White Collar Crime and Its Effects on Consumers0
Author: Melanie Soto
Have you opened a medical statement recently and had too many charges on it? Were you charged for examinations that you did not need? Or were the charges from a doctors office you did not use? You may have been a victim of a white collar crime! It can happen to anyone!
White Collar Crime is a term that was defined by Edwin Southerland, Sociologist of criminology. The term is identifying those illegal non-violent activities that involve traditional notions of deceit, deception, concealment, manipulation, breach of trust or illegal circumvention. These crimes have been known to be committed by business professional and government agents. Today it is known that white collar crime can be committed by anyone, from many different backgrounds; whether it is race, gender, education or social status. White collar crimes include: anti-trust law violations, bankruptcy fraud, bribery/kickbacks, computer/internet fraud, counterfeiting, credit card fraud, embezzlement, environmental law violations, financial crimes, government fraud, health care fraud, identity theft, insider trading, insurance fraud, mail fraud, money laundering, public corruption, qui tam, securities exchange, tax evasion, telemarketing fraud and trade secret theft. Though these crimes are non-violent they have a great affect on corporate companies, consumers and the United States economy.
The rise in white collar crime incidents has also contributed to a rise in cost to the nation. The cost of corporate crime to society is many times that of organized crime or street crime. Corporate crime can cost billions of dollars, but because these losses are frequently spread out over so many unaware victims, it usually does not create the original impact as a store robbery that only cost a few hundred dollars. There are various types of white collar crime that increased economic hardship for the average citizen and consumer. Such white collar crimes increase the cost of doing business, which impacts consumer through increased prices and decreased services. According to the Federal Bureau of Investigation (FBI) these types of crimes cost the United States more than 300 billion dollars annually.
Insurance Fraud, excluding medical fraud, accounts for about 40 Billion dollars annually. While premiums are increased due to fraud, it is costing the average family about $400-$700 more annually for insurance. According to the National Health Care Anti-Fraud Association (NHCAA), it is estimated that about 3% or 68 billion dollars of all Health Care spending is lost to Health Care fraud. The FBI estimates a loss as high as 10% for Health Care related fraud. Due to the aging of the baby boomers Health Care fraud is only expected to rise because of the high insurance rates and medical bills. This increase in Health Care Insurance Fraud will also increase medical cost because people also have to pay to replace the money that is lost in the cases of fraud that take place. Businesses and consumers are not only loosing financially; People are losing lives and savings, their health is put in danger, the cost of everyday goods are higher, honest people are loosing their jobs and honest businesses are loosing money.
Bankruptcy and antitrust offenses are having the greatest impact on the economy. Fraud committed by executives does not only damages stock holders but public confidence for corporations. Some types of fraud hurt the most vulnerable; telemarketing frauds target the elderly who are usually at home and sometimes with no one to help them with such things. Telemarketing companies committing fraud are hard to track down and prosecute because most of the companies are between jurisdiction; making it harder to be investigated by local officials. The Government Accountability Office estimates that about 10% of all funds of domestic programs will be lost through contracting processes linked to public corruption. Computer fraud via the internet is used to acquire personal information such as credit card numbers, usernames, passwords or other information that can be use in criminal activities. A study done in 2004 by the Federal Trade Commission showed that fourteen percent of consumer fraud is achieved through the internet or email.
Greed is one of the main reasons people commit white collar crimes; they are trying to get rich of hard working people. Today there are many agencies and organizations trying to combat white collar crime; such as the Federal Bureau of Investigation, National White Collar Crime Center, The Department of Justice, the Federal Trade Commission, the Securities and Exchange Commission and others. They provide information for consumers on ongoing cases of white collar crime and how to protect them selves from these types of crimes. Most of these agencies also have contact information where white collar crimes can be reported.
About the Author
Student, West Chester University