Fraud involves lying or misrepresenting information for profit. Types include false advertising, tax evasion, investment schemes, insurance fraud, and identity theft. Investigations are handled by various authorities, with penalties including fines and jail time. False advertising is investigated by the FTC, tax evasion by the Department of the Treasury, and investment fraud by the SEC. Insurance companies employ fraud investigators, and identity theft is investigated by law enforcement agencies.
Fraud is criminal behavior that generally involves making a profit by lying or otherwise misrepresenting information. Common types of fraud include false advertising, tax evasion, investment schemes, identity theft, and insurance fraud. A fraud investigation in the United States can be conducted by the police or tax agencies, insurance investigators, or entities such as the Securities and Exchange Commission. In the United States, penalties for criminal fraud can include fines and jail time.
False advertising is fraud perpetrated by a business on its customers and usually involves false or misleading marketing claims. This can be a serious criminal issue if the claims lead to harming consumers from a product. A fraud investigation involving false advertising in the United States is usually done by the Federal Trade Commission (FTC). Consumers can also have claims for false advertising in the civil court system and can choose to participate in class action lawsuits if the fraud affects enough people.
Tax evasion is another type of fraud in which a person illegally attempts to evade his or her tax liability. In the United States, a federal tax fraud investigation is handled by the Department of the Treasury. Tax evasion may also involve state or local agencies if the fraud investigation involves property or sales taxes.
Investment frauds such as Ponzi and pyramid schemes scam many investors every year out of hard earned money. These schemes usually involve supposedly high-interest investment returns that are actually paid by the principle investors. Fraud investigations of this type can be handled by different authorities, depending on whether the scheme has been implemented across state lines, and can involve the Securities and Exchange Commission in the event of a violation of investment rules. These types of frauds can wipe out a victim’s retirement and other savings.
Insurance fraud can take many forms. A simple insurance fraud involves someone filing a false theft report for a valuable item. More complicated auto insurance fraud requires teams of criminals to insure vehicles that have already been damaged in accidents and then file claims. Other unscrupulous people will fake accident or workplace injuries to collect liability or worker compensation. Insurance companies often employ special fraud investigators to monitor this activity and work closely with local law enforcement when there is evidence that fraud has occurred.
Identity theft is a growing problem in the electronic age. Unscrupulous hackers acquire personal data and use it to directly steal money or credit card fraud. These types of frauds can have a huge impact on a victim’s credit rating. E-fraud is a serious criminal matter and is being investigated by loan companies and federal and international law enforcement agencies.
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