Consumer Fraud Facts and Filing Complaints

Consumer Fraud is defined as an illegal act of deception in order to obtain an unlawful financial gain at the expense of another person or entity. It can be committed by one or more persons at the expense of others.
Consumer fraud is often referred to as white collar crime, generally committed in areas that will defraud the consumer of money via deceptive practices. Examples of white collar crime include fraudulent dealings with insurance policies, securities, credit card scams, fraudulent banking policies, etc. The methods of consumer fraud are numerous and can include the use of the telephone, mail, Internet web sites, email and many others.

Credit Card Fraud

Credit card fraud is on the rise. Anyone who obtains your credit card information can quickly charge huge amounts of debt in your name and destroy your credit worthiness. Consumers who are victims of credit card fraud can spend countless hours and a significant expenditure of money trying to clear up false credit card charges. Consumers need to monitor their credit report regularly and contact the credit bureaus if there are any charges on their report that are in error. In such an instance, you will need to file an identity theft complaint. The Federal Trade Commission (FTC) provides detailed information on how to get your free credit report. All illegal or unauthorized use of an individual’s credit card should be reported as soon as it is detected. Failure to contest credit card fraud can result in the consumer being unable to obtain credit for purchases of their own, such as for a home or vehicle.

Bank Fraud

Bank fraud is usually a deception practiced by a bank to cause a person to voluntarily relinquish his or her property. It can also be committed in the form of overcharges and unnecessary fees or deceptive practices that are unknown to the account holder. While domestic banks are regulated and can be prosecuted for bank fraud, international bank fraud is extremely difficult to prosecute. If you have been a victim of bank fraud, you should consider contacting an attorney if it seems that the fraud might have happened to other victims and not just yourself. It is possible to put together a class of people to file a class action lawsuit against the bank, which would typically be financed by the team of lawyers and not the victims.

Insurance Fraud

Insurance fraud is typically perpetrated by insured people trying to deceive an insurance company with a false claim in order to wrongfully receive benefits. Internal insurance fraud is committed when an insurance company, its employees or a group of insurers, attempts to defraud it’s customers by means of deception. Frequently it takes the form of selling fake insurance policies with the insurance company pocketing the premiums where no policy actually exists. Some disreputable insurance companies will accept your premiums but, when it comes time to pay out for a claim, they will deny the claim.

Insurance fraud is the second most expensive white collar crime in the United States. The National Insurance Crime Bureau statistics indicate that United States citizens lose over $100 billion annually to insurance fraud. If you suspect you may be a victim, you can contact a consumer fraud lawyer for help in filing a claim.

Internet Fraud

Internet fraud is on the rise and victims fall prey to it almost daily. Federal Trade Commission statistics show that over $200 million in losses were reported back in 2003 alone due to internet fraud. That number has increased dramatically since that time. Half of the complaints to the FTC about internet fraud reportedly involve online auctions. Numerous complaints have also been filed with the FTC about online identity theft, auction fraud, investment fraud and so called “Nigerian money scams” involving cross border Internet fraud where an unsuspecting victim is convinced to advance sums of money in order to realize a much larger gain. Senior citizens are targeted frequently for Internet fraud scams given their lack of online experience and typically being more naive than the average web surfer. For the most part, it is not easy to recover money due to Internet fraud, a crime which should always be reported to the FTC.

Mail Fraud

Any scam used through the United States Post Office to gain money by deceitful practices from a consumer is called Mail Fraud. Around one-third of all consumer fraud is committed through mail fraud. Mail fraud consists of a perpetrator making the promise to deliver certain goods and then not following through on it or delivering something other than what you were led to believe that it was. Common examples include discounted magazine subscriptions and entering a prize eligibility contest. Mail fraud perpetrators may ask for personal information and charge ridiculous amounts for products in hidden fees. They can steal your identity or open accounts by using your information. Like the case with Internet fraud,  it is not easy to recover money due to mail fraud, a crime which should always be reported to the FTC. A government investigation may ensue with some greater likelhood given the use of the US Postal Service to carry out the crime.

Where to File Consumer Fraud Complaints

If you have been the victim of consumer fraud:

When fraud is large enough, either individual in act or in the aggregate, victims can also consult with consumer fraud attorneys to find out their legal rights to file a law suit for damages and to recover losses.

Michael M Wechsler, Esq.

Michael M. Wechsler is an experienced attorney, founder of and former SVP of He has published hundreds of articles online covering a variety of legal topics and regularly provides free legal advice at The Law Forums.

Michael M Wechsler, Esq. – has written posts on Guide.


  1. pheng lee says

    I need an advice about a check bounce over a ($100) hundred dollar and they suit me over ($900) nine hundred dollar. I would like to know that what are my right and their right. Is that consider fraud or not? Do they have the right to bring me to court and suit me under civil law? Please response back to me.

    Thank you,

  2. admin says

    With regard to check bouncing, you should be more worried about a potential criminal issue than the civil lawsuit. The plaintiff will have to prove the damages in court and I doubt they will be awarded such a windfall of 900%.

  3. Mike Wise says

    I filed a complaint with the Better Business Bureau and received an email from an attorney stating that if I did not retract my complaint they would file a libel lawsuit against me, is this even possible? I did not slander them in any way nor did I make any false statements, do they have grounds for filing a libel lawsuit against just for filing a complaint with the BBB?

  4. tim says

    Is there an attorney who I can actually trust, that would offer an initial no charge consultation to see if I have a LEGITIMATE CASE OF COMSUMER FRAUD. I feel that I was a victim of consumer fraud regarding investments.

  5. Flo says

    I had a bankruptcy fraudently listed on my credit report because my name is the same as my mother’s except for middle initial. It was her bankruptcy filing, not mine. All companies removed the report except one company which stopped sending me bills therefore I have no where to make payments. They also have now supposedly sold the account and will not discuss it with me. But the company they say it was sold to has no record. I have been unable to get this one fraudulent filing removed from the credit report. I have now been denied credit due to this inaccurate report. What legal steps can I now take?

  6. keisha terrell says

    I need advice about how to go about handling a situation with WRIGHT BUSINESS SCHOOL charging me for classess Ive tested out of and not wanting to credit my account back for the classes. Ive spoken with my school dean and the staff and cant get anywhere. I know it has to be against the law to charge for things not recieved. I would like to know is there anything I can do. Ive looked and ask for a corporate number and ccant find or recieve one and Im not the only student who is having this problem. Please help!

  7. TheLaw Staff says

    Chances are that the FTC will assist you with any type of fraud concerning federal matters (involving the US as a whole, not a specific state.) Try using some of the links we’ve provided to the FTC. For fraud in the state, you may want to begin with the state attorney general.