CONSUMER FRAUD GLOBAL HEADQUARTERS • THE GREGOR BUILDING 716 WEST AVE • AUSTIN, TX 78701-2727 • USA CONSUMER FRAUD TABLE OF CONTENTS COURSE INTRODUCTION Course Objective...................................................................................................................................................... xi Course Overview ..................................................................................................................................................... xi Learning Objectives ................................................................................................................................................xii I. CONSUMER FRAUD OVERVIEW Introduction ............................................................................................................................................................... 1 Who Are the Victims of Consumer Fraud? .......................................................................................................... 1 Why Do Consumers Become Victims? ................................................................................................................. 1 Who Are the Perpetrators of Consumer Fraud? .................................................................................................. 1 Why Do Perpetrators Commit Consumer Fraud? ............................................................................................... 2 Video ...................................................................................................................................................................... 2 How Do Perpetrators Execute Consumer Fraud Schemes? .............................................................................. 2 The Three Elements of Fraud ................................................................................................................................ 2 Situational Pressure .............................................................................................................................................. 3 Perceived Opportunity ........................................................................................................................................ 3 Rationalization of the Act ................................................................................................................................... 3 How Does Consumer Fraud Affect Consumers? ................................................................................................ 3 Review Questions ..................................................................................................................................................... 4 II. CONSUMER FRAUD DELIVERY METHODS Introduction ............................................................................................................................................................... 7 Internet ....................................................................................................................................................................... 7 Email ........................................................................................................................................................................... 7 In Person .................................................................................................................................................................... 8 Door-to-Door Frauds .......................................................................................................................................... 8 Seminars ................................................................................................................................................................. 8 Telephone .................................................................................................................................................................. 8 Telemarketing ....................................................................................................................................................... 8 Television ................................................................................................................................................................... 9 Infomercials........................................................................................................................................................... 9 Review Question .................................................................................................................................................... 10 III. ONLINE METHODS USED TO OBTAIN CONSUMER DATA Introduction ............................................................................................................................................................ 11 Online Schemes Used to Obtain Consumer Data ............................................................................................ 11 Technical Vulnerabilities ....................................................................................................................................... 11 War Driving......................................................................................................................................................... 11 Malware ................................................................................................................................................................ 12 Social Engineering ................................................................................................................................................. 14 Phishing ............................................................................................................................................................... 14 Video .................................................................................................................................................................... 15 Video .................................................................................................................................................................... 17 Pharming ............................................................................................................................................................. 18 Consumer Fraud i CONSUMER FRAUD III. ONLINE METHODS USED TO OBTAIN CONSUMER DATA (CONT.) Video .................................................................................................................................................................... 18 Review Questions .................................................................................................................................................. 19 IV. ELDER FRAUD Introduction ............................................................................................................................................................ 21 Elder Fraud ............................................................................................................................................................. 21 Why the Elderly Are Targets ................................................................................................................................ 21 Elder Fraud Schemes............................................................................................................................................. 22 Protecting Against Elder Fraud ........................................................................................................................... 22 Red Flags of Elder Fraud .................................................................................................................................. 23 Review Question .................................................................................................................................................... 24 V. ENTREPRENEURIAL SCHEMES Introduction ............................................................................................................................................................ 25 Franchises ................................................................................................................................................................ 25 Business Opportunities ......................................................................................................................................... 26 Display Racks ...................................................................................................................................................... 27 Vending Machines .............................................................................................................................................. 28 Invention-Promotion Agencies ........................................................................................................................... 28 Vanity Publishing ................................................................................................................................................... 29 Wealth-Building Programs.................................................................................................................................... 30 Work-at-Home Opportunities ............................................................................................................................. 30 Assembly and Crafts .........................................................................................................................................