CH 33 amp 34 DECEPTION AND FRAUD DECEPTION when advertising purposefully misleads you FRAUD deliberate deception designed to secure an unlawful gain Who is this guy Types of deception and fraud ID: 257160
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Slide1
DECEPTION AND FRAUD
CH. 3.3 & 3.4Slide2
DECEPTION AND FRAUD
DECEPTION:
when advertising purposefully misleads you
FRAUD: deliberate deception, designed to secure an unlawful gainWho is this guy Slide3
Types of deception and fraud
Trading up:
The practice of pressuring consumers to buy a more expensive product
EX: you go to Best Buy to purchase a DVD player, and the salesman gets you to buy a better brand with more functions
Loss Leader:
The practice of raising the normal price, and then lowering it in order to call it a “sale”
EX: Finish Line raises a pair of Jordan’s to $120, that is normally $100, then puts them back to $100 and calls it a saleSlide4
Types of deception and fraud
Sale price:
A sale is a sale only if the price is below the regular price.
Can be deceptive: if the store raises the price for a day or two then lowers it and calls it a sale
Suggested Retail price:
A manufacturer’s suggested price is usually higher than any retailer expects to actually get for a product.
Ex: Cars!Slide5
Types of deception and fraud
Bait and Switch:
The practice of baiting consumers with an advertised, but nonexistent bargain and then switching them to a more expensive product.
My example at office depot – shredder –
Pyramid Schemes:
A type of financial fraud in which people pay to join an organization in exchange for the right to sell memberships to others
Pyramid schemeSlide6
Types of deception and fraud
Internet and Telephone fraud:
The many different methods of scheming people out of money over the phone
http://www.youtube.com/watch?feature=player_embedded&v=G3p79-M0lHY.comSome things to look out for when an offer is made to you online or over the phone:Too good to be true
www.lookstoogoodtobetrue.gov
Asked for your social security card or credit card number
Must buy something to get something else of greater value for freeSlide7
Types of deception and fraud continued…
Not offered a written contract or sales agreement
You are supposed to act
immediately or the offer will expire quickly
No method is offered to contact the organization
No information about the organization’s business record is availableSlide8
Too many faces of fraud
Here are some scenarios that should bring out the skeptic in you:
Healthcare products that promise to cure incurable diseases
HEALTHY CEREAL?Home-improvement contractors who want you to pay most of the cost before they do the work
Holmes on homesSlide9
Too many faces of fraud
Vacation clubs that require you to send money to join with the promise of inexpensive 1
st
class vacations later
Repair work offered at well below the going rate
Weight-loss programs that promise unrealistic results.Slide10
Lets talk about any scams that you have encountered… or your parents.
Were they similar to these?
How were they resolved?
How about internet fraud?Have any of you tried to deceive anyone…
we are all friends here…Slide11
SCAMS AND FRAUD
http://www.cbsnews.com/video/watch/?id=7398476nSlide12
SCAMS AND FRAUD
Follow the moneySlide13
Homework
Read the
“ID Thieves’ New Tricks: Cybercriminals are getting smart. You can too”
packet and be prepared to discuss it.Slide14
Homework
Re-Read pages 108-112
Write the 1 page
complaint letterSlide15
Resolving consumer problems
HOW TO RESOLVE THE PROBLEM
Wait approximately 3 days to ‘cool down’
Use facts, no emotions, to solve the problemKeep your receipt!Decide what you want before you complainSlide16
Resolving consumer problems
THE COMPLAINT PROCESS
Take it slow
Start with the SellerGo to the storeTalk to the managerEmail / write the manufacturerContact a consumer group or professional organizationMedia help
Check online, sometimes there is a way to resolve problems through the websiteSlide17
Resolving consumer problems
Government Involvement
Lawsuit
You may contact a lawyer and take the claim to courtSmall Claims courtDifferent states have different maximums ($1000-$10,000)You do not need a lawyer for this courtIf you lose, you have to pay the fees of the person you
are suing