Consumer Fraud

Consumer Fraud in the United States

Ross, E. A., in 1907, in his book “Sin and society: An analysis of latter-day iniquity” (Boston, Houghton Mifflin, page 46), wrote that the “shocking leniency of the public in judging conspicuous persons who have thriven by antisocial practices is not due, as many imagine, to sycophancy. Let a prominent man commit some offense in bad odor and the multitude flings its stones with a right good will. The social lynchings of the self-made magistrate who put away his faded, toil-worn wife for the sake of a soubrette, proves that the props of the old morality have not rotted through.”

Tangible reputational consequences for white-collar criminals are high. A held by van Erp (2012), the firms’ fear “of reputational sanctions arises out of the expectation that consumers, clients, or investors respond to the disclosure of offender names by avoiding them and thus cause them financial damage, such as decreased sales, market share, share value, or business opportunities. This financial reputational damage may be more significant to the firm than the legal sanction itself.” [1]

Top Frauds

The specific types of fraud most frequently reported by survey participants included fraudulent weight-loss products, fraudulent prize promotions, being billed for a buyers’ club membership that one had not agreed to purchase, being billed for Internet services that one had not agreed to purchase, and fraudulent work-at-home programs.

Marital Consequences

Uggen, C., Manza, J., & Thompson, M. foud in 2006 [2] that:

  • 29 U.S. states consider criminal conviction acceptable grounds for marital dissolution;
  • 48 states terminate parental rights as a result of conviction for certain crimes; and
  • 15 states prohibit convicted felons to be adoptive or foster parents.

Public Perceptions of Appropriate Prison Sentences

Lawmakers, judges and parole officers make important public policy decisions
about who serves time in prison and for how long. Yet, we how little about how the
public views these sentences.

Based on a nationally representative survey of 1300 U.S. adults, Mark A. Cohen ; Roland T. Rust ; Sara Steen [3] found that the public largely concurs with current sentencing decisions about incarceration and sentence length – with the exception of certain crimes – particularly drug offenses (which the public believes are dealt with too harshly) and certain white collar crimes (which the public believes are not dealt with harshly enough). We found strong support for spending more money than currently to reduce crime below current levels. However, much of that support is for increased prevention programs targeted at high-risk youth, more police on the street, and for drug treatment programs for nonviolent offenders – rather than money for more prisons. The typical household would be willing to pay between $75 and $150 per year for crime prevention programs that reduced crimes by 10% ron their communities. In the aggregate, these amounts imply a willingness to pay to reduce crime of about $23,000 per burglary, $60,000 per serious assault, $213,000 per armed robbery, $225,000 per rape and sexual assault, and $9.1 million per murder.

Sanctions for Non-Violent Offenders

There has been interest in many U.S. states in exploring options to reduce corrections costs. Several states have implemented policy changes to target prison beds for the most dangerous criminals. Texas, in particular, has gained national recognition for its efforts to divert some offenders from prison. In 2007, the Texas legislature appropriated $241 million, which would have otherwise been spent on prison construction and operation, to create a network of short-term residential diversion and treatment facilities that serve low-level offenders; the state also expanded outpatient drug and mental health treatment resources.

Intermediate Sanctions

State legislatures could consider additional options to reduce prison costs by authorizing increased use of intermediate sanctions for some felony offenders. These sanctions are more restrictive than probation but not as restrictive as incarceration, and include alternatives such as community supervision with electronic monitoring, probation and restitution centers, day reporting centers, and community residential substance abuse treatment. These options may be appropriate for a large number of the state’s criminal justice population, as many new prison admissions and current prisoners are non-violent offenders, most of whom do not have violent criminal histories.

Many offenders being sent to prison may be appropriate for intermediate sanctions. However, while diverting such felony offenders from prison would generate cost savings, Research shows that such action also has both positive and negative considerations.

Therapeutic sanctions, such as residential drug treatment, have been shown to reduce the probability that the offenders will commit new offenses, both improving public safety and reducing future criminal justice costs. Electronic monitoring has been shown to significantly reduce the risk that offenders supervised in the community commit new offenses or technical violations, or abscond from supervision.

Electronic monitoring is less effective for homeless persons who lack a permanent residence, requiring more scrutiny of their movements. Also, offenders must be able to recharge the monitoring unit for eight hours each day. Further, real-time GPS monitoring requires access to a cellular signal, which may be difficult to obtain in rural areas, while radio frequency monitoring requires offenders to have a land-line telephone. Expanding electronic monitoring to serve additional offenders would require expanding the number of probation officers employed by the Department of Corrections. Probation and restitution centers have relatively low costs but low completion rates.

The United States Fraud and Consumer scams

Basics of fraud in the the United States (and scams). There is also additional information and resources on related topics (such as consumer fraud) in the United States.

