White Collar Crime – Consumer Fraud

One of the most prevalent categories within white-collar crime is consumer fraud. In 2020, the Federal Trade Commission (FTC) received more than 2.1 million fraud reports from consumers. Reports additionally concluded that consumers lost $3.3 billion in 2020 and $1.8 billion in 2019. 

What is Consumer Fraud?

Consumer fraud is an illicit action that harms a consumer, financially or physically, through deceit or trickery. From bait and switch schemes to copying personal information from documentation, any fraudulent attempt to use or distribute consumer information is considered criminal.

Organizations such as the FTC, FBI, NCL, Consumers Onion, and Direct Marketing Association contribute to public education on the topic. As a result, better-informed consumers can prevent and identify fraudulent business and other consumer fraud practices. 

The Federal Trade Commission (FTC) is a federal agency with authority over consumer protection. It is responsible for accepting reports related to consumer fraud. Although they cannot resolve consumer fraud cases, they can be instrumental in helping victims of fraud get their money back.

The FTC monitors and pursues consumer fraud under the following categories:

• Identity theft
• National Do Not Call Registry violations
• Computers, the Internet, and online privacy
• Telemarketing scams
• Credit scams
• Immigration services
• Sweepstakes, lotteries, and prizes
• Business opportunities and work-at-home schemes
• Health and weight loss products
• Debt collection, credit reports, and financial matters

Consumer Fraud Examples

Consumer fraud covers a wide variety of acts. The most common scams and crimes investigated by the FBI are advance fee fraud, business email compromise, charity or disaster fraud, counterfeit prescription drugs, credit card fraud, elder fraud, election security, fraudulent cosmetic products, funeral fraud, health care fraud, identity theft, internet-auction fraud, investment fraud, money mules, non-delivery of merchandise or services, Nigerian letter fraud, pyramid schemes, ransomware, and strawman or bond fraud.

 The following explains a handful of the most common types of consumer fraud.

Identity Theft

Identity theft is when personal information, such as account details, passwords, digital identifiers, etc., is stolen or used by someone else. For example, the data might be sold or used to gain access to accounts or additional information.

From hacking to stealing a wallet, identity theft can range from mild to severe financial loss. While it can result from negligence or carelessness, even individuals who adhere to advanced security precautions can be vulnerable.

Solicitations

Solicitations can be a mere annoyance, but certain deceitful practices can cause serious harm. Whether it’s impersonation schemes or pay-to-win sweepstakes, even junk mail can be consumer fraud.

Callers asking for access to a consumer’s computer or requesting personal information to receive a prize are examples of telephone solicitation scams. Scams posing as charities or other organizations canvassing for donations are also an example of consumer fraud.

Internet Fraud

The defining trait of internet fraud is any false or deceitful action involving the internet. With such an open field of consideration, it’s no surprise that many consumer fraud acts are either partially committed through the Internet or entirely. 

Internet auction fraud, phishing, spam, and home-improvement scams are a handful of examples. 

Income Tax Fraud

The Internal Revenue Service (IRS) warns taxpayers that tax scams can cause immense financial and legal difficulty. Although the IRS updates tax scams and consumer alerts regularly, new variations develop that might catch consumers unaware.

Individuals might pose as legitimate businesses that aid in securing tax refunds for an up-front fee or a taxpayer knowingly engaging in an illegal scheme. In the first example, only the scammer is guilty of fraud. In the second example, the taxpayer will incur fines or imprisonment.

Credit Card Fraud

Credit card fraud entails the unauthorized usage of credit cards, debit cards, or other payment tools to gain money or property. Unfortunately, consumers might overlook signifiers that guarantee the legitimacy of account issuers or the security of transactions. 

Why Is Consumer Fraud Considered A White Collar Crime?

The FBI defines white-collar crime as “characterized by deceit, concealment, or violation of trust,” but primarily actions motivated by financial or personal gain or the avoidance of financial or personal losses. 

Consumer fraud is a type of white-collar crime involving the manipulation or theft of consumer information for profit or other advantages.

How Can a Consumer Fraud Lawyer Help?

The consumer fraud lawyers at Zoukis Consulting Group have specialized knowledge and extensive experience in consumer law. 

If you’ve been charged with federal consumer fraud, your case might take months or years. However, experienced Zoukis Consulting Group can support clients through intensive evidence gathering, thorough strategy, and a commitment to the best possible results.

Contact us today for a consultation.

Published Feb 15, 2022 by Christopher Zoukis, JD, MBA | Last Updated by Christopher Zoukis, JD, MBA on Jul 17, 2023 at 2:26 am