|
Almost every state comes with a set of consumer protection
laws. However, many commercial bigwigs tend to overlook the
major impact that consumer protection laws can have on their
commercial dealings. Although commercial fraud is
considered to be affecting only a smaller section of the
home improvement contractors, yet, the consumer protection
laws have a major impact in the dealings of large commercial
construction units. Likewise, it can also be used on a
business-to-business level. Understanding the consumer
protection laws is thus highly necessary for both the
prevention of litigation and also the protection of the
company when it acts in the consumer’s capacity.
What is commercial fraud?
Commercial fraud cannot be restricted to a specific
definition. Yet, the following elements can be considered as
the key features of a consumer fraud.
When there is an element of deceit or fraud in providing
misleading, inaccurate and incomplete information by the
fraudster.
On close reliance of the deceit, it will be observed that
the information provided by the fraudster omits and induces
the fraud’s target to send some valuable item that belongs
to him in the legal light.
There is a major economic dimension to the specific
fraud.
The fraudster might use or misuse, compromise or damage
the specific set of commercial systems and their highly
valuable instruments that is likely to create an
international impact.
The activity of the fraudster results in the loss of
major value. The fraudster here is regarded to define and
identify all those people who are attempting or perpetrating
a fraud.
At the same time, consumer frauds also require showing
of;
- A proper misinterpretation, being aware of the omission or
the violation of the law
- A connection or relation with a distribution, merchandise,
sales, rental or real estate.
Factors that indicate commercial fraud
There are several factors that indicate commercial fraud.
Some of them are listed below.
Sending irregular documents- Almost every kind of
commercial fraud involves the issuing and use of documents
that are not conventionally used for the type of transaction
that they are intended for. These documents are likely to
contain remarkable irregularities either on an individual
level or when tallied with the rest of the documents.
Misusing the technical terms- Commercial frauds
are also found to misuse the technical terms by either using
the proper term in an irrelevant context or by coming up
with a lofty and well sounding term for gaining credibility.
This is usually done in order to cover the implausible parts
of the scheme or to either impress or to intimidate the
potential victims.
Inconsistencies in the transactions- In order to
imitate the aspects of the genuine and relevant
transactions, commercial frauds often come with untrue or
completely conflicting statements or set of facts. They can
also omit the facts and have other serious inconsistencies.
Misusing names- The individuals with a fraudulent
scheme often seek to improve their personal credibility or
the authenticity of the scheme by associating it with the
names of acclaimed people or organizations. Likewise, the
fraudster might also use the names of those individuals that
the victim is likely to know.
Unnecessary secrecy- Most of the commercial frauds
are likely to be seen imposing undue secrecy over several
issues which includes the existence or the authenticity of
the opportunity that you’re likely to invest in, the type
and nature of the impending investment, the mechanisms and
structure of the investment and your source of return.
Highly complex or unnecessarily simple transactions-
Commercial frauds are often schemed to be extremely
complex in order to baffle the consumers about the basic
fundamentals of the transactions. It is also likely to
include several illogical or convoluted representations
which also include impenetrable documentation. At the same
time, there are certain other commercial frauds that are
unbelievably simple and informal with extremely little
explanation or documentation, despite their close
association with a complex financial transaction.
Frustrating the diligence- As diligence is one of
the key tools through which the suspected parties can be
explored and the shady transactions can be avoided, it is
one of the major goals of the fraudsters to frustrate the
extensive and proper use of diligence.
Abusing incentives- Commercial frauds are likely
to take the advantage of the performance of a specific
entity by luring incentives, gifts, offers and favors in
exchange for consideration which, otherwise, would never be
possible. This is also further done in order to overlook and
ignore certain questionable activities.
Psychological inducement and manipulation-
Fraudsters are also likely to entice the victims by using
psychological inducements and certain manipulation tactics,
initially for persuading them for participating in a
specific fraud and eventually to trap them with respect to
the authentic or arbitrary illegality about their
participation in the fraud. Such trapping is induced in
order to distract them or to get their silence about the
more serious commercial fraud which is likely to be
committed.
Exploit weaknesses of the victims- In many cases
it is observed that the commercial frauds have exploited the
weaknesses in the systems of control in order to take an
advantage to the general emotional impulse right after a
major natural or man-made disaster.
Immediate transfer of funds- Commercial frauds are
often observed to pressurize the potential investors to make
a quick decision and to immediately transfer the funds,
thereby leaving little scopes of expert guidance, advice or
diligence.
How can consumer protection laws help you?
In the occurrence of a commercial fraud, consumer
protection laws can be highly beneficial. These laws have
been specifically meant for promoting the truth and proper
dealing in the marketplace. Most of these laws were formed
in the early 1960s in order to protect the consumers from
fraudsters. Over the last many years, these laws have been
expanded and altered for providing private causes of action.
This means that an individual or a consumer can file a
lawsuit under these specific guidelines for the damage and
injunctive relief. Lawmakers of the state felt that it was
highly necessary for the consumers to give a way for
protecting themselves against the business entities that do
not act in a proper, faithful and authentic manner via their
omissions and actions.
|
