Deception and FraudDeception and Fraud

Section 3.3Section 3.3

Deception vs. FraudDeception vs. Fraud

DeceptionDeception ExaggerationExaggeration LegalLegal MisleadingMisleading

FraudFraud DeliberateDeliberate Unlawful extremesUnlawful extremes

DeceptionDeception

Trading UpTrading Up Sale PriceSale Price Suggested Retail PriceSuggested Retail Price Loss LeaderLoss Leader

FraudFraud

Statement is fraudulent if:Statement is fraudulent if: Person making statement KNOWS it’s Person making statement KNOWS it’s

falsefalse Purpose of statement causes others to Purpose of statement causes others to

give up some value give up some value Proving fraud is difficultProving fraud is difficult

Was it a mistake?Was it a mistake? Was there intent?Was there intent?

Best advice is to avoid fraudBest advice is to avoid fraud

When it seems too good When it seems too good to be true…to be true…

……it probably is!!it probably is!!

Types of FraudTypes of Fraud

Bait and SwitchBait and Switch Pyramid SchemesPyramid Schemes

Chain lettersChain letters Memberships, not productsMemberships, not products Airport schemeAirport scheme

Telephone (& Internet) FraudTelephone (& Internet) Fraud

Pyramid SchemesPyramid Schemes

Telephone FraudTelephone Fraud

Too good to be Too good to be truetrue

Request for credit Request for credit card or ss#card or ss#

Buy for something Buy for something freefree

Refusal to send Refusal to send written written confirmation or confirmation or informationinformation

Pressure to act Pressure to act now or offer now or offer expiresexpires

Refusal to identify Refusal to identify themselves or themselves or companycompany

Refusal to provide Refusal to provide company info company info (phone, address)(phone, address)

Telephone TechniquesTelephone Techniques

Drop famous namesDrop famous names““Having lunch with Michael Jordan was Having lunch with Michael Jordan was

great…”great…” Use terms of endearment, emotionsUse terms of endearment, emotions

““I lost my mother and you remind me of her.”I lost my mother and you remind me of her.” Suggest lack of powerSuggest lack of power

““May I talk to the decision maker?”May I talk to the decision maker?” Use guilt tripsUse guilt trips

““I’ve already spent an hour with you…”I’ve already spent an hour with you…” Pressure to make quick decisionsPressure to make quick decisions

““We only have two left…”We only have two left…”

Telephone AdviceTelephone Advice

Ask for time to think about itAsk for time to think about it Ask for information be sent to youAsk for information be sent to you Ask for their number and call backAsk for their number and call back Ask for referralsAsk for referrals

More Faces of FraudMore Faces of Fraud

Health-care products that cureHealth-care products that cure Home improvement charging fees up Home improvement charging fees up

frontfront Vacation clubs promising cheap Vacation clubs promising cheap

vacationsvacations REALLY inexpensive repair workREALLY inexpensive repair work Weight loss programs appearing Weight loss programs appearing

unrealisticunrealistic Piggyback scamsPiggyback scams

Protect YourselfProtect Yourself

Be skeptical!Be skeptical! Ask questions!Ask questions! Research companiesResearch companies Research productsResearch products Use your head, not your “heart”Use your head, not your “heart”