What is ‘Fraud’? …..www.wisegeek.com

I happen to find this http://www.wisegeek.com during my web search.

Its amazing to see the kind of curiosity people have & the commitment of others to provide possible solutions to those enormous questions. At wise geek, Free answers are provided to simple & common questions by common people like you & me. So next time when you have a question, you know whom to approach…. [:)]    The site mentions to be having 55,971 articles on it…..

I wanted to know “What is Fraud?” ……… The answer is mentioned below…… but more interesting thought about it is the kind of comments it has received.    🙂

In a broad strokes definition, fraud is a deliberate misrepresentation which causes another person to suffer damages, usually monetary losses. Most people consider the act of lying to be fraudulent, but in a legal sense lying is only one small element of actual fraud. A salesman may lie about his name, eye color, place of birth and family, but as long as he remains truthful about the product he sells, he will not be found guilty of fraud. There must be a deliberate misrepresentation of the product’s condition and actual monetary damages must occur.

Many fraud cases involve complicated financial transactions conducted by ‘white collar criminals’, business professionals with specialized knowledge and criminal intent. An unscrupulous investment broker may present clients with an opportunity to purchase shares in precious metal repositories, for example. His status as a professional investor gives him credibility, which can lead to a justified believability among potential clients. Those who believe the opportunity to be legitimate contribute substantial amounts of cash and receive authentic-looking bonds in return. If the investment broker knew that no such repositories existed and still received payments for worthless bonds, then victims may sue him for fraud.

Fraud is not easily proven in a court of law. Laws concerning fraud may vary from state to state, but in general several different conditions must be met. One of the most important things to prove is a deliberate misrepresentation of the facts. Did the seller know beforehand that the product was defective or the investment was worthless? Some employees of a large company may sell a product or offer a service without personal knowledge of a deception. The account representative who sold a fraudulent insurance policy on behalf of an unscrupulous employer may not have known the policy was bogus at the time of the sale. In order to prove fraud, the accuser must demonstrate that the accused had prior knowledge and voluntarily misrepresented the facts.

Another important element to prove in a fraud case is justifiable or actual reliance on the expertise of the accused. If a stranger approached you and asked for ten thousand dollars to invest in a vending machine business, you would most likely walk away. But if a well-dressed man held an investment seminar and mentioned his success in the vending machine world, you might rely on his expertise and perceived success to decide to invest in his proposal. After a few months have elapsed without further contact or delivery of the vending machines, you might reasonably assume fraud has occurred. In court, you would have to testify that your investment decision was partially based on a reliance on his expertise and experience.

The element of fraud which tends to stymie successful prosecution is the obligation to investigate. It falls on potential investors or customers to fully investigate a proposal before any money exchanges hands. Failure to take appropriate measures at the time of the proposal can seriously weaken a fraud case in court later. The accused can claim that the alleged victim had every opportunity to discover the potential for fraud and failed to investigate the matter thoroughly. Once a party enters into a legally binding contract, remorse over the terms of the deal is not the same as fraud.

If you suspect you are a victim of fraud, consult a legal professional and collect all tangible evidence of damages. Keep in mind that fraud is not easily proven in a court of law, although the court of public opinion may be squarely on your side.

Discuss this Article

Thank you for your comment!

