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 What Is Criminal Fraud?

Criminal fraud involves a scheme that is intended to cheat or deceive another person or entity, in order to obtain a financial or similar type of gain. It is considered to be a white collar crime; or, a variety of non-violent crimes generally committed in a commercial or business context for financial gain. The majority of these crimes are prosecuted by the federal government, and as such are considerably serious in nature.

Under criminal fraud law, any action intended to deceive another person through false representation of fact resulting in legal detriment to the person who relied on the information, can constitute an act of criminal fraud. To put it more clearly, if a person knowingly lies about a key fact and the other party relies on that misrepresentation of fact which causes harm, fraud has occurred. However, it is important to note that fraud does not occur when a person provides a fact that they actually believe to be true, even if they are incorrect.

The core elements of fraud in both civil and criminal fraud cases are the same. However, a criminal fraud conviction generally results in fines and/or jail time. Additionally, criminal law requires a higher standard of proof for proving fraud, which is beyond a reasonable doubt. What this means is that each element of the crime must be proven beyond a reasonable doubt in order for the defendant to be convicted of fraud.

Criminal fraud causes are not determined by whether or not the fraud was actually successful. The simple fact that a person attempted and intended to commit fraud is enough to constitute a fraud charge. Based on the jurisdiction, as well as the fact of each specific case, criminal fraud can be charged as either a misdemeanor or a felony crime.

In civil fraud cases, the victim must prove all fraud elements and prove that they have suffered damages resulting from the fraud. The overall difference between a civil and criminal fraud case would be that in a civil case, the victim must prove actual damages while in a criminal case, the prosecution must only prove that the defendant attempted fraud.

What Is Consumer Fraud?

Consumer fraud is considered to be criminal fraud under specific circumstances. In consumer fraud, the victim is the consumer while the perpetrator can be either a seller or advertiser of merchandise. So long as the fraud is associated with some type of services or goods, it could be considered consumer fraud.

Consumer fraud can also be described as deceptive business practices causing consumers to suffer financial or other similar losses. The victims of consumer fraud are led to believe that they are involved in a legal and valid business transaction, when in reality they are being defrauded in some way. Fraud against consumers is generally associated with false promises and/or inaccurate claims made to consumers, but also includes practices that directly cause consumers to be cheated out of their money.

The Federal Trade Commission, or FTC, is responsible for accepting complaints against businesses that have possibly committed consumer fraud. They work with law enforcement in order to investigate fraud, as well as unfair business practices against consumers. The FTC will be further discussed below.

What Are Some Examples Of Consumer Fraud?

Consumer fraud covers a broad range of activities. Some of the most common examples of consumer fraud include, but are not limited to:

  • Sellers failing to provide merchandise in an adequate manner, such as how a car dealer who sells lemon cars could be found guilty of committing consumer fraud;
  • Sending merchandise to people without their knowledge and consent, and then forcing them to pay for it by threatening to bring legal action against them or ruin their credit score;
  • Sweepstakes and lotteries offering a prize if you pay a “fee,” and then failing to deliver the prize; and
  • Charities or representatives who are pretending to be working for a good cause by asking you for a donation, that is then pocketed or distributed somewhere other than where they originally claimed.

What Is The Federal Trade Commission?

As previously mentioned, The Federal Trade Commission (“FTC”) is closely associated with consumer fraud. As such, it is useful to understand what the Commission does.

The Federal Trade Commission was established by the Federal Trade Commission Act in 1914. It is intended to protect consumers, as well as prevent specific business practices which take advantage of consumers and squeeze other businesses out. An example of this would be how the FTC regulates companies from forming monopolies, or dominating the market; this is also known as antitrust regulation.

The FTC protects both consumers and businesses. The following are a few example of activities that the FTC undertakes:

  • Protecting consumers from false advertising, as well as other forms of fraud;
  • Enforcing a variety of laws associated with consumer credit;
  • Regulating business marketing and warranty practices;
  • Enforcing existing laws and trade regulation rules; and
  • Developing new rules intended to protect the marketplace.

Overall, the FTC attempts to ensure that the markets are vigorous, efficient, and free of restrictions. Because of this, the FTC enforces consumer protection laws intended to prevent fraud, deception, and unfair business practices.

The Bureau of the FTC is responsible for further enforcing rules that were created by the FTC, as well as laws enacted by Congress associated with consumer protections. Some examples of its actions include:

  • Collecting complaints;
  • Conducting investigations;
  • Suing companies and individuals who break the law;
  • Creating rules intended to maintain a fair marketplace; and
  • Educating consumers and businesses regarding their market rights and responsibilities.

What Should I Do If I Am A Victim Of Consumer Fraud?

In terms of preventing consumer fraud, there are some common signs that should alert you that you may be experiencing consumer fraud. Some of the most common examples include:

  • High pressure sales tactics, such as not taking “no” for an answer or pressuring you to make an immediate decision regarding the purchase;
  • Requesting that you send money upfront;
  • Requesting unnecessary personal information, such as a credit card number;
  • Requiring you to call a “900” or similar number in order to obtain goods or a prize; and/or
  • Being intentionally vague and/or evasive about their name or company.

There are many different people and organizations that can help if you are a victim of consumer fraud. Consumer fraud hotlines and websites allow you to detail the issues and file complaints.

If you believe that you are a victim of criminal fraud, you should contact your local law enforcement immediately in order to report the fraud. The case will be forwarded to the local prosecutor or District Attorney’s office for prosecution if there is sufficient evidence to move forward. You should also keep records of any and all losses associated with the fraud, as this may be especially important where restitution is a potential penalty.

Do I Need An Attorney For Consumer Fraud?

Whether you are being accused of committing consumer fraud, or you are the victim of consumer fraud, you should consult with an experienced and local fraud attorney. A local lawyer can help you understand your legal rights and options according to your state’s specific fraud laws, and will also be able to represent you in court, as needed.


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