Consumer fraud can harm a person in many different ways. Be it a defective product or unfair trade practice, any malpractice related to a company’s products and services can be consumer fraud. A person suffering from consumer fraud can take legal help from experienced fraud lawyers and get justice. Every state has state laws involving consumer protection that can hold the accused liable for their actions.
Table of Contents
What is Consumer Fraud?
In legal terms, consumer fraud is a deceptive business practice that causes consumers to suffer financial or other losses. In such cases, the victims trust the business providers and believe they are participating in a legal and valid business. However, in reality, they are being defrauded. While false promises or inaccurate claims are common malpractices, practices that directly cheat consumers out of their money are also prevalent.
What is Consumer Protection Law?
The Federal Trade Commission Act is a consumer protection law. To safeguard consumer rights, FTC produced a Bureau of Consumer Protection. Its roles are collecting complaints, conducting investigations, and suing companies that break the laws. Protecting the public in specialized areas is also a responsibility of the FTC.
Who Is at Risk of Consumer Fraud?
Though anyone can be a victim of fraud, scammers usually target specific demographics. Senior citizens, novice entrepreneurs, and people in a large amount of debt are most likely to fall into the trap of scammers. Fraudulent calls from banks and insurance companies are usual, where the callers would tell about some new scheme and request the receivers to disclose their account details. Telemarketing and email are two techniques that are most common in customer fraud cases. Moreover, there are a host of other malpractices available on the internet that scammers can use nowadays.
In cases of defective medicine or consumer goods, any citizen can be at risk of consumer fraud. Companies that sell poorly manufactured or defective products and lead to consumer injuries or death should be charged legally. Some companies use deceptive advertising or fail to reveal some fees. In such cases, they are liable for compensations or settlements. One can take legal advice from experienced fraud lawyers to accuse the lawbreaker.
Who is a Consumer Fraud Attorney?
A consumer fraud attorney is a legal professional who solves cases related to consumer fraud and business malpractice. To profit from the extra expense of the consumer, many companies try deceptive techniques. The role of a consumer fraud lawyer is to safeguard the victim from these businesses by giving consultation and ensuring that the malpractice ends. The lawyers make sure that the consumers get compensation for any losses at the hands of these businesses.
Common Types of Consumer Fraud:
The Federal Trade Commission (FTC) states that almost 25 million people in America are victims of consumer fraud annually. The most common type of consumer fraud cases are:
- Advanced-Fee Loans: Sometimes, banks ask the customers to pay money in advance to secure a loan or a credit card. It is the most common cause of consumer fraud.
- Automobile Fraud: It occurs when an automobile company denies or fails to reveal the condition of a used vehicle and falsifies mileage by tampering with the automobile’s odometer.
- Breach of Contract: Purchasing a home, vehicle, or construction contract may involve a breach of contract.
- Buyers’ Club Membership Fraud: When a consumer has not agreed to join but is asked to pay for a buyers’ club membership or a publication, this type of consumer fraud takes place.
- Construction Disputes: It occurs when a buyer and the developer of a construction site have disputes regarding the project.
- Credit Card Insurance Fraud: To prevent the misuse of a credit card, when a company asks for money from its customers, it is known as credit card insurance fraud.
- Credit Repair Fraud: The customers should be more critical when they address issues with their credit reports. Credit repair fraud takes place when a customer gives out any personal information such as credit card details to random callers.
- Deceptive and Unfair Trade Practices Act Violations: All unfair trade practices should be charged with the help of experienced fraud lawyers.
- Defective Product Fraud: When a customer buys a product that does not perform as advertised, it can indicate defective product fraud.
- Illegal Bank Fees: Some bank fees remain undisclosed to the account holders. It may indicate illegal bank fees.
- Insurance Fraud: Sometimes, insurance companies try their best to deny insurance claims of policyholders who have become injured, suffered a property loss, or experienced another injury or disaster.
- Investor Fraud: This occurs when a person is recommended unsuitable investments. Investor fraud may also include misrepresentations and omissions, unauthorized trading.
- Multi-Level Marketing: To increase sales, some direct sales companies set targets for their existing distributors to recruit new distributors in exchange for a percentage of their sales.
- Prize Promotion Fraud: Asking performers to pay money to become eligible for a prize is a scam known as prize promotion fraud.
- Pyramid Schemes: As a form of consumer fraud, it asks consumers to pay a fee in advance and then recruits others with no products or services involved.
- Truth in Lending Act Violations: Any malpractice that violates the Truth in Lending Act (TILA) is known as a Truth in Lending Act violation.
- Unauthorized Contract Auto Renewals and Cancellation Fees: Auto-renewals have many claws that can harm a customer financially.
- Unauthorized Purchases on Credit and Debit Cards: If a card debit occurs suddenly, it can indicate unauthorized purchases on credit and debit cards.
- Unfair Repair Practices: The use of various deceptive, fraudulent, or unethical methods to obtain business is known as unfair repair practice.
Conclusion:
In 2020, The Federal Trade Commission in the US received more than 2.1 million fraud reports from consumers. The most common fraud reported was imposter scams. However, with the help of experienced fraud lawyers, a large section of the consumers got compensation or settlement for their loss and damage. Hence, it is crucial to know the different types of consumer frauds and seek legal help.