34. Beware when you transfer your car to taxi broker. the broker will cheat you of your downtime in case of a no fault accident in some cases, try to take your car. On the bill of sale always stipulate the special conditions of the sale.
– anon56923
33. government spending/welfare spending is not fair. it is causing american people to steal and kill. the only way to prevent the two is to stop the fraud with government spending and welfare spending. welfare should not have to be paid for by a person who doesn’t know or did not sign anything to pay it back.
– anon50014
32. I recently filed a claim against a company, and/or the owner. Neither he nor a representative appeared, and I was awarded. Two months later I never received any money due me. I did further research, and came to find out that the license on his business card does not exist, and his company doesn’t either. Yet, his wife owns a business with a similar name and both the business and their home address are one and the same. I recently drove past their address, and noticed the man’s business truck parked in their driveway. I had the business name painted on it using just the letters. The truck also showed the same phone number as on the business card (the company advertising a non-existent business license). If I’m right, this is fraud! Question: Being that his wife is the legal owner of a company with a similar name and I already sued the husband, and the company didn’t exist, I would like to know if I can sue his wife. As I pointed out earlier, the truck only shows the first letters on it. That appears to be short description of all the company(ies) they operate. Thank you, Ted Montesano
– seabeach
30. Me and my husband have been together for 14 years. The last four years we have been married, we have been in such a difficult state. I was working the third shift and he the first. In Sept a nail went into his eye. Lost the eyesight but is still functional. Well way before this I found out he has been abusing my daughter. He gave her a black eye, punched her in the ribs, locked her in the closet. All this was happening while I was a work. (I did not know this and this does not come up until later). After his injury his lawyer was giving him a $10,000 check to pay off bills like food for the kids to eat, electricity, gas, phone, car expenses, clothing for the kids etc. He told me I had permission to cash it. After all this we had to go to a school meeting. The school said they had red flags showing about my daughter. They had some concerns with her grades dropping and other issues. They then asked my husband to leave. She had told the nurse her father had pushed her into the wall while his arm was wrapped around her neck. They brought her down the the office to talk to the police. He actually locked her down in the cellar for and hour. The police confronted him and he admitted to it. It has been a long, ongoing case. Knowing this, he took me took me to court for fraud and larceny because I signed his name on the check and did not have him sign it. It was used for the purpose. There are restraining orders against him for me and my daughter. He violated it twice and is still walking the streets. Do you think I will go to jail for fraud? I have to meet in front of the judge soon. I never have been in trouble before. I am just protecting my kids.
– anon46265
29. i cashed a cashier’s check for $4980 and i took it to my bank. i didn’t know it was fake until the bank called me and said they were going to prosecute me for the money. i sent the money through the mail –cash — what a stupid thing i did, but just like a lot of people didn’t know. it was through mystery shoppers. i even told the bank i was willing to pay the money back, not knowing the check was a scam. i never did anything like this before in my life and just pray that i can straighten it up the right way and i pray these people are caught. i called the state police and i have to go in on monday and talk to a crime investigator. i know i didn’t do anything wrong and i’m innocent just like a lot of you. check into it before you cash anything. it looked so real, so be careful. don’t be fooled like me. i’m going to call the fbi on monday and report these people. it came from canada and they told me to send it to london, england and i sent cash like a fool. i know that i learned from this and that i just want to warn all of you about this.
– anon45005
28. I cashed a check for a friend, and she did not tell me that she did not have any money in the account. She cashed it for $700 and she got all the money. I only cashed it for her because she does not have a bank account. I just found out this morning that she put me in debt $700, plus the overdraft fees. She only got a $25 fee charged to her account, and I am now almost $1000 in debt. Should I take her to court for fraud, since she knowingly wrote a check to me that would bounce and now has no intent on paying the fees?
– anon41701
26. I recently ordered a product on line that is out of canada. I naively sent a moneygram, but have not received the product. They sent me an invalid tracking number. One phone number says not in service, the other continues to say all operators are busy then hangs up. I can not contact these people. Is this fraud? If so how do I go about taking legal action? It has been over a week, and they were to send it world wide express. I should have received it days ago.
– lorial1
25. I lived with a guy for eight years I was completely taken in by him

He was charming I believed everything he said Behind my back he was constantly having sex with other people ….anyone he met. There was no relationship on his part with me. I meant only money to him. In the end he did a runner with my money around 1 million euro. I am homeless at age 62, BUT no-one believes me He convinces everyone I am the bad guy. Its crazy.

