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Donít Be a Victim of Consumer Fraud

Consumer fraud is big business.

In 2014, U.S. residents age 12 or older experienced an estimated 15.3 million property victimizations, according to the Bureau of Justice Statistics’ (BJS) National Crime Victimization Survey. 

TURN TO THE FTC
The Federal Trade Commission is a great resource for questions about possible consumer fraud.
Website: ftc.gov or
call 877-FTC-HELP
(877-382-4357).

There are many different types of crimes involved, including tax refund scams, fraudulent weight-loss programs, phony lottery or prize schemes and bogus work-at-home scams. You don’t have to be a victim, however.

The Texas Society of CPAs recommends steps you can take to avoid being taken advantage of.

DON’T BE TAKEN IN BY APPEARANCES

Scam artists and phony organizations are very good at presenting a professional image. The person at your door may be clean cut and friendly, the voice on the phone may be well spoken and the mail offer you receive may be glossy and appealing.

The person you speak to may also have very reasonable answers to any tough questions you ask. In some cases, the group that he or she represents may have a name that is similar to a well-known business or charity, making it seem as though they are affiliated with a legitimate organization. But remember that looks can be deceiving, and don’t make any decisions or commit any money based on a good first impression alone.

BEWARE OF HIGH-PRESSURE TACTICS

Con artists like to take the money and run. If you’re being pressured to sign up or commit money immediately, then that’s a warning sign of possible consumer fraud. Instead of committing yourself right away, take the opportunity to consider the offer.

Scam artists don’t want you to do this, because you may start to ask too many questions. But you should take time to be sure you understand what kind of commitment you’re making and how credible the offer seems. Consult experts, including your local CPA, an attorney or bank officer, for their advice.

GET IT IN WRITING

Don’t commit immediately to an offer made over the phone or in a door-to-door solicitation. Ask for some kind of documentation describing the offer being made, then read the materials and make sure you understand them.

REQUEST REFERENCES

Someone representing a legitimate organization should be able to provide references or some other verification about the group and what it does. Ask also for contact information where you can call the person making the offer.

If they’re reluctant to provide this information-—or if they insist that they’ll call you instead-—you have good reason to be suspicious. However, don’t assume that someone who does supply contact information is necessarily reliable. They may simply be a con artist with a cell phone.

NEVER MAKE A PAYMENT UP FRONT

In many scams, the thieves insist that you have won a prize, can have a new credit card or might qualify for a guaranteed job-—if you turn over a fee in advance.

Legitimate businesses do not ask for processing fees up front for prizes or business opportunities, so this request is a sure warning sign of trouble.

ASK YOUR CPA

Your local CPA can work with you to consider any questionable offers you receive and help you spot possible fraud. Consult him or her on any financial question facing you or your family.

(Updated and reviewed 2016)