1. Recognizing Deception and Fraud
Section 1.4
Recognizing Deception and Fraud

2. Read Article
Answer: What is Pepsi accusing Coke of doing? Why?

3. Deceptive Advertising
Definition: Advertising that is likely to mislead consumers through false statements, omitted information, or other unfair means.
It is illegal.
FTC empowered to stop it

4. Examples of Deceptive Advertising
Bait and Switch: Retailer advertises a product but has no intention of selling it. They just want to persuade the customer to come into the store and there they can persuade them to buy another product at a higher price.
Example:
False promise of free gifts: A store advertises a free gift but should have no strings attached. Stores need to say “Free gift with purchase”.

5. Example of Deceptive Advertising (cont)
Deceptive Pricing: When a retailer advertises a sale price that is not any better than the everyday price of that particular item.
Example:
Hidden Catches: This happens when hidden charges and fees aren’t advertised. You think you’re getting a good deal but when all is said and done, the fees have added up.

6. Dell and Deceptive Advertising
What type of deceptive advertising is this?

7. Who is Bernie Madoff? Sesame Street explains a Ponzi Scheme
Ballad of Bernie Madoff using FreeCreditReport Song

8. All about Bernie
News clip about Bernie Madoff

9. Fraud
Deceitful conduct designed to manipulate another person for some gain.
Lying
Concealing facts
Repeating something that ought to have been known to be false
Example:

10. Types of Fraud
Pyramid Schemes:
Chain Letters:

11. Fraud and Technology Chain letters via email
Notifications of Winning Lotteries
Earn Money at Home Opportunities

12. Reporting Deception and Fraud
Report Suspicions even if you haven’t fallen victim; save someone else
Contact the FTC or get on their website for a Consumer Complaint Form
Contact the National Fraud Information Center
Contact BBB

13. Check your understanding:
Explain the strategy behind the bait and switch tactic.
What are two signs that a sales offer may be fraudulent?
How can you report suspected cases of fraud?

14. How to Spot a Scam Handout
Complete:
How to Spot a Scam Handout
Due tomorrow