What Is Consumer Fraud?

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Consumer fraud is a broad term used to describe any intentionally deceptive act, statement, or practice which harms consumers.  Victims of consumer fraud may pursue both civil and criminal penalties against the perpetrators.  A consumer fraud complaint may be made at the federal, state or local level depending upon the nature of the offense.

Types of Consumer Fraud

No industry is immune from consumer fraud.  And in many instances, businesses are started with the specific intent to bilk unsuspecting consumers out of their money.  However, many legitimate businesses are accused of consumer protection violations everyday.  Consumer fraud complaints are frequently made with respect to the following industries or businesses:

  • Banking – Bank consumer complaints usually involve imposition of NSF and other fees.  Bank consumer complaints may also be made in relation to how banks handle debits from and credits to checking accounts and in relation to deceptive marketing practices.
  • Consumer Credit Counseling – Most consumer credit counseling complaints relate to the credit counseling company's mishandling of customer accounts.  According to the FTC, consumer credit counseling complaints also often include allegations that providers mislead consumers about who they are, what they do, and how much they charge for their services.
  • Internet – Cyber-crimes, such as identity theft, have given rise to hundreds of thousands of Internet consumer protection complaints.  Such cyber-crimes are so prevalent that the FTC and many state governments have created task forces whose sole purpose is to investigate these crimes and enforce Internet consumer protection laws.
  • Insurance – Insurance consumer complaints commonly involve illegal practices such as red-lining, use of deceptive marketing practices, and refusals by insurance companies to pay claims.  Insurance consumer complaints may also be made as a result of unfair policy cancellations and inexplicable increases in premiums.

Fraud Insurance Claims

Due to the rise in identity theft, the number of fraud insurance claims has risen dramatically. Identity theft protection insurance is meant to protect consumers from the incredible damage this crime does to their credit, finances, and reputation.  Fraud insurance claims allow insureds to recover at least a portion of the money stolen from them as well as lost wages and the costs associated with proving the theft and restoring their credit and reputation.

Consumer Rights Refund

Many consumers believe that they have an automatic right to return a product and receive a refund.  However, most retailers have very strict return and refund policies.  Many states have consumer rights refund laws which impose a rescission or cooling off period that allows a consumer to return merchandise within a specific period of time and receive a full refund.  In most jurisdictions, the consumer rights refund cooling off period is 3 days.  

Getting Legal Help

If you have been the victim of consumer fraud, you need a knowledgeable consumer rights attorney to assist you in obtaining the legal relief to which you are entitled.  State law governs how long you have to pursue a consumer fraud claim.  Therefore, you must seek legal help immediately in order to protect you rights.