sale repair service and warranties to the clients and end up not fulfilling any of the promises, even after selling poor quality products to the consumers. This is fraud and offenders ought not to be left to go Scott free as most of them do.
Credit cards
This is t he most common means through which online criminals defraud the consumers off their money. Many cyber criminals promise the comfort of online business transaction and delivery off goods to your door step an aspect which offers a lot of convenience especially in this busy modern world. With availability of properly composed and encouraging advertisements especially in the internet, the criminals easily convince the consumers of their credibility and reliability and with this individuals rush into making transactions with the supposed suppliers. It is at this stage that individuals issue their credit card numbers to the criminals in the belief that this will help seal the transaction. It is with this information coupled with the intense information technology knowledge that the criminals access individuals’ accounts and most of the time end up wiping it off any cash the consumer had in the account and end up not supplying the intended products to the clients.
It is also the credit cards are also the sane avenues through which criminals involved in slamming and establishing imaginary buyers clubs use to defraud their victims.
Price and subscriptions
Sometimes businesses deceive clients into purchasing goods in the pretence that certain products cost a low price. However, once the transaction has been made, the client would realize that some additional and unnecessary additions had been made on the product’s price. Considering that the transaction has been complete, the client may be unable or even afraid to make complain about the overcharge.
Other criminals also lie to the consumers about the availability of certain products which the consumers would need to subscribe. However, on subscription, the product may never be delivered and worse still the consumer may just find out that the product nor the firm never existed at all
Ways consumers can protect themselves from consumer fraud
Whether transacting online or traditionally, clients need to first make careful considerations since the trend in consumer fraud keeps rising by the day making every individual vulnerable. Although measures have been put in place by all governments to deal with this kind of crime, it is always not a guarantee that such a recovery will be achieved, plus it is just better that consumer guard themselves from exposure to these criminals who can put them into more trouble than they can imagine. The ways to guard from consumer fraud would therefore entail the following:
- Conduct a thorough background check of individual or companies before conducting any business transaction with them. Just a mere posting of the existence of a firm on the internet does not mean that the business is either genuine or truly exists. The host who allow individuals to post their websites or even make advertisements through their search engines are not obligated to confirm the ingenuity of any firm or individual and so do not make restrictions with regards to their clients.
- Individuals should also learn to control the amount of information they post on the internet as a means of limiting the possibility of being exposed to such scum. Even though social sites allow for individuals to post as much personal information as they can, it is the obligation of the individual to take care of their own safety.
- Proper care should be made with regard to the visitors one accept in the social sites as they may be in search of more than mere networking.
- Enhancing the security levels of your computer especially through the use of firewalls, spyware, and cookies is important. Guarding against hackers can also be enhanced by using more stringent security measures like biometric systems.
- Properly scrutiny of the site’s privacy policy should be conducted so as to ensure that they do not offer any loopholes that would allow for sharing of sensitive personal information to the general public.
Remedies against consumer fraud
Individuals sometimes get confused on how to deal with fraud and sometimes end up doing nothing about it. It is however important to know that proper mechanism have been put in place to protect consumers against fraud and therefore fraud can be dealt with in the following ways:
First it is important for the consumer to check the validity of the site through which a transaction was conducted after which he can express his complain to the site. If no reply is sent concerning the complain or there seems to be something fishy concerning the site, the consumer should go ahead and report the matter to the authorities in an aim to recover the loss Various avenues are provided for this to be achieved for example in the united states, online reporting capabilities are offered to enhance the speed at which the problem can be dealt with. The availability of the state and federal consumer protection and product safety law in the United States constitution has been the main avenue through which United States citizens get help whenever such cases of fraud are reported.
In the case of credit card fraud, the law may react through freezing of the credit cards so that the criminal is not able to use it ., fraud alerts are also used to prevent other people from opening account under your identity. Investigation are also conducted and even an attorney is involved in such situations and this may lead to eventual arrest of the culprit
Conclusion
Consumer fraud is an activity that has gone on for a long time and has gained a lot of momentum in the recent time considering the influx of the internet throughout the world. The worst part is that online criminals always find newer ways of committing their routine whenever they realize that their usual tactics have become obsolete and only gives them little power authority and success in terms of deceiving their victims. The fraud is conducted in a variety of ways ranging from credit cards to false subscription and many consumers have fallen into these traps. The federal government has however been in the forefront of dealing with this crime and despite the fact that consumer fraud is on the increase, it has tried is best to control it.
References
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