Criminal Consumer Fraud: A Victim-Oriented Analysis

The poor and the elderly are the principal victims of the high pressure and often sophisticated sale techniques of criminal consumer fraud in this country. The problem is compounded when the poor and the elderly live in inner cities where legal assistance is costly and inadequate, and the courts, prosecutors, and investigators are overburdened. Yet the executive and legislative agencies responsible for law enforcement continue to assign a low priority to criminal consumer fraud. President Ford has reflected this orientation: “For effective management [of law enforcement], we first have to have some hard decisions on priorities. As a starter, I would suggest a high priority on violent crime and street crime in the inner-city. There is where crime does the most damage to our whole urban structure. There is where crime hurts the poor who already suffer enough.” The cruel irony of this statement is that one of the most significant causes of this suffering is criminal consumer fraud. The statement implicitly presumes that the economic impact of criminal fraud on low-income consumers is negligible because they are not consumers of expensive durable goods. But this presumption “overlooks that rapidly expanding American institution, the installment plan and the special forms it takes in low-income areas.” The harm resulting from the low-income family’s lack of shopping sophistication and its vulnerability to “easy credit” does not end merely with higher prices and heavy indebtedness. Repossession, creditor harassment, and garnishment of wages take their greatest tolls on the poor. Herbert Edelhertz notes: “A surprisingly large number of people living in ghettos do have something to lose, but unlike the established middle classes the asset in jeopardy is very often the only asset which stands between its owner and utter destitution.”