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Part E. Consumers and Law in the USA
Section 1: Consumer Fraud Section 2: Frequently Asked Questions
Section 1: Consumer Fraud Pre-reading question: What do you remember about fraud in Europe as was described in Part В (Section 1) of this book? Skim and scan: Read the text quickly and answer the following question: Is fraud described here similar to that shown in Part B? Text 1 Fraud costs North American consumers billions of dollars per year. The act of deceiving unsuspecting consumers can be easily committed, difficult to prosecute and very profitable for the criminals. Whether the financial loss is large or small, no one likes to be swindled or conned. The unwary can be easy marks for criminals, unaware that they have been defrauded or too ashamed to admit it when they discover that they are a victim of fraud. The best way to reduce fraud is through increased awareness. The greatest enemy to the perpetrator of fraud is the informed consumer. Fraud can take many different forms, as the only limit to the con artists is their creativity and imagination. The following descriptions do not provide an exhaustive list of fraudulent practices, but serve to provide an indication of some of the more common consumer fraud schemes. Pyramid or Chain Referral Schemes
A pyramid or chain referral scheme is a marketing program based on convincing people to buy the right to sell others the right to market a particular product or product line. Promoters select a product and sell large or overpriced inventories to «distributors», with the added incentive of allowing the distributors to sell sub-distributorships. The profit is earned primarily through investors enlisting new recruits who in turn enroll more recruits. In order to recoup the initial investment, new recruits are encouraged to sell new distributorships and there is little real concern given to selling the actual product or service to the public. The attraction of the pyramid scheme is that it offers ah unusually high rate of return on the initial investment. Investors are typically advised that they can get a full return on their money by getting two or more «new» investors to make an investment. The new investors must then get two or more new investors and so it goes, on and on... Promoters fail to tell or deliberately conceal that profit from this system becomes mathematically impossible for other than the initiators of the scheme. Similar pyramid schemes are also appearing on the Internet. Phoney Bank Inspector
An unknown person implies that he/she is a bank representative or working with the police to investigate the misappropriation of money at your bank. Your assistance is required to trap a dishonest bank employee. You are asked to visit your bank and withdraw money from your account. The con artist contacts you after the withdrawal, produces phoney identification and takes possession of your money. You are assured that the money will be deposited to your account within a couple of days... The phoney bank inspector and your money then disappear. Your entire savings can be wiped out within minutes. Boiler Room Operations
Numerous employees are hired by a con-artist as telephone solicitors to sell products or solicit donations for charitable organizations. The products are frequently of questionable value and the charities are fictitious or, they receive little or nothing. These schemes work well, as each victim consumer is taken for only a moderate amount and they do not usually pursue the issue. However the small-to-moderate individual amounts add up to thousands of dollars for the boiler room operator. Be prudent and verify the organization or product before making a commitment.
Vocabulary notes
Words and Grammar a Write down the verbs from which the following nouns are formed:
deceipt –..... to decive.... promoter.................................. encouragement................................... distributor............................... recruit.................................................. perpetrator............................. trap...................................................... commitment............................. swindler..............................................
b Write down the word families of the following words:
с Match the English and Russian equivalents:
d Encircle attributes in the following extracts from sentences and write what parts of speech they are expressed by:
the act of deceiving consumers .. (of + gerund).......................................................................................... increased awareness..................................................................................................................................... a chain referral scheme............................................................................................................................... a marketing program.................................................................................................................................... the right to market a particular product....................................................................................................... overpriced inventories................................................................................................................................. incentive of allowing the distributors to sell............................................................................................... sub-distributorships..................................................................................................................................... the informed consumer................................................................................................................................
e Translate the following words and word combinations into Russian:
no one likes to be swindled to get a full return of money the unwary to fail to earn profit to be too ashamed to admit to conceal smth deliberately to take many different forms
f Write out the English equivalents from the text:
независимо от того, велика или.................................................................... мала финансовая потеря.................................................................... привлекать новых членов (пирамиды).................................................................... капиталовложения на начальной.................................................................... стадии (пирамиды).................................................................... поймать (в ловушку) нечестного................................................................... банковского работника.................................................................... все ваши накопления могут ис-................................................................... чезнуть в одну минуту.................................................................. прежде чем вступать в какую-.................................................................. либо cделку (брать на себя какие-либо.................................................................. обязательства) g Explain the meaning of the following words in English and write Russian equivalents:
perpetrator of fraud.......................... phoney bank inspector............................................. con artist........................................... boiler room operator................................................. promoter – distributor – recruit.....................................................