– anon22310
24. We the American people have been subjected to large amounts of fraud by the Bush-Cheney administration, the Government cover-up of 9-11, the Wall Street robber-barrons and elite bankers, Pentagon psy-ops regarding the Iraq war, etc etc. What is the recourse of “We the people” against this wrong doing in instances of out right criminals? I’m just saying… How’s our foreign debt doing? How’s your 401k doing? How’s Bush’s plan to combine our three countries together – USA, Canada & Mexico – as in the North American Union (NAU) – similar to the E.U. – coming along? Get ready for the introduction of our new currency – the “AMERO” – once they (above) tank the U.S. Dollar! Traitors all!! You get the picture.
– anon22253
23. I want to start by telling about my situation. This company associated with my bank calls me back in late August of 2008 offering me some kind of sweet deal on life insurance. I told them I would like to discuss it over first with my husband before making a decision. Then they offer to send out an information packet about the policy. (Which I never even got) However, months went by and come November 15, 2008 my account is in the negative with money with drawn from it. I did not even recognize the charge. I knew this was an error. So I called my bank and told her I did not recognize the charge that was in place. I asked for the name of the company, so I could at least see if maybe I had bought something from online or out of a catalog that I had forgot about. She could not give the name of the company; all she could give was a number for the company. She told me to call and dispute it with them. If that did not work to call back and my bank would dispute it for me. So I tried, with it being Saturday they were closed. While waiting, I decided to google the number given to me, just to see if it would link me some way or another to finding out which this company was. I came upon this website talking about the company and how there were and still are people going through my situation. So first thing Monday morning I call the company, and demand my money back. I told them I do not know how they were able to get my account information, that I never ever under any circumstances gave permission to withdraw money from my account. At the end of the call, I did indeed hear that my money was being credited back into my account. Up to ten days, that is. So I hang up and call my bank to take care of the overdraft fee that I am being charged along with why and how that company got access to my account. I was pretty much b/s around until I asked the associate if I just needed to contact an attorney. I then was told once the money was credited back into my account that I should call my bank back and then they will credit my overdraft charge back to me as well. I told him everyone sure is quick to take that money, however when giving it back they want to take their time with it. I feel violated, my trust is broken with this bank, and I feel there is more I can do to stop this from happening again.

My questions being.

Is this considered fraud?

If not, then what is this considered?

What legal action can I take against the bank?

Is there even anything I can do?

– MgnMls
22. If a husband cashes in a life insurance policy and it is owned by his wife in her name, is this fraud too?? Can I take him to court as I was not aware of this and he cashed check without my approval .
– anon21239
21 What is the statute of limitations for fraud in Florida?
– thbevan
20. 2 employees from an agency forged and notarized my name on my company’s letter head and sent it overseas. I was contacted to verify the contents and realized that it was forgery. They were indicted by grand jury and pled guilty to forgery. Could I sue them for using my name without my permission? They misrepresented me and associated my name in a criminal act. What damages could I suffer from this?
– gtberbice1
19 Last year I borrowed $130,000.00 and I give her promissory note that will pay back following year. I pre paid her 12% interest, and carry payment to her for whole year. And I couldn’t do it anymore because of my financial situation. She thinks that I invest her money in real estate, but I don’t have any real estate. Now I am filing for bankruptcy. And now she’s accusing me that I have committed fraud, but I have done no such thing. I just borrowed money from her. Now she is seeking an attorney to get me for fraud. And she goes and tells everyone that I have defrauded her. Please tell me what to do. My attorney said after your bankruptcy is over I should sue her for fraud accusation.
– sheydary
16 I want to take the Certified Fraud Examiners from India. How do I go about that?
– ishwarchopra
14 a woman who was living with my dad signed some hospital forms with her name and his last name and wrote that she was his wife. However, they were not married Georgia and does not recognize common law. Also, she sign a warrantee deed for an right of survivorship with her real name and then put “aka her first name and his last name.” Is this fraud? she was draining him of all his money and assets. He died 3 wks. ago. I had power of attorney. His will stated all his posessions go to me. Does she have any right to anything?
– seasom
13 How do I find out if the house I’m renting is going through foreclosure? My lease is almost up, and although he promises to renew he hasn’t offered any paperwork.
– sparkles
12 For several years if my payment was late, my local creditor would accept and waive the service fee I crossed off my invoice when I paid the bill. There was no verbal exchange for this I simply crossed off the service fee, deducted the amount and sent the balance. Now, that same creditor has decided to charge the monthly service fees and is adding a % of interest to it. Can it be assumed that if the creditor has always waived the fee it would always be waived? There is no contract or agreement between the parties.
– anon12165
11 Thank you for posting this. Since 2000, I have used

Monster.com and have gotten several jobs with my resume, but then came 2005.

