What is The Difference Between Sharp Business Practice and Fraud?
Fraud is a massive problem around the world according to all the estimates being put out by the authorities. But what is the distinction between fraud and what might be termed over zealous selling techniques by enthusiastic salesmen?
Where do you draw the line? Take for instance the rogue trader who sees an elderly lady's driveway full of potholes. He lays some tarmac that is left over from a job that he had been working on and then confronts the surprised homeowner with a big bill for the repair.
Older people are more vulnerable to this approach and it clearly is a scam that can be punished by criminal sanctions. However, what about the window salesman that knocks at the same vulnerable person's door and starts pointing out the rotten wooden window frames. This time the vulnerable person is informed about the price before the job commences. She says that she does not want the replacement windows but is told that she must have them as her existing windows will not last the approaching winter.
She says that she wants to think about it but is told that she must write a cheque there and then to achieve the best deal. After what often turns out to be many hours of persistence, the elderly lady might sign on the dotted line just to get rid of the salesman - is this fraud?
When you open your Sunday paper a free lottery scratch card will often drop out. Generally there is always a prize to be won so you want to register your winning ticket. Of course the best way is to ring up for your winning code - this will be a premium rate call that will cost at least £10, and this is probably more than the value of the prize that you have won.
In fact it is the premium rate calls that are funding that particular lottery business. Let's face it, would you really buy a lottery ticket for £10? The shiny ticket and hidden small print are designed to get you to spend money on something that you do not want. Is this fraud?
Finally, television adverts regularly encourage you to take up on-line gambling or some other on-line game. Images of ordinary people having fun and promises of free credits to get you started draw you in to a solitary world of on-line gambling where the reality is wasted money or even worse - an addiction to that gambling. Surely this is deception - that is fraud?
The glossy hype attached to many products makes them seem attractive, or it might be that they are simply over-sold, either way it is misrepresentation and sharp business practice. The trouble is that this practice seems to be a way of life these days but in most law abiding peoples' minds this is a form of fraud.
About the Author
Mark Jenner is a Fellow of the Institute of Chartered Accountants in England and Wales, a Certified Fraud Examiner and has a Masters Degree in Fraud Management. He works as a forensic accountant and advises business large and small on how to be secure from the fraudster =>
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