Consumer Fraud Flashcards
1
Q
Common types of consumer fraud (1-3)
A
- Advance-fee swindles
- Scavenger
- Affinity Fraud
2
Q
Common types of consumer fraud (4-6)
A
- Credit Repair Scams
- Scholarship services
- Giveaway schemes
3
Q
what are advance fee swindles
A
false promises of delivery of product or service
4
Q
What are scavenger/revenge schemes
A
asks if they want to put unethical company out of business and get money back
5
Q
What is a Ponzi Scheme
A
new investors money is used to make payments to earlier investors
6
Q
Key element of Ponzi Scheme
A
initial investor paid with subsequent investor money, NO LEGITMATE COMMERCE HAPPENING
7
Q
Red Flags of Ponzi Scheme
A
- Too good to be true
- low risk high reward
- high-pressure sales tactics
- lack of transparency
- complex trading strategies
- pressure to re-invest
8
Q
What is a pyramid scheme
A
continually recruiting new members
9
Q
Key element of pyramid scheme
A
significant revenue comes from recruitment