Resources

Notes

  1. Van Erp, J. G. (2012). Naming and shaming in regulatory enforcement. In C. Parker & V. L. Neilsen (Eds.), Explaining compliance: Business responses to regulation (pp. 322–342). Cheltenham, U.K.: Edward Elgar. (p. 323)
  2. Uggen, C., Manza, J., & Thompson, M. (2006). Citizenship, democracy, and the civil reintegration of criminal offenders. The Annals of the American Academy of the Political and Social Sciences, 605, 281–310.
  3. Cohen, M. A., Rust, R. T., & Steen, S. (2002). Measuring public perceptions of appropriate prison sentences (Grant No. 1999-CE-VX-0001). National Institute of Justice, Office of Justice Programs, U.S. Department of Justice

Further Reading

  • Ayres, I., & Braithwaite, J. (1992). Responsive regulation: Transcending the deregulation debate. New York: Oxford University Press.
  • Benson, M. L., & Simpson, S. S. (2009). White-collar crime: An opportunity perspective. New York: Routledge.
  • Button, M., Tapley, J., & Lewis, C. (2013). The ‘Fraud Justice Network’ and the infrastructure of support for individual fraud victims in England and Wales. Criminology and Criminal Justice, 13, 37–61.
  • Clinard, M., & Yeager, P. C. (1980). Corporate crime. New York: Free Press.
  • Cullen, F. T., Maakestad, G. C., & Benson, M. L. (2006). Corporate crime under attack: The fight to criminalize business violence. Cincinnati, OH: Anderson Publishing.
  • Ermann, M. D., & Lundman, R. J. (2002). Corporate crime and governmental deviance (6th ed.). New York: Oxford University Press.
  • Holtfreter, K., Reisig, M. D., &. Pratt, T. C. (2008). Low self-control, routine activities, and fraud victimization. Criminology, 46, 189–220.
  • Levi, M. (2009). Suite revenge? The shaping of folk devils and moral panics about white-collar crimes. British Journal of Criminology, 49, 48–67.
  • Mascini, P. (2013). Why was the enforcement pyramid so influential? And what price was paid? Regulation and Governance, 7, 48–60.
  • McLean, B., & Elkind, P. (2003). The smartest guys in the room: The amazing rise and scandalous fall of Enron. New York: Penguin Books.
  • Moore, E., & Mills, M. (1990). The neglected victims and unexamined costs of white-collar crime. Crime and Delinquency, 36, 408–418.
  • Pontell, H. N., Black, W. K., & Geis, G. (2014). Too big to fail, too powerful to jail? On the absence of criminal prosecutions following the 2008 financial meltdown. Crime, Law, and Social Change, 61, 1–13.
  • Rosoff, S. M., Pontell, H. N., & Tillman, R. H. (2004). Profit without honor: White-collar crime and the looting of America (3d ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
  • Simpson, S. S., & Koper, C. S. (1992). Deterring corporate crime. Criminology, 30, 347–375.
  • Slapper, G., & Tombs, S. (1999). Corporate crime. Harlow: Longman.
  • Stone, C. D. (1975). Where the law ends: The social control of corporate behavior. New York: Harper and Row.
  • Sutherland, E. H. (1949). White collar crime. New York: Dryden.
  • Tombs, S., & Whyte, D. (2003). Unmasking the crimes of the powerful: Scrutinizing states and corporations. New York: Peter Lang.
  • Zahra, S. A., Priem, R. L., & Rasheed, A. A. (2005). The antecedents and consequences of top management fraud. Journal of Management, 31, 803–828.
  • Yeager, P. C. (1991). The limits of law: The public regulation of private pollution. New York: Cambridge University Press.

Consumer Fraud: Open and Free Legal Research of US Law

Federal Primary Materials

The U.S. federal government system consists of executive, legislative, and judicial branches, each of which creates information that can be the subject of legal research about Consumer Fraud. This part provides references, in relation to Consumer Fraud, to the legislative process, the federal judiciary, and the primary sources of federal law (cases, statutes, and regulations).

Federal primary materials about Consumer Fraud by content types:

Laws and Regulations

US Constitution
Federal Statutory Codes and Legislation

Federal Case Law and Court Materials

U.S. Courts of Appeals
United States courts of appeals, inclouding bankruptcy courts and bankcruptcy appellate panels:

Federal Administrative Materials and Resources

Presidential Materials

Materials that emanate from the President’s lawmaking function include executive orders for officers in departments and agencies and proclamations for announcing ceremonial or commemorative policies. Presidential materials available include:

Executive Materials

Federal Legislative History Materials

Legislative history traces the legislative process of a particular bill (about Consumer Fraud and other subjects) for the main purpose of determining the legislators’ intent behind the enactment of a law to explain or clarify ambiguities in the language or the perceived meaning of that law (about Consumer Fraud or other topics), or locating the current status of a bill and monitoring its progress.

State Administrative Materials and Resources

State regulations are rules and procedures promulgated by state agencies (which may apply to Consumer Fraud and other topics); they are a binding source of law. In addition to promulgating regulations, state administrative boards and agencies often have judicial or quasi-judicial authority and may issue administrative decisions affecting Consumer Fraud. Finding these decisions can be challenging. In many cases, researchers about Consumer Fraud should check state agency web sites for their regulations, decisions, forms, and other information of interest.

State rules and regulations are found in codes of regulations and administrative codes (official compilation of all rules and regulations, organized by subject matter). Search here:

State opinions of the Attorney General (official written advisory opinions on issues of state law related to Consumer Fraud when formerly requested by a designated government officer):

Tools and Forms

Law in Other Regions

*This resource guide is updated frequently. However, if you notice something is wrong or not working, or any resources that should be added, please notify us in any of the "Leave a Comment" area.

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