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DECEPTION AND FRAUD

DECEPTION AND FRAUD . CH. 3.3 & 3.4. DECEPTION AND FRAUD . DECEPTION: when advertising purposefully misleads you FRAUD: deliberate deception, designed to secure an unlawful gain Who is this guy . Types of deception and fraud. Trading up:

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DECEPTION AND FRAUD

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  1. DECEPTION AND FRAUD CH. 3.3 & 3.4

  2. DECEPTION AND FRAUD • DECEPTION: when advertising purposefully misleads you • FRAUD: deliberate deception, designed to secure an unlawful gain • Who is this guy 

  3. Types of deception and fraud • Trading up: • The practice of pressuring consumers to buy a more expensive product • EX: you go to Best Buy to purchase a DVD player, and the salesman gets you to buy a better brand with more functions • Loss Leader: • The practice of raising the normal price, and then lowering it in order to call it a “sale” • EX: Finish Line raises a pair of Jordan’s to $120, that is normally $100, then puts them back to $100 and calls it a sale

  4. Types of deception and fraud • Sale price: • A sale is a sale only if the price is below the regular price. • Can be deceptive: if the store raises the price for a day or two then lowers it and calls it a sale • Suggested Retail price: • A manufacturer’s suggested price is usually higher than any retailer expects to actually get for a product. • Ex: Cars!

  5. Types of deception and fraud • Bait and Switch: • The practice of baiting consumers with an advertised, but nonexistent bargain and then switching them to a more expensive product. • My example at office depot – shredder – • Pyramid Schemes: • A type of financial fraud in which people pay to join an organization in exchange for the right to sell memberships to others • Pyramid scheme

  6. Types of deception and fraud • Internet and Telephone fraud: • The many different methods of scheming people out of money over the phone • http://www.youtube.com/watch?feature=player_embedded&v=G3p79-M0lHY.com • Some things to look out for when an offer is made to you online or over the phone: • Too good to be true www.lookstoogoodtobetrue.gov • Asked for your social security card or credit card number • Must buy something to get something else of greater value for free

  7. Types of deception and fraud continued… • Not offered a written contract or sales agreement • You are supposed to act immediatelyor the offer will expire quickly • No method is offered to contact the organization • No information about the organization’s business record is available

  8. Too many faces of fraud • Here are some scenarios that should bring out the skeptic in you: • Healthcare products that promise to cure incurable diseases • HEALTHY CEREAL? • Home-improvement contractors who want you to pay most of the cost before they do the work • Holmes on homes

  9. Too many faces of fraud • Vacation clubs that require you to send money to join with the promise of inexpensive 1st class vacations later • Repair work offered at well below the going rate • Weight-loss programs that promise unrealistic results.

  10. Lets talk about any scams that you have encountered… or your parents. • Were they similar to these? • How were they resolved? • How about internet fraud? • Have any of you tried to deceive anyone… • we are all friends here…

  11. SCAMS AND FRAUD http://www.cbsnews.com/video/watch/?id=7398476n

  12. SCAMS AND FRAUD • Follow the money

  13. Homework • Read the “ID Thieves’ New Tricks: Cybercriminals are getting smart. You can too” packet and be prepared to discuss it.

  14. Homework • Re-Read pages 108-112 • Write the 1 page complaint letter

  15. Resolving consumer problems • HOW TO RESOLVE THE PROBLEM • Wait approximately 3 days to ‘cool down’ • Use facts, no emotions, to solve the problem • Keep your receipt! • Decide what you want before you complain

  16. Resolving consumer problems • THE COMPLAINT PROCESS • Take it slow • Start with the Seller • Go to the store • Talk to the manager • Email / write the manufacturer • Contact a consumer group or professional organization • Media help • Check online, sometimes there is a way to resolve problems through the website

  17. Resolving consumer problems • Government Involvement • Lawsuit • You may contact a lawyer and take the claim to court • Small Claims court • Different states have different maximums ($1000-$10,000) • You do not need a lawyer for this court • If you lose, you have to pay the fees of the person you are suing

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