Mass marketing fraud

Mass-marketing fraud (or mass market fraud) is a scheme that uses mass-communication media – including telephones, the Internet, mass mailings, television, radio, and personal contact – to contact, solicit, and obtain money, funds, or other items of value from multiple victims in one or more jurisdictions. The frauds where victims part with their money by promising cash, prizes, and services and high returns on investment are part of mass market fraud.

Such scams or consumer frauds generally fall into four categories:

Alternatively, mass market fraud may also be classified as follows:

Victim reporting reveals that Internet-based solicitations are among the most common: in the United States, web sites and e-mails accounted for 60 percent of reported contacts in 2009, and Canada noted a 46 percent spike in Internet-related complaints from 2008 to 2009.

As per United States Department of Justice the mass-marketing fraud schemes generally fall into three main categories: (i) advance-fee fraud schemes; (ii) bank and financial account schemes; and (iii) investment opportunities. Advance fee fraud schemes are most popular. This type of scheme is based on the concept that a victim will be promised a substantial benefit – such as a million-dollar prize, lottery winnings, a substantial inheritance, or some other item of value – but must pay in advance some purported fee or series of fees before the victim can receive that benefit.

The mobile phones, internet and electronic media have given following distinct advantages to the mass market fraudsters:

Mass marketing fraud schemes are predominantly transnational/interstate in nature. Perpetrators operate from multiple foreign countries and utilize the financial infrastructure of one or more countries to transfer and launder funds. Law enforcement investigations have exposed that such schemes operating not only in multiple countries in North America, Europe, and Africa, but in other countries and jurisdictions as diverse as Brazil, Costa Rica, Hong Kong, India, Israel, the Philippines, Thailand, and the United Arab Emirates.

Many of the frauds perpetrated online, work on the principle of large number of victims losing relatively small sums of money. The Office for Fair Trading (2006) research illustrates that in many of the frauds relatively small sums of money are lost – frequently less than £100. The tactic of the fraudster is to secure such a sum of money that the victim will be less bothered to report the fraud.

Mass-marketing fraud – whether committed via the Internet, telemarketing "boiler rooms," the mail, television or radio advertising, mass meetings, or even one-on-one talks over people's kitchen tables, has two elements in common. First, the criminals who conduct any mass-marketing fraud scheme aim to defraud multiple individuals or businesses to maximize their criminal revenues. Second, the schemes invariably depend on persuading victims to transfer money or funds to the criminals based on promises of valuable goods, services, or benefits, and then never delivering the promised goods, services, or benefits to the victims.

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Wikipedia