Updated: Oct 25, 2021
By Shreya Sharma, DRASInt Risk Alliance Private Limited
A consumer is someone who buys goods for consumption and not for resale or commercial purpose. He thus plays a vital role in the economic system of an economy. According to Consumer Protection Act 1986, “consumer means any person who buys goods or hires any services and make use of utilities or hires any service for consideration which has been paid, or promised, or partially paid or promised”
Consumer frauds are the illicit activities that involve deceit or trickery and are perpetrated against an individual or mass customers often resulting into financial loss or physical harm (Brightman, 2020). Consumer frauds are investigated and prosecuted by regulatory agencies.
These frauds include marketing defective products that result in consumer injury or death, publishing false advertisements (e.g., “bait and switch”), misrepresenting the condition of homes and other real property (e.g., failing to disclose hazardous conditions, tax liens, or the presence of toxic substances), selling motor vehicles with bogus certifications (e.g., fictitious odometer statements, non-existent warranties, or counterfeit inspection stickers), overbilling or generating fraudulent fee statements for professional services, pressuring individuals to invest in “get rich quick” schemes (e.g., high-risk stocks, multilevel marketing strategies, or uninsured bonds or securities), marking counterfeit products or selling inferior quality goods at excessive prices, and tampering with foods, medicines, cosmetics, and other consumer items.
Scams such as those that involve false loan promises, advance-fee fraud, and phony- business employment opportunities serve as easy opportunities for dishonest organizations not only to make a “fast buck” but also to obtain credit-card and other personal information that can be used to commit identity-fraud offenses. Moreover, the Internet allows the smallest illegitimate enterprise to appear professional and reach a broad cross section of consumers. Variations of traditional confidence games, such as “get rich quick” pyramid schemes, fictitious charities, and unsolicited e-mails announcing a free trip, have become common place. All that is necessary is that the addressee provide his or her social security number or other identifying information, date of birth, and credit card number or other confidential details. According to reports:
Consumers have maximum shopping apps per person in the India – an average of 4 per person. Just see which all you have used recently: rt, Amazon, eBay, Myntra, Jabong, Snapdeal, Junglee, OLX, Makan etc.
51% of consumers in India have experienced a retail fraud.