CONSUMER FRAUD - AN EMPIRICAL PERSPECTIVE - SUMMARY

• NCJ Number: 52676
• Author(s): J G SCHUBERT; R E KRUG; A M ROSE
• Date Published: 1979
• Length: 78 pages
• Grant Number(s): 76-NI-99-0122
• Sponsoring Agency: US Dept of Justice
• Corporate Author: American Institutes for Research; National Consumer Law Ctr
• Sale Source: American Institutes for Research; Superintendent of Documents, GPO; National Institute of Justice/
• Publication Type: Report (Study/Research)
• Language: English
• Country: United States of America

Annotation

THIS REPORT SUMMARIZES OBJECTIVES OF A CONSUMER FRAUD STUDY, ALONG WITH THE RESULTING GOVERNMENT INTERVENTION STRATEGIES AND RECOMMENDATIONS FOR THEIR IMPLEMENTATION.

Abstract

THE GENERAL PLAN FOR THE LEAA-SPONSORED CONSUMER FRAUD PROJECT CONSISTED OF THREE PHASES. THE PURPOSE OF THE FIRST PHASE WAS TO DESCRIBE THE NATURE, SCOPE, AND CHARACTERISTICS OF CONSUMER FRAUD AND THE LAWS AND REGULATIONS INTENDED FOR ITS CONTROL. THE SECOND PHASE WAS TO EXPAND ON THE FIRST BY COLLECTING A LARGER AND MORE FOCUSED SET OF CONSUMER FRAUD EVENTS AND BY EXAMINING THE EFFECTIVENESS OF EXISTING CONTROL MECHANISMS IN ORDER TO DETERMINE THE REQUIREMENTS OF NEW OR MODIFIED PREVENTION AND CONTROL SCHEMES. THE PRODUCT OF THE THIRD PHASE WOULD THEN BE A SET OF RECOMMENDED APPROACHES OR STRATEGIES TO PROTECT CONSUMERS FROM FRAUD. IN THE COURSE OF THE FIRST TWO PHASES, CASE HISTORIES OF CONSUMER FRAUD EVENTS WERE COLLECTED, AND QUANTITATIVE PROFILES OF VARIOUS PATTERNS OF CONSUMER FRAUD WERE DEVELOPED. WORKING FROM THESE DATA, SOME 16 APPROACHES TO COMBATING CONSUMER FRAUD WERE PROPOSED AND ORGANIZED INTO THE FOLLOWING SIX GROUPS: (1) PAYMENT PLANNING--INVOLVING THE RESTRUCTURING OF PAYMENT PROCEDURES TO ALLOW CONSUMERS MORE FLEXIBILITY IN THE FACE OF POSSIBLE FRAUD; (2) POSTSALE ALTERNATIVES--OPTIONS GIVING CONSUMERS THE OPPORTUNITY TO EXERCISE AUTOMATIC CANCELLATION RIGHTS; (3) COMPLAINT MEDIATION--GOVERNMENT AID IN NEGOTIATING CONSUMER SATISFACTION; (4) PRIVATE REMEDIES--OPTIONS ALLOWING CONSUMERS TO INITIATE PROCEEDINGS AGAINST FRAUDULENT MERCHANTS WITHOUT INVOLVING A THIRD PARTY; (5) COVERAGE FOR CONSUMER LOSS--PROVIDING RESTITUTION TO VICTIMS OF CONSUMER FRAUD BY REQUIRING BONDING, INSURANCE, AND PREFERENTIAL TREATMENT FOR CONSUMERS DURING BANKRUPTCY PROCEEDINGS; AND (6) DOCUMENT SIMPLIFICATION--REQUIRING A BALANCE OF INFORMATION BETWEEN THE MERCHANT AND THE CONSUMER IN ALL TRANSACTIONS WHERE PRINT MEDIA ARE INVOLVED. RECOMMENDATIONS FOR IMPLEMENTATION ARE DISCUSSED WITH REGARD TO PRIORITY TARGETS AND SUGGESTED ACTIONS BY THE PRIVATE SECTOR AND AT THE FEDERAL, STATE, LOCAL, AND LEAA LEVELS. TABULAR DATA AND THREE APPENDIXES ARE ATTACHED.