Some business transactions require a great deal of trust between all parties involved. When you're a consumer, you often put a lot of faith in the person or company you're buying from. You trust that the product is worth the price you're paying for it, that the product is safe, and that it will effectively do what it's supposed to.

Unfortunately, that trust can be misplaced. Consumer fraud can be a serious problem that can cost you a lot of money or even put you in danger if the product is defective. Here are some ways consumer fraud can happen and what you can do to fight against it.

What is Consumer Fraud?

Consumer fraud, in a general sense, is a misleading or ambiguous business transaction that can cost a consumer money. Some of the most common examples of consumer fraud are outlined below.

False Advertising

False advertising is when a seller claims their product can do something it can't, displays a different price than what you're charged at checkout, or a product looks or functions differently than promised. False advertising can take many forms, whether it's through an online ad, a television commercial, a newspaper ad, and more.

Some of the signs to look for and recognize false advertising are:

• Ads that contain scientific claims that can't be confirmed anywhere
• Unrealistic claims or promises that seem impossible
• "Hidden fees" that you don't discover until you go to pay for your item or service

Each state has its own laws addressing the penalties or false advertising, which can result in both criminal and civil courts. The Federal Trade Commission oversees false advertising issues on a national level. Always review return policies, warranties, and guarantees so you know your options if the product or service is defective.

Identity Theft

Identity theft occurs when another person or other entity uses your personal information to access your finances. Common consequences of identity theft include accessing your bank accounts and withdrawing money, or taking out loans and credit cards in your name. Identify theft can happen when a business you provide your information to and they then mishandle, either by selling it to a third party or having lax security that can be easily breached. Some ways you can protect yourself against identity theft include:

• Being careful with what kind of information you disclose to unfamiliar companies
• Limiting how many store-specific credit cards you apply for
• Using strong passwords and setting up two-factor authentication on accounts that hold sensitive or financial information
• Checking your credit reports and all bills that come in

Identity theft is usually a felony, but it can be hard to recover all your stolen money in a civil suit if the thief took a lot from you. That's why it's so important to stop identity theft from taking too much from you in the first place.

Phone and Internet Fraud

Phone and internet fraud occurs when a swindler contacts you by phone or online to try and sell a product or service that may not even exist. Other times, they may claim to represent a company you're familiar with and trust, even though they don't. The best ways to prevent falling victim to this kind of fraud include:

• Never give out personal information to companies that call or email you unsolicited. If someone calls saying they're with your bank or credit card company, hang up then call your account holder directly.
• Never give out passwords to any of your accounts; your banks will never ask for these.
• Don't agree to pay for an item or service based on one unsolicited phone call or email; always research the company and product first.
• If you can't tell if an offer is real or not, ask for their contact information so you can take some time to look the company up. It's a bad sign if they keep trying to pressure you to buy right away and won't give you any names or contact information.

What To Do if You Think You're a Victim of Consumer Fraud

If you've been a victim of consumer fraud, or suspect you might have been, you have legal remedies available to you. The type of fraud you've experienced and the state you're in may impact exactly what those remedies are. In some cases, you'll need to follow federal laws instead of state laws. Working with a consumer fraud lawyer can help you understand your options for rectifying the situation.