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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 fraud1
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
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
types of deception and fraud1
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!
types of deception and fraud2
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
types of deception and fraud3
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
types of deception and fraud continued
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
too many faces of fraud
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
too many faces of fraud1
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.
slide10

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…
scams and fraud
SCAMS AND FRAUD

http://www.cbsnews.com/video/watch/?id=7398476n

scams and fraud1
SCAMS AND FRAUD
  • Follow the money
homework
Homework
  • Read the

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

homework1
Homework
  • Re-Read pages 108-112
    • Write the 1 page complaint letter
resolving consumer problems
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
resolving consumer problems1
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
resolving consumer problems2
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