Business Fraud

Business fraud consists of dishonest and illegal activities perpetrated by individuals or companies in order to provide an advantageous financial outcome to those persons or establishments. Also known as corporate fraud, these schemes often appear under the guise of legitimate business practices. An array of crimes fall under business fraud, including the following:

  • Charity fraud: Using deception to get money from individuals believing they are making donations to legitimate charity organizations, especially charities representing victims of natural disasters shortly after the incident occurs.
  • Internet auction fraud: A fraudulent transaction or exchange that occurs in the context of an online auction site.
  • Non-delivery of merchandise: Fraud occurring when a payment is sent but the goods and services ordered are never received.
  • Non-payment of funds: Fraud occurring when goods and services are shipped or rendered but payment for them is never received.
  • Overpayment scheme: An individual is sent a payment significantly higher than an owed amount and is instructed to deposit the money in their bank account and wire transfer the excess funds back to the bank of the individual or company that sent it. The sender's bank is usually located overseas, in Eastern Europe for example, and the initial payment is found to be fraudulent, often after the wire transfer has occurred.
  • Re-shipping scheme: An individual is recruited to receive merchandise at their place of residence and subsequently repackage the items for shipment, usually abroad. Unbeknownst to them, the merchandise was purchased with fraudulent credit cards, often opened in their name.

Tips for Avoiding Business Fraud:

  • Purchase merchandise from reputable dealers or establishments.
  • Obtain a physical address rather than simply a post office box and a telephone number, and call the seller to see if the telephone number is correct and working.
  • Send an e-mail to the seller to make sure the e-mail address is active, and be wary of those that utilize free e-mail services where a credit card wasn’t required to open the account.
  • Consider not purchasing from sellers who won’t provide you with this type of information.
  • Purchase merchandise directly from the individual/company that holds the trademark, copyright, or patent.