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Consumer Fraud

Anything that seems too good to be true probably is. Consumers reported losing more than $5.8 billion to fraud in 2021, an increase of more than 70% from the previous year, according to Federal Trade Commission statistics that were recently published. Consumer losses from imposter scams were more than $2.3 billion in 2020, up from $1.2 billion in 2018, with over $392 million of those losses were attributable to online purchases, up from $246 million in 2018.

These are worrisome statistics that are going up yearly. You must therefore be on the lookout for consumer fraud every day if you want to defend yourself from it. Consumer fraud is typically characterized as dishonest company tactics that result in losses for consumers, whether they be monetary or otherwise. Fraud against customers frequently includes actions that defraud them outright of their money, as well as activities that make misleading promises or erroneous promises to consumers.

Consumer Protection Law

Customers are protected by consumer protection laws from dishonest business practices, inferior goods, and possibly dangerous goods and services. A trustworthy market economy depends on consumer protection regulations to keep vendors honest and free from the prospect of unpleasant surprises. Laws protecting consumers against giant firms and tactics like adhesion contracts—which common law fraud does not address—are steadily changing as modern economies grow.

Various Laws That Protect Consumers

  • Fair Credit Reporting Act - Protects the information obtained by consumer reporting agencies, such as credit bureaus, companies that provide health information, and tenant screening services.
  • Dodd-Frank Act - This is a law that the U.S. Congress passed in response to activities committed by the banking sector that precipitated the financial crisis in 2007–2008. It attempted to increase the safety of the American financial system for consumers and taxpayers.
  • The Fair Debt Collection Practices Act - This act went into force in March 1978 and was designed to get rid of unfair, dishonest, and abusive debt-collecting methods. Additionally, it encourages continuous governmental action to protect consumers from unethical debt collection methods and safeguards honorable debt collectors against unfair competition.
  • Telephone Consumer Protection Act (TCPA) - Was passed to combat telemarketing calls and certain telemarketing strategies.

Healthcare Fraud

Healthcare fraud is not a victimless crime. Healthcare fraud affects everyone and costs the economy tens of billions of dollars every year. A health fraud scam occurs when a product claims to prevent, treat, or cure a disease or another health problem but hasn't been proven to be secure and efficient in those uses. Healthcare scams are expensive and may result in a delay in providing correct diagnoses and treatments. They are also capable of causing injury and even death. Examples of healthcare fraud and abuse include:

  • False promises about the delivery of goods or services.
  • Using the health insurance details of another person to purchase goods or services.
  • Falsifying signatures or medical records to support services or products that aren't what they're represented to be in advertising.
  • Denying services to a group in an effort to force up the price of medical care.
  • Misleading you to the location where goods or services are provided.
  • Provide medical assistance without a license.
  • Submitting duplicate claim forms.

Healthcare consumer fraud is seen in numerous schemes. Consumers' rights may be infringed upon by healthcare providers through insurance fraud, dishonest business practices, billing for services that were never rendered, outrageous pricing, and faulty or subpar products. 

Medical Malpractice In Healthcare Fraud

Medical malpractice can occasionally refer to a wide range of different forms of behavior. Healthcare fraud is regarded as medical malpractice in some circumstances, typically involving activities taken by medical personnel who use medical procedures to increase their financial gain. Each year, thousands of useless medical treatments that are frequently unrelated to the patient's problem are carried out by various healthcare professionals. These unnecessary operations are commonly carried out because insurance companies like Medicare, Medicaid, and even private insurance companies compensate the healthcare facility for lengthier visits and additional care for patients who need it to help prevent surgical complications. 

Dangerous Drugs And Devices

Pharmaceutical companies and drug manufacturers have a responsibility to develop safe pharmaceuticals and do all necessary tests to determine a medication's acceptability for human consumption. These businesses must list and forewarn of any potential adverse effects on the box so that consumers can make an informed decision regarding the usage of the drug.

