Consumer Fraud

Consumer fraud is a broad category of unethical and illegal marketplace behaviors engaged in by unscrupulous sellers to the detriment of their customers. Consumers might buy a weight-loss product that is advertised as “guaranteed to lead to significant weight loss in just two weeks,” for instance, but then never lose any weight because the product is a fake. Online consumers may provide payment information yet never receive the product they paid for, or people may donate money to a charity that does not actually exist. Although consumer fraud can take on countless forms—from price misrepresentation, unnecessary repairs, and fraudulent business ventures to false stockbroker information, unauthorized use of credit-card information, and credit-repair scams—at its core, consumer fraud involves a violation of trust. Given this violation of trust, the legitimate business setting in which these crimes often occur, the financial goal of these crimes, and the lack of overt violence, consumer fraud can in turn be classified as one form of white-collar crime. This point is important because it means that one can gain the fullest understanding of consumer fraud by supplementing the relatively limited research on consumer fraud with the broader, more developed literature on white-collar crime. Accordingly, this article presents the classic and contemporary literature on consumer fraud and white-collar crime. That said, excluded from this article are white-collar crime studies that address specific forms of white-collar crime other than consumer fraud. A study specifically on embezzlement or worker-safety violations, for example, would not be included here.