Consumer Fraud

Business transactions require trust between buyers and sellers. As a consumer, you put a lot of faith in the person or company you’re buying from. You trust that the product is safe, is worth the price, and will do what it’s supposed to. Unfortunately, scammers can use your trust to try to rip you off.

Consumer fraud is a serious problem — it can cost you a lot of money or put you in danger. Understanding more about consumer fraud can help you avoid becoming a victim. For more information about preventing consumer fraud and protecting your rights if you are a victim, talk to a consumer fraud attorney.

What Is Consumer Fraud?

Consumer fraud involves misleading or deceptive business practices that cost a consumer money. Consumer fraud can involve a deceptive business or fraudulent claim from someone claiming to represent a business.

Fraud is more than just getting a bad deal. It involves intentional deception, omissions, or misrepresentations of fact. Fraud is a crime, and you can take legal action to recover the money you lost to fraudsters.

The Types of Consumer Fraud

There are many types of consumer fraud. Scammers can target you in person, over the phone, or online. Examples of consumer fraud cases include:

• False advertising
• Bait-and-switch scams
• Phishing scams
• Deceptive telemarketing
• Predatory debt collection practices
• Defective products
• Advance fee fraud
• Mortgage lender fraud
• Fake charities

What Is False Advertising?

False advertising is when a seller claims their product can do something it can’t, the product displays a different price, or the product doesn’t function as promised. False advertising can take many forms, whether through an online ad, a television commercial, or a newspaper ad.

Some signs to look for and recognize false advertising are:

• Ads that contain claims you can’t confirm
• Unrealistic claims or promises that seem too good to be true
• Hidden fees that you don’t discover until you try to buy the product

Each state has its own laws on the penalties for false advertising. Violations can result in criminal charges and civil liability. Always review return policies, warranties, and guarantees before making a purchase. This way, you know your options if the product or service is defective. Don’t buy a product when the salesperson uses high-pressure sales tactics.

How Can I Protect Against Identity Theft?

Identity theft occurs when another person uses your personal information to access your finances or take out loans and credit cards in your name. Identify theft can happen when you give your information to a business, and they mishandle it during a data breach or sell it to a third party. You can protect yourself against identity theft in the following ways:

• Being careful with what kind of information you disclose online
• Limiting how many store-specific credit cards you apply for
• Using strong passwords and setting up two-factor authentication on accounts with financial information
• Checking your free annual credit report

Identity theft is usually a felony. However, it can be hard to find out who is responsible for online fraud. Report identity theft to the FTC and put a freeze on your credit with the credit bureaus.

What Are the Types of Phone and Internet Fraud?

Phone and internet fraud occurs when a scammer contacts you by phone or online to try to get your money. They may claim to represent a company you’re familiar with and trust, even though they don’t. Some scammers pretend to be from law enforcement and threaten you with arrest if you don’t pay a fine.

You can prevent yourself from falling victim to phone and internet fraud by doing the following:

• Never give out your personal information to companies that call or email you unsolicited. If someone calls saying they’re with your bank or credit card company, hang up and call your account holder directly.
• Never give out passwords to any of your accounts.
• Don’t agree to pay for an item or service based on one unsolicited phone call or email. Research the company and product first.
• If you can’t tell if an offer is real or not, ask for their contact information so you can take some time to look the company up. It’s a bad sign if they keep trying to pressure you to buy right away and won’t give you any names or contact information.

What Are Consumer Protection Laws?

Several state and federal laws protect consumers against fraud. Consumer protection laws require mandatory disclosures and prohibit deceptive business practices. Some examples of federal consumer protection laws include:

• Consumer Fraud Act
• Equal Credit Opportunity Act
• Fair Credit Billing Act
• Truth in Lending Act

The Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), and other government agencies enforce these federal consumer protection laws. There are also state laws that provide similar protections for consumers. State agencies or state attorneys general can enforce these state protections.

What Can I Do if I Am a Victim of Consumer Fraud?

If you’re a victim of consumer fraud, you can report the fraud to the FTC or your state attorney general. State and federal consumer fraud laws also give you the right to take legal action for fraudulent trade practices. You can file a lawsuit against a company for making fraudulent misrepresentations. Compensation can include money for your actual losses, statutory damages, and punitive damages.

A consumer fraud lawyer can negotiate with the company to help you recover compensation. Your lawyer can also file a fraud claim against the company for damages and to cover attorney’s fees. For more information about your legal rights, contact a consumer fraud lawyer for legal advice.