Consumer Fraud & Class Action Lawsuits
Consumers have a wide variety of rights and protections under California and federal law. At times, large corporations may take advantage of consumers through false advertising, misleading contract terms, hidden charges and fees or predatory lending practices and rebate scams.
Consumer fraud refers to a wide range of crimes that revolve around purchases, where people pay money for things they don’t want or don’t get what they paid for, both products and services. Fraud against consumers can take place in person, by telephone, or online. It can come in forms of false and misleading advertising, misleading financial transactions, investment fraud, identity theft or identity phishing fraud. According to the Federal Trade Commission (FTC), consumers report nearly $350 million in losses from consumer fraud annually. Anybody who buys things or pays for services can be a victim of fraud, when they find themselves paying for things that are not credibly delivered or when they lose control of their property or cash.
Sometimes, consumer fraud is a major criminal undertaking with many thousands or even millions of victims. Sometimes the extent of the crimes is murky and unclear and sometimes it’s a matter of well-documented public record.
Large-scale consumer fraud has occurred in a wide range of industries.
In finance, Ponzi schemes where investors pour their savings into non-existent enterprises can absorb the savings of many thousands of families.
In areas of medicine or nutrition, products that widely advertise as health aids can contain thirty-times more empty calories than is actually nutritionally advisable.
A lot of attention has been paid to the abuses of telemarketers. Not only are unsolicited sales calls obnoxious to many, but often the products they offer do not meet claimed quality standards, and sometimes lead to identity theft or extortion. The Telemarketing and Consumer Fraud and Abuse Prevention Act is a set of standards and rules that provide the Federal Communications Commission grounds for criminal conviction for fraud in telemarketing.
However, there is no provision for consumer compensation in the act.
Other areas of consumer fraud include:
- False advertising
- Credit card charges — late fees, over-credit-limit fees, foreign transaction fees
- Hidden bank charges
- Loan transactions — misleading terms, hidden charges and fees
- Predatory lending practices
- Bait and switch
- Misrepresentation and fraud
- Misleading or hidden contract terms
- Funeral home misconduct