Manufacturers of medical devices must also conduct all necessary tests to determine a device's level of safety and post any necessary disclaimers. If they don't, you or a loved one could suffer serious consequences or even suffer from wrongful death.

Vehicle Fraud

Automobile purchases are substantial investments that people should think carefully about before making. You should inspect and test-drive new cars before signing a sales contract, and most importantly, before setting foot on a dealership lot, you should conduct extensive research on the vehicle you want to purchase. Due diligence must be carried out in great detail with regard to the state of used cars as well as the terms of the sale. Any car purchase requires a fair dose of skepticism regarding the reliability of the dealer. Financing all or a portion of the purchase price raises a whole new set of issues related to consumer rights. Many of these dangers are covered by consumer protection laws, but customers must also take steps to protect themselves by doing their research.

Types Of Auto Dealer Fraud

Compared to dangerous or defective automobiles, as well as vehicles that do not satisfy the implied guarantees of safety or performance, auto dealer fraud raises different legal difficulties. Federal, state, and local goods liability rules, as well as regional lemon laws, apply to vehicles that are unfit for public sale. Fraud conducted by vehicle dealers is covered by laws that prohibit unfair or unethical commercial practices. 

When an auto dealer conceals a vehicle's used status, it is a common cause of auto dealer fraud. Even worse, the car dealer can give false information about the car's model year, its capabilities, or any known issues. Customers who are looking for a deal are pressured into accepting a different product at a higher price when deceptive trade techniques like bait and switch are used. Inaccurate information about manufacturer discounts, claims that the purchase price covers more than it actually does, and claims that a given price is book level or low when it is not are examples of other price misrepresentations.

Other instances of auto dealer fraud include charging hidden fees, misrepresenting warranties that come with the purchase, and failing to disclose known vehicle flaws. Additionally, dealers may tamper with odometers to conceal the real mileage of a vehicle that is up for sale.

Yo-yo financing is another frequent cause of auto dealer fraud claims. This problem occurs when a customer buys a car under the impression that the deal is done. For example, the buyer takes the car home, then the dealer contacts the buyers and informs them that the financing "fell through" and they would have to return the car unless they accept less enticing refinancing terms.

By rejecting forceful sales tactics, test-driving an automobile before buying it, and demanding a full visual inspection of a car, consumers can take safeguards to protect themselves. When purchasing a used car from a private seller, customers should look to have a mechanic inspect it and ask for the car's repair history.

Identity Theft

The theft of one's identity is a serious crime. It occurs when someone uses your personal information, such as your name, Social Security number, or credit card number, without your permission to conduct fraud or another crime. Every year, up to 9 million Americans have their identities stolen, according to the Federal Trade Commission (FTC).

Preventing Identity Theft

If you are careful to safeguard your privacy, identity theft can be less damaging. Here are some strategies for protecting yourself and your personal data.

  1. Secure your personal records - Make sure your personal information is stored safely, particularly if you share a home or employ outside help. This can be achieved by shredding confidential information, locking up valuables, depositing outgoing mail in a collection box or post office rather than an unsecured mailbox, collecting your incoming mail promptly, and never leaving credit, debit, or ATM card receipts lying around or discard them in public. 
  2. Protect your personal information online - Never divulge personal information, including your birth date, online or on social media. When a website is not secure, never enter important information on it. To tell if a website is secure, look for a security symbol like a closed padlock and a URL that starts with "https" rather than just "http."
  3. Use passwords and change them regularly - Use difficult-to-guess passwords for all of your internet accounts. Avoid using meaningless passwords like "123456789," "qwerty," your mother's maiden name, the names of your children, spouse, or pets, as well as other pieces of personal information.
  4. Be aware of Tele-Theft - If it's not absolutely necessary, never give out personal information over the phone without first verifying their credentials. If something appears too good to be true, it generally is. This is a useful principle to keep in mind. 