Suggested activities
h Write down the answers using the text:
i Write down a few sentences showing the steps a phoney bank inspector takes to defraud a client.
j Summarise what the text says about boiler room operations and say why Americans call such operations boiler room operations.
k Write down questions for the following answers:
1........................................................ Judging by this text boiler room Are boiler room operations widely..... operations are quite common practiced in the USA........................... in the USA. 2.......................................................... Yes, they often mention charitable organizations. ............................................................ 3........................................................ Certainly they are fictitious. 4........................................................ No, sometimes they sell various ............................................................ goods of questionable value. 5........................................................ Yes, consumers pay only moderate amounts. ............................................................ 6.......................................................... No, usually they don't turn to police. ............................................................
l Agree or disagree and support your view-point:
1 Pyramid schemes were very common in Russia some time ago. 2 Boiler room operations are popular in Russia too. 3 Consumers are becoming increasingly prudent. Text 2
The Pigeon Drop Scheme
The pigeon drop scheme has many variations and the following is but one possible scenario. A stranger approaches you on the street and starts up a conversation. As you are conversing another stranger nearby claims to' having just found a large amount of money. The discussion turns to what should be done with the money. Stranger number two claims to work for a lawyer and leaves to seek legal advice. The finder returns to say that the lawyer advises to say that the money should be put into a trust for a certain amount of time, until the owner is located. If unclaimed at the end of the time period, the money is to be shared among those in the group. However, to ensure that all those in the group are legitimate, a specified amount of money is to be deposited in the trust by each member of the group. The con-artist then adds that once the lawyer has all the money, for an additional fee, the waiting period can be waived. Both strangers then advise you to withdraw the amount of money required. The stranger who claims to work for the lawyer then offers to take the money to the lawyer, sign the papers and return with your share. The stranger then returns and advises that the lawyer wants to speak to you personally, and gives you directions to the office. Your search for the office is fruitless and you soon realize that you have been conned. This con, like many, appeals to a weakness in human nature... the desire to get something for nothing. NEVER GIVE CASH TO A STRANGER!!! Land Speculation
People wishing to purchase a vacation or retirement property often find themselves trapped in land investment schemes. Through the use of slick advertising, unscrupulous promoters seduce potential victims into buying worthless property. If the price seems too good to be true or it is «an urgent once in a lifetime opportunity» you may be buying a desert bed miles from civilization or swamp land that remain under water even during a drought. Never purchase property sight unseen. Visit the area, view the property, and have it properly appraised. DO YOUR HOMEWORK... INVESTIGATE BEFORE BUYING!!! Home Improvement Schemes
Most home improvement contractors are legitimate and provide a useful service. A small percentage of these contractors are not so honest. Con-artists practising home improvement schemes often solicit contracts from home owners by misrepresenting the necessity for repairs or the value of the home improvements. These operators will ask to be paid in cash, often in advance or with large deposits in advance. The contractual work is then often poorly done or not performed at all. Before making a commitment: • Check with the Better Business Bureau regarding the honesty and reputation of the contractor; • Obtain other estimates from reputable contractors; • Never pay for the work in advance; pay after it has been completed and examined; • If the person represents a utility company ask for proper identification; • Carefully read all forms and contracts before signing; • Never let anyone rush you into signing a contract or handing over cash.
§ Vocabulary notes
§ Suggested activities
a Complete the following sentences using the text:
1 Another stranger claims to having just found a large.......................................................... 2 The finder returns to say that the money should................................................................... 3 If unclaimed the. money is.................................................................................................... 4 A specified amount is to be..................................................................................................
b Write down answers to the following questions:
с Write a few consecutive sentences showing how the pigeon drop scheme works. You may start like this:
You are walking along the street. A stranger approaches you and says...................................................... d Repeat how people can be conned when they wish to buy some land.
e Agree or disagree and support your viewpoint:
1 Unscrupulous promoters seducing potential victims always act through slick advertising. 2 People never buy property without seeing it first.
f Explain the meaning of the following sentences in English and translate them into Russian:
1 A certain percentage of home improvement contractors are not honest. 2 They often solicit contracts from home owners by misrepresenting the necessity for some work. 3 They will ask to be paid in cash and often in advance.
g Write out all the tips (советы) from the text. Say which of them seems most important to you and why.
h A class-room discussion: Various frauds and the consumers.
  Конфликты в семейной жизни. Как это изменить? Редкий брак и взаимоотношения существуют без конфликтов и напряженности. Через это проходят все...  Что делает отдел по эксплуатации и сопровождению ИС? Отвечает за сохранность данных (расписания копирования, копирование и пр.)...  Система охраняемых территорий в США Изучение особо охраняемых природных территорий(ООПТ) США представляет особый интерес по многим причинам...  Что будет с Землей, если ось ее сместится на 6666 км? Что будет с Землей? - задался я вопросом... Не нашли то, что искали? Воспользуйтесь поиском гугл на сайте:
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