Consumer fraud

These are generally deceptive practices that result in financial losses for consumers in the course of seemingly legitimate business & investment transactions.

Many people think that consumer fraud only affects innocent or unsuspecting people who perhaps have not fully investigated the full facts of the investment or opportunity put to them, but in truth, even the most intelligent customers can be duped & fall victim to a fraud. It may be as simple as finding deductions from your bank account that you have not agreed to after signing up for a free trial online or getting stuck paying a higher rate for a subscription for a magazine or a newsletter you agreed to sign up for, having funds taken  or it may involve losing a larger sum of your hard earned cash in an investment proposal that used deceptive practices to get the investment from you or even having one’s identity stolen altogether if you have handed over personal information to less than honourable individuals.

Consumer fraud can take place over thetelephone, through mailshots, in person or more commonly now over the internet. As technology  has continued to improve Internet fraud has risen faster than any other type of fraud in more recent years. With or without technology, however, consumers can protect themselves against fraud by following some simple steps.

Identity theft

Identity theft now accounts for around 40 percent of all fraud reported. Even in its mildest form it can involve a great deal of stress and time to put things right. In its most serious form, a thief who gains access to a victim’s National Insurance or Social Security number and some other basic information, a thief can create a double identity of the victim whereby the victim’s information can then be used to make purchases on credit cards or catalogues, to rent an apartment, or even take out bank loans. Often,victims of identity theft only find out their misfortune when they receive credit card or other bills demanding payment, even though they had neither opened the accounts nor made the purchases. .

Identity thieves can gain access to their victim’s information by copying it from forms for example, if they work in an office where such information is kept, by stealing a wallet or personal papers, or by otherwise exploiting a careless individual.

Fraud experts warn people never to give their Social Security or bank account numbers to someone who has phoned them,even if it appears they are from a seemingly legitimate business. Often identity thieves work in gangs using the internet as their tool of choice, which makes it difficult to track them down, so, even when a theft ring is cracked, others quickly crop up to take its place, if only one or two of the individuals is tracked down.

Telephone and Mail Solicitations

Every day, people are contacted by telephone and mail with phony offers & it is becoming increasingly more difficult to decipher the real opportunities from the fraudsters well thought up cunning plans to relieve people of their hard earned cash. Despite warnings from consumer-advocacy groups, people continue to provide personal information including credit card details, their bank information, and sometimes even their Social Security numbers to companies & individualswho they do not know.

The elderly are often a common target, in part because once they find that they have been defrauded they either do not know how to (or sometimes refuse to) report the crime because the process can be very long and complicated or they are simply too embarrassed. To most people, junk mail and telemarketer calls are merely a nuisance, but unscrupulous companies & individualsuse many methods to part innocent people from their money.

Some investment companies have found their websites cloned or other companies set up using their legal identity or a name so similar to a well known organisation that an unsuspecting investor may be fooled in to handing over funds to them unaware they are dealing with fraudsters. Some are seeking investments from individuals into commodities such as diamonds, fine wine, property that do not even exist but they ensure their brochures and websites appear sophisticated enough to con even the most sophisticated investors.

 Applications for credit cards or personal loans promise easy credit, but the fine print will often reveal exorbitant interest rates not fully explained in the salespersons script to get you to sign up.

Charities use telemarketing and mass mailings to ask for donations; while some of those charities are established and legitimate, others are dubious. Many phony charities use names similar to those of registered and well known charities in the hope of duping people.

Mailshots from others including sweepstakes or foreign lotteries promising millions in  winnings which await the lucky recipients, ensure some poor individualsoften feel compelled to send an order for several magazines along with the prize receipt or dial numbers to collect their prizes that are charged at exorbitant fees up to £4.50 per hour or more in order to claim their ‘prize’.

Although it is not possible to stop the mailshots and unfortunately anyone who signs up for any of these offers may well have their name and address passed on to other fraudsters by means of a ‘suckers list’ sold from one fraudulent group to others for an easy profit if they have signed up to or agreed to anything in the past – it is possible to have your store their telephone numbers made ex directory or stored on a centralized database that telemarketers are prohibited from calling. A telemarketer or telemarketing company who calls a prohibited number will often face stiff fines if later reported for ignoring the regulations.