Defective Products

As a result of hazardous or otherwise problematic goods, thousands of consumers experience injuries every year. If you purchase a product that just does not function as advertised but does not actually injure you, you might be covered by a warranty or, at the least, have the option to return the item for a refund or exchange.

You are entitled to expect that any item you buy will be secure for the use for which it was intended. The right to use a tool safely is among the most basic understandings you should have. Large firms and product manufacturers are accountable for designing and producing safe products and including all pertinent disclaimers and warnings. You should consult a skilled defective product liability attorney if the manufacturer fails in this responsibility and hurts you as a result of a dangerous or defective product.

Simply put, you have a right to justice and financial recompense if a product's poor design or production causes you injury. You deserve a product liability lawyer who will stand up for you at this difficult time. 

Data Breaches And Consumer Rights

Customers routinely provide businesses access to personal information that is normally regarded as "private," including names, addresses, financial account numbers, health information, and other details. Our legal system has few regulations and enforcement tools to protect consumers from data breaches that could expose them to identity theft and other illegal activities. Similarly, the courts have given comparatively little recognition to a fundamental right to privacy. Most regulations that protect the privacy of a customer's personal information fall into one of two categories: either they prohibit illegal access to computer systems, or they protect certain types of information.

Data Breach

Any disclosure of private, sensitive, confidential, or proprietary information into an unsafe or unreliable environment is referred to as a "data breach." Anyone could access the information if it were made available on the internet, another computer, or a computer network. A person in charge of the data's security may have released the information on purpose or by accident, or it may have happened as a result of an unauthorized entry into a secured computer network.

Example Of A Data Breach

Per CNN: Business, in 2018, international hotel giant Marriott discovered that there was unauthorized access to the Starwood reservation system, a company that Marriott gained control over in 2016. The Starwood hotel line included properties such as the St. Regis, Westin, Sheraton, and W Hotels. For 327 million people, their information, including names, phone numbers, email addresses, date of birth, and reservation information, was leaked. This data breach is one of the biggest corporate data breaches in history, only second to the breach involving Yahoo in 2017

There is no magic solution to solve it like there is for any significant issue in the world. But everyone may contribute by making the proper decisions. Cyber security experts cannot resolve the problem without the public's help, the same as healthcare providers cannot maintain public health at acceptable levels if the majority of the community does not practice good hygiene. Data breaches can only be prevented by working together and considering our online security as our digital well-being.

List Of Agencies That Fight Against Fraud

  1. Consumer Protection Act - Is a guide for consumers that describes various scams, local or state tools for combating fraud, and what to do if a qualifying consumer concern comes up.
  2. Federal Trade Commission (FTC) - The FTC aims to safeguard customers by stopping unfair, deceptive, and fraudulent business practices in the marketplace and by instructing them on how to stop, identify and stay away from them. 
  3. OVC Elder Fraud Hotline - Is staffed with professionals who can help seniors or someone helping them file a complaint and individually connect with providers of critical assistance.
  4. National Center for Disaster Fraud Response - Is to improve criminal behavior associated with catastrophes like the coronavirus and other disasters, both natural and man-made, through better identification, prevention, investigation, and prosecution. It is a national coordinating body based in the Criminal Division of the Department of Justice.
  5. Internet Crime Complaint Center - Is a collaboration between the National White Collar Crime Center and the Federal Bureau of Investigation (FBI) with the goal of providing the public with a reliable and useful reporting mechanism to inform the FBI about alleged criminal activity that was facilitated by the internet and to forge strong relationships with law enforcement and business partners.

Consumer fraud is sadly on the rise in our culture. There isn't a day that goes by when we don't hear about identity theft, credit card theft, investment fraud, CEO embezzlement, and the everyday average Joe getting taken advantage of at the local car lot. Consider speaking with a knowledgeable consumer and business fraud attorney if you've incurred a monetary or personal loss as a result of unethical, unfair, false, deceptive, or misleading business conduct, whether it occurred online, in person, or over the phone.

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