Consumer Fraud

Deceptive business practices are an unfortunate reality in the marketplace. Consumers are constantly at risk of financial losses at the hands of scammers, identity thieves, false promises, and misleading advertisements.

Most victims of consumer fraud are entirely unaware that they have been taken advantage of until the damage has been done. What appeared to be a perfectly legitimate business transaction is later revealed to have been an elaborate con designed to trick them into parting with their money, exposing their personal information, or making an illegally unfair bargain.

Consumers are protected by both state and federal laws that define the bounds of what constitutes fair and acceptable business practices and harshly punishes wrongdoers when they fail to abide by those rules.

These laws require businesses to be transparent and honest in their dealings with consumers. When businesses or scammers fall short of that duty, their victims are entitled to refunds, restitution, legal fees, and other types of relief to compensate them for their loss.

Common Situations Where Consumer Fraud Can Occur

  • Buying expensive items such as a car or refrigerator
  • Returning items to a store
  • Paying with a gift card
  • Purchasing groceries or gasoline
  • Buying a pet
  • Using a travel agent or buying plane tickets
  • Identity theft
  • Telemarketing scams
  • Online shopping scams
  • Mortgage fraud
  • Fake charities and lotteries
  • Dishonest investment schemes

When a consumer is cheated by a car dealer, buys an expensive appliance that immediately breaks and the seller refuses to honor the warranty, or has their identity stolen online, they need an experienced consumer law attorney to explain their rights, help them track down the perpetrator, involve the appropriate authorities, and recover the compensation owed to them.

Signs of Consumer Fraud

Unfair, deceptive, misleading, and predatory business practices affect virtually every facet of consumer life. Scammers are constantly developing new and more sophisticated means of taking advantage of unsuspecting consumers.

Here are several common types of consumer fraud and the troubling signs that indicate something is potentially wrong:

Credit Card and Debit Card Fraud

  • Charges for purchases you never made on your statement
  • An unexplained drop in your credit balance
  • Several small charges on your account (potentially a sign a criminal has purchased your information and is testing the account)

COVID-19 Scams

  • Robocalls claiming access to new vaccines, cures, and treatments available only from one source
  • A call from someone claiming to be able to provide access to government stimulus funds for a fee

Debt Collection Fraud

  • Calls from a debt collector before 8AM or after 9PM, which are not permitted by the Fair Debt Collection Practices Act (FDCPA)
  • Threats to imprison you if you don’t repay a debt
  • Debt collectors who withhold pertinent information (e.g., the exact amount of the debt or the name of the creditor)
  • Demands that the repayment is in the form of cash, prepaid debit cards, or gift cards

Identity Theft

  • Unexplained withdrawals from your bank accounts
  • Bills from stores you never purchased from
  • Unexplained lines of credit opened in your name
  • Notification from the IRS that more than one tax return was filed in your name
  • Medical bills for treatments you never received
  • Calls from debt collectors for unexplained debts
  • Bills and financial statements that you normally expect stop arriving (potentially a sign that scammers have changed the address on your accounts)

Interest Rate Reduction Scams

  • Promises to reduce your credit card interest rate (for a fee) thanks to a special relationship with credit card companies
  • Robocalls claiming to offer new credit cards with very low or zero interest

Fake Charities

  • Requirements that donations must be paid with cash, gift cards, or wire transfers
  • Refusals to provide detailed information about the group

Fake Sweepstakes

  • Notifications that you are a “winner” to a contest you never entered
  • Demands to pay an administrative fee or attend a meeting before collecting a prize

Mortgage Fraud

  • Requests to sign papers without sufficient opportunity to review them
  • Demands for fee payments before services are rendered
  • Assurances of loan modifications that never happen
  • Instructions to stop making mortgage payments to your lender and instead send payments to an unfamiliar third-party

Avoiding Consumer Fraud

In addition to being on the lookout for specific types of fraud and troubling signs that a scam is being attempted, consumers can take general precautions that limit their exposure to common frauds, such as closely monitoring their credit scores and bank statements, always reading the fine print on credit card offers and sales contracts, and using secure passwords and multi-factor authentication (multiple types of credentials, such as a fingerprint or a one-time emailed code in addition to a password, to log into sensitive online accounts).

Consumer Rights

Merchants, sales-people, contractors, and businesses of all types are constrained by federal and state consumer fraud laws from using deceptive practices when selling goods and services — which includes business to business transactions (businesses can be consumers when making purchases). Under the laws of some states, the deception does not even have to be intentional or explicit. Wrongdoers can be held accountable if they fail to disclose pertinent information or if their practices had the effect of misleading consumers.

Because of these laws, consumers have certain rights, such as the right to be free from:

  • Bait and Switch Tactics: Customers are enticed with an unrealistically low price, or a product the merchant doesn’t actually sell, and then pressured into purchasing a higher-priced or different product.
  • “Lemons:” Vehicles and some other products (such as pets covered by “Puppy Lemon Laws”) with defects negatively affecting their quality, safety, and usability.
  • False Advertising: Misrepresentations about a product or service’s features, materials, ingredients, condition, geographic origin, drawbacks, or price that are told to encourage a sale.
  • Service Prepayment Demands: Requirements for full payment before certain services have been rendered, such as a contractor demanding payment before performing a home improvement.
  • Lack of Disclosure: Copies of any relevant documentation in a business transaction cannot be withheld in most cases, such as credit card agreements, warranty documentation, permits for home projects, insurance certificates, and employment contracts.
  • Pyramid Schemes: Business models based on converting customers into recruiters tasked with finding more members to join and recruit further new members.


The consumer protection acts of many states provide for a range of remedies for victims of consumer fraud. In extreme cases, victims may be entitled to treble damages, which means any monetary damages awarded will be tripled.

Pond Lehocky Giordano offers a completely free consultation with an experienced attorney who can help you determine if you are the victim of consumer fraud and recover the compensation you deserve. For more information, call 1-800-568-7500 or fill out the form on this page.