Monster is a US based company that sells information to anyone in the world who pays their fee and they take no responsibility after that. Fraud may be hard to prove, but it does not stop ruthless legal professionals and others from hounding you with one filing after another in the hopes that you won’t show up to court so they can win.

– egreenb1
9 I told a woman that I am in good health to get a job, but in fact I wear a colostomy bag and I have a fake leg. Is this fraud? And, if so, can I go to prison for lying about the colostomy bag?
– anon6340
Editor’s reply: While you should never lie during a job interview, your interviewer may not legally have the right to ask you certain questions pertaining to any disabilities you may have. You may find more information on the subject in our articles, What is the ADA? and What is the Equal Employment Opportunity Commission (EEOC)?

anonymous,that sounds like a tough dilemma you’re in! just because someone is in a position of trust, like a lawyer doesn’t guarantee the they’re trustworthy. if you feel uneasy about what the lawyer is asking you to do, you should get a second opinion! trust your gut! if you end up doing something wrong, it’s probably not likely that you could get the lawyer to take the fall. after all, a law is a law and if you break one, you still have to face the consequences. good luck!

– olittlewood
7 I have a lawyer telling me that something is legal, but i feel it cannot be. The basics of the story involve me lying about coming into the possession of some documents and claiming some money. The lawyer says nothing can happen to me, but i feel that this just can’t be true. I am worried I am going to get done for fraud, but I am under 18 and think that since the lawyer is telling me it is fine (I have emails to prove this) then I could blame it all on him? Please help! I don’t know what to do!!!!
– anon6139
6. What if at your job you borrow $10000.00 in cash but you are paying it back so as of right now you owe $7000.00. The person knows it was a stupid thing to do. My question is if they get caught before paying the whole thing back what charges will they face and how long of a jail time if any?
– natasha1
5. How much research did you do to confirm this person’s claim that the debt was yours?

If you didn’t do any research, and simply believed their threats, you may not have a fraud claim. It’s unfortunate, but one person lying to you is not always fraud.

Of course, if you did pay them when the debt wasn’t actually yours, you can take them to court to get the money back…

Good luck.

– anon4068
3.          if someone knows you are not liable for payment of a bill and you are not aware of it, and this person scares you into paying it by threatening legal action, is this considered fraud?
– anon3998
1. I thank God for his mercies for providing a site like wise geek. I must commend you for your detailed analysis. You know, I have not come across site that explains this act in such a detailed way like this.

But, the kinds mention here are high levelled frauds. And it is not common; you know why it is very expensive and returns are usually very high.

On the issue of account, it is difficult to ask for ones credentials so the scammer has to be tactical in doing that. So there usually options in which that is one of them, but the most common is virgin account.

On the lottery, the notifications and all the other documents can be sent from any where in the world. But the string is not pulled from here, and you know it is global. Well I have not seen any that says Nigeria and there of them I have the format it is often UK, America and Australia.

Now there is another that should be of note. And that is publishing in details how these people work. Take the issue of over cost for instance, there are formats that are procedure it follows and they in this way say the scammer mails you on an item indicating interest well it will be a sin if you do not want to reply to your ad on the net. Then a second mail follows discussing thing extensively. Then after which a third one comes concluding the transaction. Again it should be of note that how a transaction started determines how it ends. By this I mean the discussions they had earlier in the process.

– anon1107

Warning: The US Government Mail You Received Might Be a Scam


This article is a reprint of Wise Bread’s contribution to OPEN Forum from American Express — where small business owners can get advice from experts and share tips with each other.

Con artists are constantly bombarding us with bills that look like official government mail.  It is one of the most effective scams, and there’s a good chance you are already a victim.

“33% of all businesses that receive bills in the mail for products or services they never asked for actually pay the bills,” said Robert Siciliano, an identity theft expert and author of The Safety Minute.

Fake bills are especially convincing when disguised as government mail.  For example, here’s a picture of a fraudulent letter I received from the “Business Filing Division”

Fake Business Filling Bill Form

It looks just like a real California state form.  Using official language and citations to actual law, the letter warns that my business will be suspended if I didn’t pay $239 to update my company’s information with the state of California.  (California does require businesses to periodically update their information, but it only costs $20, not $239.)

