All states, including California, have laws on the books to prevent and punish perpetrators of consumer fraud. Business owners and employees should be aware of common versions of this fraud in order to avoid being accused of committing a financial crime.
Common types of consumer fraud
Under criminal law, fraud involves using some type of deceit to obtain money or resources. Sometimes, a person may not realize they are the subject of a scam until weeks or months later. The most common types of consumer fraud include the following:
– Identity theft: This occurs when someone has their name or financial information used by someone not authorized to do so. A person may suddenly find that their bank accounts have been accessed or that transactions have been made in their name. Identity theft is extremely common, involving millions of Americans every year.
– Mortgage fraud: This occurs when an individual has a mortgage taken out in their name or attempts to modify their mortgage but never receives any such modification. It often occurs with the promise of achieving a reduced mortgage rate or additional home equity.
– Credit card fraud: This occurs when someone has a financial transaction made on their credit card or bank account without their explicit authorization. It often occurs as a result of database breaches or skimmer devices that are placed on credit cards. Most credit card companies have protections in place to ensure that a consumer is not responsible for fraudulent charges made in their name.
Being accused of consumer fraud can be hugely problematic to business owners and their employees. Appropriate planning and training can prevent individuals from being accused of perpetrating this type of crime.