This file is available as a pdf file
Brenda Procter, M.S., State Specialist & Instructor, Personal Financial Planning, University of Missouri Extension
What is fraud?
It is fraud when a seller of goods or services lies
about an important fact or fails to tell the consumer
about an important fact. Con artists can commit
fraudulent acts against any consumer, but members of
some groups are victimized more often than others are.
Proving fraud, in a legal sense, can be difficult. In
general, a consumer is a victim of fraud under the
- The seller makes a false representation about the
product or service (tells a lie).
- The seller knows that the supposed "facts" are
untrue (knows it is a lie).
- The seller intends to deceive the victim.
- The victim actually believes the untruths.
- The victim suffers damages by relying on the
Who is victimized by fraud and
There are several reasons that any of us might become
a victim of fraud, particularly during difficult times.
Greed can be a factor. The human tendency to want to
"keep up with the Joneses" makes us want more and it is
tempting to think there might really be a way to "get
rich quick" or take shortcuts to get what we want.
Our marketplaces are becoming more complex, and we
are busy. A busy consumer may find it difficult to take
the time to gather all the knowledge needed to make a
sound decision. Dealing with expert liars makes it even
harder. Successful con artists are expert salesmen who
can trick consumers into unsound decisions by snowing
them with too much information or pressuring them to
make a decision with too little information.
Elderly people often fall prey to fraud. They are
more likely to have difficulties refusing high-pressure
sales tactics, may be lonely and will listen to a
seller's scam in order to have someone to talk to, or
they may not have the resources they need to do research
before buying a product.
The average scam runs for 90 days or less. For that
reason, it is critical that all of us who are victimized
react swiftly to fight back. If we don't, the scam
artist who defrauded us is long gone with a new scam,
under a new name, with new victims. Unfortunately, he
also is long gone with our money. He is counting on
getting away with it because consumers are embarrassed
to admit they were victims and don't complain.
What are some types of fraud and
how do I avoid becoming a victim?
Regardless of the specific method that a con artist
uses, there are some tips that can help you avoid fraud:
- If it sounds too good to be true, it probably is!
- Do not be pressured by salespeople into buying it
- Investigate before you invest. If you cannot
afford to lose the money you invest, do not invest in
- Avoid purchasing goods or services from people,
companies, or organizations you do not know (whether
in person, by phone, via the Internet or by mail).
- Be skeptical about unsolicited sales calls.
- Ask callers to send information about the company
in writing and verify it.
- Do not pay for something that is supposedly
- Do not give calling card, credit card, or bank
account numbers to strangers by telephone, Internet or
mail unless you initiated the order for goods or
Guard you social security number. Avoid using it as your driver's license number.
- If you use a cellular phone, request a detailed
billing of calls from your cellular carrier and use a
Personal Identification Number (PIN).
- Before contributing to charities you are
unfamiliar with, check them out with your state
charity regulator, such as the Attorney General's
- Ask for information about a company, price
information, and written estimates from door-to-door
salespeople before doing business with them.
- A contract worth signing can wait until you've
taken the time to understand it.
- Always ask for information and clarification in
- Hanging up is often the best action when you
receive a call offering a fabulous deal over the
- Do not invite a door-to-door salesperson into your
home if you do not want to hear a sales pitch.
- Con artists look like you and me. Even if someone
sounds like they are your friend, take the time to
investigate an offer carefully.
What to do if it happens to you...
If you have been conned, act quickly! Contact local
and state authorities and file a report. Call the
Missouri Attorney General's hotline (1-800-392-8222) and
let them know what has happened. You may find that you
are not alone and that several others have fallen victim
to the same scam. Report the con to the National Fraud
Information Center (1-800-876-7060). If mail was
involved, contact the local postal inspector. Finally,
file a complaint with the Better Business Bureau. Though
the Better Business Bureau cannot help you get your
money back or press charges, by placing a report on file
with them, you may help others from being scammed later.
Most people are embarrassed that they have fallen for a scam, and therefore, have a tendency to not report what has happened to them. However, someone committing fraud cannot be stopped if we do not contact the authorities. Scam artists will continue cheating innocent people until someone reports them. It is also highly likely that you are not alone. If you have been cheated, others probably have been as well. Your report could be the one that ends a scam in your area.
Procter, B. and Schuh, W. (2000). Consumer Beware. Building Strong Families. University of Missouri Extension.
Last update: Tuesday, May 05, 2009