Consumer fraud not only affects consumers and businesses but also the economy. According to the National Retail Security Survey, nearly 41% of the retail chain revenue loss was due to employees ( insert bibliography 2 ).
The Federal Trade Commission was created in 1914; it has helped create many different policies for consumer protection rights. Some companies have a 100% satisfaction guarantee where customers can return items if they are unhappy, Bass Pro Shop would be an example. Consumer fraud is when a consumer is trying to achieve a gain from a company.
Not all times the company can prove this type of fraud. Some acts of consumer fraud can be legally prosecuted such as shoplifting. A consumer that is tricking a company into an economic advantage and understands what they are doing is engaging in a guile activity, which is a type of consumer fraud ( insert bibliography 3 ).
An example of a guile activity would be returning an already worn piece of clothing and getting the purchase amount back. Consumer fraud can be clear to determine, but it can also be very difficult to see if there is not enough evidence to support the accusation.
Consumers have become creative over the years to better manipulate companies to achieve the consumer’s gain. In 2005, the Federal Trade Commission reported, more than 25 million consumers annually engage in consumer fraud (insert bibliography 4).
Insurance fraud - whether committed by sophisticated criminals, otherwise honest consumers, or by insurance company employees and owners - is an increasingly expensive burden on the U. S. economy, taking money out of the pockets of all citizens. This illegal activity diverts vital resources away from businesses, law enforcement, the civil justice system, regulatory agencies and local emergency ...
Because of the current economy consumer fraud reports have increased tremendously. Credit repair consumer fraud refers to paying someone to remove personal negative credit history, which is illegal in the United States. In 2004, the Federal Trade Commission surveyed random adults that claimed to have nearly 2. million incident reports of credit repair fraud ( insert bibliography 4).
According to the Federal Trade Commission Survey of 2006, it was recorded that 30% of consumers did not complain to anyone about their report consumer fraud incident ( insert bibliography1).
Most of the consumers who did file reports made them to the company or manufacturer when they were supposed to report them to the government for legal reasons. Government and other companies, such as the Federal Trade Commission, are trying to decrease the amount of incidents regarding consumer fraud and the ability for individuals to engage in consumer fraud.
Because the United States is currently in an economic depression, consumer fraud has risen to pay bills or find new ways to have an economic advantage. Consumers have also become more creative with acts of fraud, which makes it more difficult to prove whether the consumer engaged in the activity or not. There are various negative impacts from consumer fraud. Consumer fraud can negatively impact the reputation of a company by leading a customer into false acts. An example if this would be a company promising new customers a promotional gift for buying a product but then the consumer never gets the gift.
But, if a consumer engages in collusion consumer fraud, an employee can be terminated for putting an item not purchase by the consumer in his or her bag or by giving the customer an unwarranted discount. Collusion consumer fraud is generally an accident on the employee’s part, but it can still result in the employee’s termination. Many companies want to create loyal customers, but if a customer sees another consumer get away with customer fraud, it might make that customer look at the company in a different, sometimes negative, manner.
If a consumer creates a staged accident to gain money from a company, the consumer is engaging in duplicity consumer fraud. Duplicity consumer fraud can cause an economic turmoil for companies, but an economic advantage for that consumer. It creates a negative reputation for the company. Someone who engages in consumer fraud tends to only be focused on his or her personal outcome, such as economic gain, and not how it might affect other consumers, businesses, or the economy. Individual and organizations that engage in consumer fraud have multiple reasons, seen by them as positive reasons, for engaging in these deceitful activities.
Brookshire Grocery Company, known for its commitment to excellent customer service, was established in 1938. The company began with one store in downtown Tyler, Texas under the name Brookshire Brothers. Soon after, the company changed its name to Brookshire Grocery Company and expanded to four stores in Tyler and Longview, Texas, which included the first air-conditioned store in East Texas (brooks ...
For the most part, consumers see the main positive reason for engaging in consumer fraud of achieving an economic advantage. , Some consumers lie to obtain age discounts or privileges. A consumer might lie to a company employee about his or her age to get a discounted movie ticket at the movie theater for a senior price. Consumer fraud is a highly unethical action by consumers. Consumer fraud not only steals from the companies but also other individuals. Consumer frauds entail an individual or organization to knowingly and intentionally deceive an organization for an economic advantage.
Consumer fraud is unethical because some consumers know the difference between right and wrong, but they do not care because they just want their personal, economic gain. These consumers do not factor in the implications of their unethical behaviors and the impact that their behaviors have on other consumers, companies, and the economies. Because the United States economy is in a depression, many consumers see it as an opportunity to try to gain economic advantages over companies by engaging in consumer fraudulent activities.
Although consumers intentionally engage in consumer fraud, they might have other motives for engaging in those consumer fraudulent activities. Federal Trade Commission. (2013, January 5).
www. ftc. gov/ftc Ferrell, O. C. , & Fraedrich, J. (2012).
A few weeks ago CSE came out with a report on Cola brands in India claiming they had a very high Pesticide content. Although the report got struck on the issue of which standards to use the WHO's or the EU's, but one thing is for clear that the pesticide content is much higher than the EU limits in almost all the tests. So this is a case of breach of consumer trust, but what was the effect just a ...
Business Ethics: Ethical Decision Making & Cases. South-Western Pub. Geis, G. , & Edelhertz, H. (1972).
Criminal Law and Consumer Fraud: A Sociolegal View. Am. Crim. L. Rev. , 11, 989. Norrgard, L. E. , & Norrgard, J. M. (1998).
Consumer fraud: A reference handbook (pp. 31-32).