After almost falling for this scam, I reached out to experts and other victims of government mailing scams to learn more about how it works.  Here’s a list of their best advice on:

I.  8 ways to spot this scam

Most of these fake government letters share the following tricky features:

1.  Everything looks official

These fake letters have official-looking seals, quote real regulations, and contain government forms that look like the real thing.

The words “Office Use Only” are prominently displayed on the top.  This is a sneaky attempt to mimic the words “Official Use Only.” – Harif87 (http://www.scam.com/member.php?u=136786), Scam.com.

“I’m a designer, and so I can usually spot the difference right away between a real government document and a spurious one.  But often times they’re very close!  I have a grudging respect for how well these sales letters are designed to look like government notices.”  – Matt Kirkland, Brand New Box.

2.  They have your correct information

Just because they have your correct information doesn’t mean the letter is legitimate.  A lot of your professional and personal information are part of the public record.  It is easy for scammers to pick info from online databases and go to work.  – Alexis A. Moore, Survivors in Action.

“Since your state filings are public records, they time the mailings to coincide with your corporation’s actual renewal dates.”  – Kate Lister, author of Undress For Success.

3.  Offering a semi-legitimate service

“Some of these companies offer a legitimate service that is actually required by State Law.  However, they do not offer this service in a forthright manner.”  – Lisa Nguyen esq, Proviso Law Group.

4.  Sneaky disclaimers

“The mailings generally contain disclaimers required by law, such as ‘This is not an invoice.’  However they can still be deceptive if prepared in a format similar to a state document such as an annual report.”  – John Meyer, Company Corporation.

Even when disclaimers are attached, they are sometimes printed in small gray letters, hidden among a sea of legal jargon, or printed on parts of the letter that is likely to be discarded.  –  Issamar Ginzberg, Entrepreneur of the Year.

5.  Prey on your fear of government and obedience to authority

“The letter language didn’t feel right.  It was vague and stressed a deadline.  It preyed on a fear that one is delinquent on a government related fee.” –  Blaine Ung, co-founder of WebinarHero.

“I got accustomed to writing checks to the government in order to get the LLC set up.  Just when I thought that the numerous fees were done with, I got a letter in the mail exactly as you described.  I was furious that I was going to have to pay $325 each year as another cost of doing business.” – Taylor Brown, lead software architect for YouNeedABudget.

6.  Targeting the most vulnerable people

“What makes this insidious is that they are preying on new business owners who are probably excited to get their business off the ground, almost at any cost.”  – Russ Hearl, co-founder of Sherpa Travel Exchange.

7.  Deceptive addresses

They are set up in virtual office parks located in prestigious business buildings. The addresses are in the state capital to avoid raising red flags. – Christine Durst, co-author of The 2-Second Commute.

8.  Official sounding names

They use important names like “Corporate Compliance Filings,” “Board of Business Center,” “Annual Filing Division,” “Business Filing Division,” “Compliance Annual Minutes Board,” “Federal Clearing House,” “Department of Business Minutes,” “Department of Business Compliance,” etc.

II.  7 most effective ways to protect yourself

1.  Google the phone number and payment address

“I did a Google search of the phone number to see if it led to a government Website; instead I found numerous postings that the number I searched belongs to an organization that scams business owners out of money. Thank goodness for these public forums and for the folks that take the time to post in them.”  – Caroline Callaway, Bolt Public Relations.

2.  Look for official consumer alerts

Check your state’s official website for consumer alerts.  Most likely your scam has already been reported (see official state websites for all 50 states).  – Nicole Winger, spokesperson for CA Secretary of State.

3.  Your accountant or lawyer may help for free

“I never charge clients for asking questions.  I thank them and make them feel good for bringing it to my attention before taking action so that they feel good about contacting me whenever another similar question comes up.” – Michael T. Hanley, CPA at Merl & Hanley.

“Generally, I don’t charge my client for looking at a document like this if they hired me to set up the LLC or Corporation.”  – Lisa Nguyen esq, Proviso Law Group.

4.  Set reminders in accounting or calendaring software

Enter your schedule of required government payments into your accounting software.  By setting up reminders in advance, you can quickly verify whether you are late for a payment.  – Dawn Tulman, ToiBocks.

