FCS 226 Frauds and Ripoffs

FCS 226 Frauds and Ripoffs - Fraud/Ripoffs Fraud/Ripoffs...

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Unformatted text preview: Fraud/Ripoffs Fraud/Ripoffs Have you ever been a victim? Why does Fraud (or Ripoffs) exist in the marketplace? in Dfns: Fraud: deliberate deception, unfair or unlawful advantage, consumer suffers financial loss. Deception: the perversion of truth, most often, intentional, that results in a person, having been misled, parting with something of value for something of no or little value (puffing or quality exaggeration is not considered fraudulent by the courts) Terms continued… Terms Ripoff: Unfair acts of exploitation in the marketplace (not illegal), largely due to a lack of information Why do deceptions work? Why do deceptions work? Capitalistic market gives the advantage to the seller. Consumers believe false advertising. Many sellers, including so called “reputable” firms, occasionally try to rip off consumers Consumers can be greedy. Remedies Remedies be aware that large profits mean large risks check out the company’s credentials before committing, call BBB (Telemarketing) hang up Never give information over the phone or internet unless you are confident Remedies continued… Remedies Use your credit card and dispute charges if need be Caveat Emptor – Let the buyer beware Sources Sources Local/State Attorney General’s Office The BBB Media Mayor, Senator, State Representatives Sources continued… Sources Federal/National Federal Trade Commission Food and Drug Administration Office of Consumer Affairs National Consumers League Consumer Product Safety Commission Consumer Information Center U.S. Postal Service A Few of the Many: Few Arthritis Products Cancer Clinics AIDS cures Weight Loss Schemes Sexual Aids Negative Option Plans (Beware) Baldness/Wrinkles Work at home plans Sweepstakes/Lotteries continued… continued… Travel Related Frauds and Ripoffs Automobile Rental Companies Careful with prices/hidden fees/insurance Muscle Stimulators Medical Frauds – always get a second opinion Charities Nigerian money offers Fake Checks continued… Health Products Phony Bills Going out of business sales Home improvement frauds School fundraisers Door­to­door sales (cookies, magazines, etc.) Freezer Meat Degree Mills Term Papers continued… continued… Auto repairs, NHTSA survey found that more than half of all repairs were unnecessary or overpriced *Put auto repair on credit card, federal law allows withholding of payment if the repair was not done properly (restrictions apply and it must be at least $50) talk to credit card company Never. . . Never go listen to a sales presentation Never buy on impulse Never buy in a hurry Never send cash or money orders Never pay in advance Keep in Mind Keep If it sounds too good to be true, it is. There is no such thing as a free lunch. Ripoffs are unfair, but not illegal. Fraud or Ripoff ExamplesCooperative Knowledge Cooperative Three examples per group 1.) What is the nature of the fraud? 2.) What slang terminology is involved, if any? 3.) What recommendations do you have for consumers (prevention, reaction for victims)? ...
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