Effects of Customer Fraud on Everyone

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Effects of Customer Fraud on Everyone

Customer or consumer fraud refers to any fraud instance that targets individuals as victims, causing them to suffer personal or financial losses due to deceptive, illegitimate, unfair, or dishonest business practices. Consumer fraud takes many forms such as telephone fraud, identity theft, magazine fraud, credit card fraud, counterfeit products, sweepstake fraud, fraudulent prize promotions, foreign currency offers, spurious multilevel marketing ruses, and Internet auctions (Albrecht et al., 2011). While individuals who directly feel the effects of customer fraud are mainly college students and the elderly because they are the naïve segment of the pollution, millions of other people, including the savviest customers, are also affected. What this means is that everyone can be a direct or indirect victim of consumer fraud.

In other words, everyone has to pay in some way in the incidence of customer fraud, whether in terms of changes in commodities and commodity prices or for fraud investigations (Albert, 2001). For example, when consumer fraud occurs, business owners suffer in that their legitimate enterprises undergo financial losses when their sales are diverted to deceptive firms, hence losing their competitiveness. Shoddy repairs, the sale of adulterated and quack offerings, and substandard construction jobs culminate in physical harm to consumers. Unchecked fraudulent actions quake consumers’ marketplace confidence, crumble societal moral values, and weaken the faith of uncompensated victims in judicial instruments and systems, besides exacerbating their anger and depression. So, while individual victims suffer directly from consumer fraud, the entire society can suffer indirectly in the event of consumer fraud but in different degrees and magnitudes.

References

Albert, M. R. (2001). E-buyer beware: Why online auction fraud should be regulated. Am. Bus. LJ, 39, 575.

Albrecht, W. S., Albrecht, C. O., Albrecht, C. C., & Zimbelman, M. F. (2011). Fraud examination. Cengage Learning.