Fraud and Misrepresentation
What is Fraud?
Fraud is the deliberate act to acquire assets or property of others by deception, trickery or dishonesty. It can take many forms. Often, it involves more than one person. In these cases, there is said to be a conspiracy to defraud.
Fraud can affect assets that are both large and small in value. In this day and age, there is the increasing use of electronic media to perpetrate fraud.
It can take place in small amounts over a long period of time or can represent just one incident where considerable value is involved.
Who is affected by Fraud?
Any individual or company, which owns assets, is a possible target for fraud. Fraud represents both a financial loss and an affront to the victim. Businesses, particularly those with complex financial arrangements or where there is considerable growth and, therefore, a high level of activity, are particularly vulnerable.
Why is the problem growing?
There is no simple answer to this question. One thing is clear, however, and that is the problem is growing every year. It is a product of many factors. Business is becoming more complex and more international. There is a greater reliance on computers and other electronic media. Transactions involving money transmission often do not exist in paper form at all. There are also greater opportunities to conceal the proceeds of fraud. In these circumstances, there are considerable opportunities for the unscrupulous.
Set these circumstances against a background where institutionalized theft seems to be regarded as, in some way, acceptable and you have the recipe for financial loss through fraud.
For out-of-town inquiries, for a free telephone consultation, call Toll Free: (800) 966-4041. For local inquiries, to schedule an appointment, call: (305) 373-9999.
1. Consumer or Business Fraud: Fla. Stat. 501.204
2. Business Opportunity: Biz Opps: Fla. Stat. 559.813
3. Auto Dealers: Fla. Stat. 501.976
501.976 Actionable, unfair, or deceptive acts or practices.—It is an unfair or deceptive act or practice, actionable under the Florida Deceptive and Unfair Trade Practices Act, for a dealer to:
(1) Represent directly or indirectly that a motor vehicle is a factory executive vehicle or executive vehicle unless such vehicle was purchased directly from the manufacturer or a subsidiary of the manufacturer and the vehicle was used exclusively by the manufacturer, its subsidiary, or a dealer for the commercial or personal use of the manufacturer’s, subsidiary’s, or dealer’s employees.
(2) Represent directly or indirectly that a vehicle is a demonstrator unless the vehicle complies with the definition of a demonstrator in s. 320.60(3).
(3) Represent the previous usage or status of a vehicle to be something that it was not, or make usage or status representations unless the dealer has correct information regarding the history of the vehicle to support the representations.
(4) Represent the quality of care, regularity of servicing, or general condition of a vehicle unless known by the dealer to be true and supportable by material fact.
(5) Represent orally or in writing that a particular vehicle has not sustained structural or substantial skin damage unless the statement is made in good faith and the vehicle has been inspected by the dealer or his or her agent to determine whether the vehicle has incurred such damage.
(6) Sell a vehicle without fully and conspicuously disclosing in writing at or before the consummation of sale any warranty or guarantee terms, obligations, or conditions that the dealer or manufacturer has given to the buyer. If the warranty obligations are to be shared by the dealer and the buyer, the method of determining the percentage of repair costs to be assumed by each party must be disclosed. If the dealer intends to disclaim or limit any expressed or implied warranty, the disclaimer must be in writing in a conspicuous manner and in lay terms in accordance with chapter 672 and the Magnuson-Moss Warranty—Federal Trade Commission Improvement Act.
(7) Provide an express or implied warranty and fail to honor such warranty unless properly disclaimed pursuant to subsection (6).
(8) Misrepresent warranty coverage, application period, or any warranty transfer cost or conditions to a customer.
(9) Obtain signatures from a customer on contracts that are not fully completed at the time the customer signs or which do not reflect accurately the negotiations and agreement between the customer and the dealer.
(10) Require or accept a deposit from a prospective customer prior to entering into a binding contract for the purchase and sale of a vehicle unless the customer is given a written receipt that states how long the dealer will hold the vehicle from other sale and the amount of the deposit, and clearly and conspicuously states whether and upon what conditions the deposit is refundable or nonrefundable.
(11) Add to the cash price of a vehicle as defined in s. 520.02(2) any fee or charge other than those provided in that section and in rule 69V-50.001, Florida Administrative Code. All fees or charges permitted to be added to the cash price by rule 69V-50.001, Florida Administrative Code, must be fully disclosed to customers in all binding contracts concerning the vehicle’s selling price.
(12) Alter or change the odometer mileage of a vehicle.
(13) Sell a vehicle without disclosing to the customer the actual year and model of the vehicle.
(14) File a lien against a new vehicle purchased with a check unless the dealer fully discloses to the purchaser that a lien will be filed if purchase is made by check and fully discloses to the buyer the procedures and cost to the buyer for gaining title to the vehicle after the lien is filed.
