According to the Internet Crime Complaint Center (IC3), some 300,000 complaints regarding fraud were made in 2017, and Americans reported losses of more than $1.4 billion USD. But what is fraud, exactly? And what should be your first step if you are facing fraud charges?
A Definition of Fraud
“Fraud” is a blanket term, and there are many different types of fraud that violate United States laws. These include, but are not limited to:
- Mail fraud
- Credit Card fraud
- Check fraud
- Bank fraud
- Medicaid fraud
- Insurance fraud
- Contractor fraud
- Forgery or counterfeiting
All types of fraud share at least one characteristic: the intent to deceive someone else for one’s own personal gain. Usually, that gain is financial in nature — but not always. In some instances, the fraud is committed for political gain. In others, it is used to acquire goods, such as prescription medication, that would otherwise be difficult or impossible to get.
What Are Some Examples of Fraud?
Have you ever received a phone call from someone who congratulates you for winning something valuable, like a cash prize or a free vacation? All you have to do to claim your prize is to verify your Social Security number or your bank account information. Other times, the caller asks you to pay a small “handling fee” before the money can be deposited in your account.
This is a prime example of fraud.
Some other examples of fraud include those notorious Nigerian princes who perpetrate fraud through emails, Ponzi schemes like the one perpetrated by Bernie Madoff, writing bad checks, misrepresenting your income to qualify for social services like Medicaid or food stamps, and identity theft.
Recently, fraud has entered the spotlight thanks to the college admissions scandal. Actresses Lori Loughlin and Felicity Huffman, among several dozen other defendants, are charged in a multi-million dollar scheme to use fraud and bribery to sidestep college admissions regulations and ensure that their children are admitted to top-tier universities.
In addition to allowing people to connect with long-lost friends, watch old episodes of the Dick Van Dyke Show on demand, and discuss conspiracy theories, the Internet has also made it possible for fraudsters to flourish. Some of the types of fraud that are perpetrated using email, websites, apps, and other electronic means of communication include:
- Confidence fraud, including romance/relationship fraud
- Data breaches, both personal and corporate
- Investment fraud
- Email account compromise
- Non-payment or non-delivery
- Identity theft
It is important to realize that a person can be charged with several types of fraud stemming from the same incident. For example, if a person attempting to commit fraud communicates with his or her would-be victim by both snail mail and email, he or she can be charged with internet fraud and mail fraud.
What Is Friendly Fraud?
So-called “friendly fraud,” also called “chargeback fraud,” is another incredibly common crime. This type of fraud occurs when an individual purchases an item or pays for services and then later requests a refund or chargeback from the issuing bank or credit card company.
Friendly fraud most often occurs in “card not present” transactions — that is, if the individual does not present a physical copy of the debit or credit card to the merchant. Internet transactions and telephone purchases are both examples of card not present transactions that are vulnerable to fraud.
In these scenarios, the accused may claim that:
- They never received the product or service
- The product arrived, but was faulty or damaged
- They canceled the order, but the item was shipped to them anyway
- The product does not match its description on the merchant website
- They returned the item but never received the refund
- They did not authorize the transaction or their card was compromised
It is very difficult for a bank or credit card company to disprove these claims. It can also be a time-consuming process. Therefore, many companies choose to eat the loss from this chargeback, rather than pursue a dispute.
The Possible Charges for Fraud
Since fraud encompasses such a wide range of criminal acts, the charges that a fraudster could face are difficult to narrow down. Fraud can be prosecuted as either a misdemeanor or a felony. It depends on the jurisdiction in which the crime was committed, and the allegedly fraudulent act itself.
Fraud charges will also depend on the amount of money, or potential amount of money, involved. If the defendant is a first-time offender, he may receive fewer charges or a lesser sentence if he is convicted.
Other charges can be leveled at the same time as fraud charges. And it is possible to face multiple charges of fraud. For instance, if you steal someone else’s credit card and use it several different times, you could face one count of fraud for each transaction.
In short, there are many variables at play in any fraud case. If you are facing fraud charges, there is no telling what kind of punishment you may receive.
Is It Possible to Unknowingly Commit Fraud?
Yes. This is one of the scariest aspects of fraud. It’s very possible to break the law and not realize that you are committing fraud. Such situations can arise when one person lets another use their credit card, and then the relationship sours. The credit card holder could accuse their ex-partner or -friend of fraud, even though the charges were authorized at the time.
If this happens to you, it’s important to contact an attorney who specializes in fraud right away. Otherwise, you could be facing penalties including fines and even jail time.
What to Do if You Are Facing Fraud Charges
If you have been charged with one or more counts of fraud, your best bet is to secure the services of an attorney. Find one who has experience dealing with the specific type of fraud case in which you are now embroiled.
Criminal defense lawyers will provide free, no-obligation consultations to discuss the particulars of your case and advise you as to the next steps. Don’t let fraud charges ruin your reputation. Contact Baton Rouge criminal attorney Carl Barkemeyer today.