If you have made payments to the real government agency in the past, the agency’s mailing information should already be in your accounting software’s database.  The fact that you have to create a new payee profile for this new “bill” should raise red flags.  – Rick Smith, Chefs Resource.

5.  Create an official “accounts payable list”

“We have an official Accounts Payable list.  Anything not on that list is required to be forwarded to me (president of the company) for review.” – Ken Wisnefski, Webimax.

6.  Use a legitimate third-party service

I registered my LLC through the Company Corporation.  My service package gives me unlimited access to their toll-free customer service hotline.  When I asked about the dubious letter I received, they immediately identified it as a scam.  Their website also has a helpful scam alert section.

Several other companies provide legitimate incorporation and business registration services.  For example, Denise LaBuda, founder of Money Wizdom, also got excellent help from Mycorporation.com when she received the same fake government solicitation.

7.  Join a community

Don’t reinvent the wheel.  Other business owners have received the same scam letters and have already done the research.  Joining communities like the Rotary Club, your local Chamber of Commerce, blog communities, or online business forums give you access to a large reservoir of collective experiences.

Membership in these communities can also open many doors.  When I did research on this scam, I identified myself as a contributor to the American Express Open Forum and Wise Bread community.  I received a torrent of responses, including immediate follow-ups from the California Secretary of State and the IRS.

III.  Getting help after you’ve been scammed

Should you contact law enforcement?

“Depending on how savvy the scammers are, it may be difficult for law enforcement to tackle from a resource perspective.  While there are a number of state and federal rules and regulations that can be called into play, the reality is that most won’t have much of an effect since the potential for enforcement is so low.”  – Edi Goodman, chief privacy officer of Identity Theft 911.

On the other hand, California’s Attorney General has been actively prosecuting these rip-off artists. When in doubt, it is probably best to make a report.

Organizations that help

There are non-profit victim advocacy groups that can help you file complaints.  “Reporting crime and knowing what to look for in a scam is difficult.  We have volunteers eager to assist anyone who is in need at no charge.”  – Alexis A. Moore, Survivors in Action.

Contact your credit card company

If you paid by check or money transfer you can probably kiss that money goodbye.  However, if you paid by credit or charge card, you may be able to dispute the charges. – Shawn Mosch, Co-founder of ScamVictimsUnited.

IV. The many variations of this scam

These government solicitation scams often target the following groups:

  • Business owners: Notice offers to update your company information, file your corporate minutes, renew your business registration, or help with other record-keeping requirements.
  • Taxpayers:  Scammer tempts you with a fake tax refund or scares you with a delinquency notice.
  • Property owners:  Letter tells you that you’re eligible for lower property taxes if you submitted to an official reassessment of your property’s value.
  • Licensed professionals such as realtors, cosmetologists, brokers:  You get a bill for renewing your license, along with a stern warning that failure to pay will result in revocation of your license.
  • Employers:  Letter tries to sell you employment posters required for the workplace.  Usually these posters can be downloaded for free from official government websites.

V.  Why this scam is so dangerous

Beyond monetary loss, there are many other reasons why you should worry about these scams.

Marked as a mark

If you respond to one letter, you might be marked as an “easy target” and receive additional – and perhaps more dangerous – solicitations in the future.

They might be after your identity

“The scammers are often looking for personal data as well as bogus fees.  They’ll use the info for ‘true ID’ thefts, which means setting up credit accounts in your name and making other mischief.” – James Walsh, editor of Scams & Swindles: How to Recognize and Avoid Internet Era Rip-offs.

You miss a real government deadline

Some of these scams “help” you fulfill a real government requirement at an extremely inflated price.  But just because they are charging you a high fee is no guarantee that they will do a good job.

In one recent California case, a company charged victims $175 to help them file corporate records.  However, the company didn’t bother asking the victims for the right information, and instead filed fictitious corporate records on the victims’ behalf.

VI.  Official state websites for registering or incorporating your business

Before you pay another “bill” from the government, check your state’s official website for the real requirements and deadlines:

District of Columbia
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Puerto Rico
Rhode Island
South Carolina
South Dakota
U.S. Virgin Islands
West Virginia

If you have received these fraudulent letters in the past, please share your experiences in the comments.  Search engines will pick up your story and make it easier for other people to identify these scams.

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