(15) Increase the price of the vehicle after having accepted an order of purchase or a contract from a buyer, notwithstanding subsequent receipt of an official price change notification. The price of a vehicle may be increased after a dealer accepts an order of purchase or a contract from a buyer if:
(a) A trade-in vehicle is reappraised because it subsequently is damaged, or parts or accessories are removed;
(b) The price increase is caused by the addition of new equipment, as required by state or federal law;
(c) The price increase is caused by the revaluation of the United States dollar by the Federal Government, in the case of a foreign-made vehicle;
(d) The price increase is caused by state or federal tax rate changes; or
(e) Price protection is not provided by the manufacturer, importer, or distributor.
(16) Advertise the price of a vehicle unless the vehicle is identified by year, make, model, and a commonly accepted trade, brand, or style name. The advertised price must include all fees or charges that the customer must pay, including freight or destination charge, dealer preparation charge, and charges for undercoating or rustproofing. State and local taxes, tags, registration fees, and title fees, unless otherwise required by local law or standard, need not be disclosed in the advertisement. When two or more dealers advertise jointly, with or without participation of the franchisor, the advertised price need not include fees and charges that are variable among the individual dealers cooperating in the advertisement, but the nature of all charges that are not included in the advertised price must be disclosed in the advertisement.
(17) Charge a customer for any predelivery service required by the manufacturer, distributor, or importer for which the dealer is reimbursed by the manufacturer, distributor, or importer.
(18) Charge a customer for any predelivery service without having printed on all documents that include a line item for predelivery service the following disclosure: “This charge represents costs and profit to the dealer for items such as inspecting, cleaning, and adjusting vehicles, and preparing documents related to the sale.”
(19) Fail to disclose damage to a new motor vehicle, as defined in s. 319.001(9), of which the dealer had actual knowledge, if the dealer’s actual cost of repairs exceeds the threshold amount, excluding replacement items.
In any civil litigation resulting from a violation of this section, when evaluating the reasonableness of an award of attorney’s fees to a private person, the trial court shall consider the amount of actual damages in relation to the time spent.
Florida's Deceptive and Unfair Trade Practices Act:
Consumers are protected by, and even sophisticated commercial transactions and experienced businesses are covered under, Florida's Deceptive and Unfair Trade Practices Act involving false representations of material fact by which a reasonably relying person would likely be mislead. Proving intent to defraud is not necessary. Actual damages and attorney fees are recoverable.
Business Opportunities: "Biz Opps"
The Florida Business Opportunity Seller's Act provides:
559.813. Remedies; enforcement
(1) If a business opportunity seller uses untrue or misleading statements in the sale of a business opportunity, fails to give the proper disclosures in the manner required by this part, or fails to deliver the equipment, supplies, or products necessary to begin substantial operation of the business within 45 days of the delivery date stated in the business opportunity contract, or if the contract does not comply with the requirements of this part, the purchaser may, within 1 year of the date of execution of the contract and upon written notice to the seller, rescind the contract and shall be entitled to receive from the business opportunity seller all sums paid to the business opportunity seller. Upon receipt of such sums, the purchaser shall make available to the seller at the purchaser's address, or at the places at which they are located at the time notice is given, all products, equipment, or supplies received by the purchaser. The purchaser shall not be entitled to unjust enrichment by exercising the remedies provided in this subsection.
(3) Any purchaser injured by a violation of this part, or by the business opportunity seller's breach of a contract subject to this part or any obligation arising therefrom, may bring an action for recovery of damages, including reasonable attorney's fees.
A business opportunity involves the sale of goods or services that enable the novice entrepreneur to start a business. Typical business opportunities involve vending machines, pay telephones, and display racks for such items as greeting cards. Ideally, the vending machines or display racks are located in high-traffic areas, such as malls, airports, or bowling alleys.
The promoter of a business opportunity may be responsible for providing vending machines or display racks and finding locations for investors. The promoter may offer to locate the machines for investors, may assist the investor in locating the machines, or may refer the investor to a professional locating service. The promoter may also represent that it will repair or replace broken machines. The promoter may also supply marketing plans, training, or other general guidance. Generally, the operator of the business opportunity is responsible for cleaning and restocking the machines or display racks, making sure needed repairs get done, and collecting the money.
Common Statements or "lines" from fraudulent telemarketers include the following: (Tip-Offs to Telemarketing Fraud):
It’s a "turnkey solution."
You must act "now" -- or the offer won't be good.
"No technical knowledge is required on your part."
It’s an opportunity "in your area."
You can't afford to miss this "high-profit, no-risk" offer.
For a free consultation, and legal assistance, call (305) 373-9999 for an appointment. Free parking. Or call toll free 1 (800) 966-4041 for a free out-of-town telephone consultation.