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Consumer Fraud

It is an unfortunate reality that business and industry often value profits over consumer safety and fair dealing. Some of the examples of this reality include:

  • defective products which injure or kill or which don't work properly
  • advertising misrepresentations of the quality of merchandise
  • "bait and switch", purposely-confusing consumer contracts, and other retail fraud
  • "fly by night" businesses
  • unfair or harrassing debt collection practices
  • Ponzii or pyramid schemes, or chain letters
  • bad faith denial of insurance coverage
  • unlawful insurance premium surcharges
  • investment scams
  • quackery and other unscrupulous conduct in the medical, legal, building and construction, bug exterminating, pharmaceutical, and accounting fields, among others
  • fake charitable causes
  • unlawfully high interest rates or other usurious charges for consumer credit
  • "redlining" or other discrimination in real estate sales and rentals
  • "lemon" automobiles

Far too many people - whether through ignorance or embarassment over having been defrauded - fail to seek out the proper advice and counsel after being victimized by consumer fraud. There are, however, many avenues through which a defrauded individual can obtain relief:

  • the local Better Business Bureau
  • the state Attorney General's Office
  • local consumer groups
  • national consumer groups, such as those affiliated with Ralph Nader
  • a private attorney

Private attorneys and state Attorneys General Offices are empowered by various legal provisions to call unscrupulous businesspeople to account for their fraudulent or deceptive practices, either through a private lawsuit or through a criminal proceeding. Most states have strong Unfair Trade Practices or Consumer Protection laws on the books that allow a victim of fraud or deception to obtain restitution. Some laws provide for stiff fines for fraudulent business practices, and others provide that a defrauded individual is entitled to triple the amount of the money he or she was swindled out of. Unfair Insurance Practices laws and "Lemon" Laws are on the books on most states, as a result of the frequency of abuses in the insurance and automobile industries. Even if your state does not protect its citizens with such laws, a private attorney can always pursue a lawsuit for simple fraud.

Proving fraudulent and deceptive business conduct is not easy. Those who make their living by defrauding others are often very sophistocated and have taken various steps to make it difficult to find them and to gather evidence of their fraudulent conduct. An attorney competent in unraveling fraudulent and deceptive schemes will know the many resources available to him or her to

  • identify the persons responsible for the scheme
  • determine the various corporations or other business entities under which the perpetrators operate
  • identify co-conspirators
  • gather documentary evidence of the scheme
  • gather evidence of the fraudulent intent of the perpetrators and a continuing course of fraudulent or deceptive conduct
  • find other instances of fraud and deception committed by the perpetrators and other victims whose testimony can bolster the case

It would be an uncommon occurrence if an unscrupulous businessperson unleashed a fraudulent or deceptive scheme on just one person. Therefore, the law permits groups of similarly defrauded people, called a "class", to sue as a group in a lawsuit called a "class action".

Relevant Links

This informational piece was prepared by Silverman & Fodera. If you would like more information on this topic, call us at (800) 220-LAW1, or use the "Do I Have A Case?" link on this web site.