Internet Fraud

The growth of the Internet in recent yearshas also meant its growth as an instrument of fraud. In the USA it was estimated Internet fraud accounted for $17.8 million in losses, with an averageloss of $435 per victim in 2001 the figures are far greater now as the depth of the scammers and hackers knowledge has increased over the past 15 years.

The most common type of fraud, at that time accounted for nearly two thirds of all reported fraud was Internet-auction fraud as consumers looked for ways to save on the cost of purchases of electronic and other goods. Although there are a number of legitimate online auction houses, there are many that are simply outright scams. Many of the scams meant purchasers had to buy ‘bidding coins’ and very often consumers who attempted to purchase items on these sites found that the goods they bid for never existed,  or that the seller has added numerous hidden charges on top of the bid price or that the goods were often second hand or even stolen. Some auction sites /sellers even act as a plant or a stooge by placing false bids in order to increase the price of the bids.

The Internet is now  home to a myriad  of scams  including credit card scams, investment scams, inheritance scams, lottery scams, home-improvement scams and identity theft of unsuspecting individuals who complete online forms willing handing over their private information& details.

These scams often appear legitimate and often appear as sleek  sophisticated web sites others are  sent in the form of mailshots or unsolicited commercial e-mail (UCE), better known as spam.

One common spam message was the Nigerian Letter, in which the person who claimed to be a former high official, often from the Nigerian government, and was seeking help in converting millions of dollars in funds often from an inheritance in the name of someone who had died with a surname the same as the person targeted. The consumer or ‘mark’ is asked to provide bank account information so that the funds can be transferred to their account for a share of the proceeds. Unsuspecting people thinking they were acting as good Samaritans looking to maker a quick buck by simply processing a claim then found their accounts raided.


Taxpayers also need to be on guard against tax scams that can result in loss of funds and, in some cases, legal difficulties. Some con artists make money at their victims’ expense by claiming that they can help to secure tax refunds for their clients.Invariably, the clients must pay an  up-front feet.

One example beingcompanies that claim they can help taxpayers find legal loopholes that will allow them to stop paying so much or indeed any taxes. Another was an American company that offered to help people submit claims for nonexistent credits. Some African-Americans have been targeted by a ‘reparations scam’  in which numerous individuals weretold they could apply for a slavery-reparations credit simply by paying a fee when no such compensation or credit even existed.

If the taxpayer knowingly engages in a scheme that is illegal (for example, signing up for a new Social Security number in order to avoid paying taxes, he or she may face large fines or even imprisonment in that they are knowingly committing a fraud themselves.

Combating Fraud

Education and due diligence is key to combating consumer fraud and since the process for complaints and retribution is a lengthy and often costly one it is wise to conduct as much research on the companies and/or individuals as possible before handing over any personal information or funds.

Although the FCA, Action Fraud and other consumer groups  all work to educate the public and to identify fraudulent businesses, the fraudsters are increasingly shutting down and starting up new scams to relieve people of their hard earned money sand now even their pension pots given the recent relaxation in pension matters.

We believe that consumers deserve a better alternative than the complaint process currently on offer which often takes months, going through the correct channels to no avail.
CPI now offers a complete investment checking process including background checks on both the organisations and individuals behind it  for a small monthly fee of £19.95, which also includes an informative monthly newsletter with all the latest scams and measures to protect oneself.
although there are many regulated and reliable investments out there, most people do not begin a decent due diligence process until they have already invested and they have reason for concern. often finding then it is simply too late.
The authorities can really only advice after a scam or a capital loss has been made.
Given that many organisations are not regulated and even those that are regulated invariably their day to day business practices are not regulated on a day to day basis as regulation would lead you to believe and in the event of a financial loss or any unscrupulous actions against it’s clients an in  depth analysis and report are often needed prior to the official complaint which can take months or even years.
Whilst government bodies such as Action Fraud and the F.C.A’S do offer assistance to help it is normally after the event when the client has already made a capital loss and the process can take months to process.
CPI has now been set up to offer a complete research  in advance of investment service to try to combat loss before investment, back grounding previous successes and failures thereby reducing the risk to you the investor.
Our Consumer Fraud Legal Services provides the best answer by focusing exclusively on helping consumers fight back against the increasing amount of fraud committed by fraudsters and big businesses.

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